BANGOR HYDRO-ELECTRIC COMPANY
$20,000,000
6.09% SENIOR NOTES DUE DECEMBER 20, 2012
NOTE PURCHASE AGREEMENT
DATED DECEMBER 20, 2002
TABLE OF CONTENTS
Section Page
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1. AUTHORIZATION OF NOTES 1
2. SALE AND PURCHASE OF NOTES 1
3. CLOSING 1
4. CONDITIONS TO CLOSING 2
4.1. Representations and Warranties 2
4.2. Performance; No Default 2
4.3. Compliance Certificates 2
4.4. Opinions of Counsel 2
4.5. Purchase Permitted By Applicable Law, etc. 2
4.6. Intentionally Omitted 3
4.7. Payment of Special Counsel Fees 3
4.8. Private Placement Number 3
4.9. Changes in Corporate Structure 3
4.10. Proceedings and Documents 3
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 3
5.1. Organization; Power and Authority 3
5.2. Authorization, etc. 4
5.3. Disclosure 4
5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates 4
5.5. Financial Statements 5
5.6. Compliance with Laws, Other Instruments, etc. 5
5.7. Governmental Authorizations, etc. 5
5.8. Litigation; Observance of Agreements, Statutes and Orders 6
5.9. Taxes 6
5.10. Title to Property; Leases 6
5.11. Licenses, Permits, etc 6
5.12. Compliance with ERISA 7
5.13. Private Offering by the Company 8
5.14. Use of Proceeds; Margin Regulations 8
5.15. Existing Indebtedness; Future Liens 8
5.16. Foreign Assets Control Regulations, etc. 9
5.17. Status under Certain Statutes 9
5.18. Environmental Matters 9
6. REPRESENTATIONS OF THE PURCHASER 10
6.1. Purchase for Investment 10
6.2. Source of Funds 10
7. INFORMATION AS TO COMPANY 11
7.1. Financial and Business Information 11
7.2. Officer's Certificate 13
7.3. Inspection 14
8. PREPAYMENT OF THE NOTES 14
8.1. Intentionally Omitted 14
8.2. Optional Prepayments with Make-Whole Amount 14
8.3. Allocation of Partial Prepayments 15
8.4. Maturity; Surrender, etc. 15
8.5. Purchase of Notes 15
8.6. Make-Whole Amount 15
9. AFFIRMATIVE COVENANTS 17
9.1. Compliance with Law 17
9.2. Insurance 17
9.3. Maintenance of Properties 17
9.4. Payment of Taxes and Claims 17
9.5. Corporate Existence, etc. 18
9.6. Keeping of Records and Books of Account 18
9.7. Additional Assurances 18
10. NEGATIVE COVENANTS 18
10.1. Transactions with Affiliates 18
10.2. Merger, Consolidation, etc 19
10.3. Liens 19
10.4. Permitted Additional Indebtedness 20
10.5. Fixed Charge Coverage Ratio 21
10.6. Consolidated Net Worth 21
11. EVENTS OF XXXXXXX 00
00. REMEDIES ON DEFAULT, ETC. 23
12.1. Acceleration 23
12.2. Other Remedies 24
12.3. Rescission 24
12.4. No Waivers or Election of Remedies, Expenses, etc. 24
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES 25
13.1. Registration of Notes 25
13.2. Transfer and Exchange of Notes 25
13.3. Replacement of Notes 25
14. PAYMENTS ON NOTES 26
14.1. Place of Payment 26
14.2. Home Office Payment 26
15. EXPENSES, ETC 26
15.1. Transaction Expenses 26
15.2. Survival 27
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT 27
17. AMENDMENT AND WAIVER 27
17.1. Requirements 27
17.2. Solicitation of Holders of Notes 27
17.3. Binding Effect, etc. 28
17.4. Notes held by Company, etc. 28
18. NOTICES 28
19. REPRODUCTION OF DOCUMENTS 29
20. CONFIDENTIAL INFORMATION 29
21. SUBSTITUTION OF PURCHASER 30
22. MISCELLANEOUS 30
22.1. Successors and Assigns 30
22.2. Payments Due on Non-Business Days 30
22.3. Severability 31
22.4. Construction 31
22.5. Counterparts 31
22.6. Governing Law 31
22.7. Headings 31
22.8. Integration 31
22.9. Waiver of Jury Trial 31
TABLE OF SCHEDULES AND EXHIBITS
SCHEDULE A -- Purchaser Information
SCHEDULE B -- Defined Terms
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.7 -- Governmental Authorizations
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.12 -- Plans
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 5.18 -- Environmental Matters
SCHEDULE 5.19 -- Insurance
EXHIBIT 1 -- Form of 6.09% Senior Notes due December 20, 2012
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the
Company
BANGOR HYDRO-ELECTRIC COMPANY
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
6.09% SENIOR NOTES DUE DECEMBER 20, 2012
December 20, 2002
TO: Thrivent Financial for Lutherans
Ladies and Gentlemen:
Bangor Hydro-Electric Company, a Maine corporation (the "Company"),
agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $20,000,000 aggregate
principal amount of its 6.09% Senior Notes due December 20, 2012 (the
"Notes", such term to include any such notes issued in substitution therefor
pursuant to Section 13 of this Agreement). The Notes shall be substantially
in the form set out in Exhibit 1, with such changes therefrom, if any, as may
be approved by you and the Company. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule or an
Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount of $20,000,000 at the
purchase price of 100% of the principal amount thereof.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you shall occur at
the offices of Xxxxxx & Xxxxxxxx, LLC, 00 Xxxxxx Xx., Xxxxxx, XX 00000, at
10:00 a.m., Eastern Time, at a closing (the "Closing") on December 20, 2002 or
on such other Business Day thereafter on or prior to January 30, 2003 as may
be agreed upon by the Company and you. At the Closing, the Company will
deliver to you the Notes to be purchased by you in the form of a single Note
(or such greater number of Notes in denominations of at least $100,000 as you
may request) dated the date of the Closing and registered in your name (or in
the name of your nominee), against delivery by you to the Company or its order
of immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company to
account number 0000000 (Bangor Hydro-Electric Company Operating Account) at
Fleet Bank of Maine, ABA No. 000000000. If at the Closing the Company shall
fail to tender such Notes to you as provided above in this Section 3, or any
of the conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
4.1. Representations and Warranties.
The representations and warranties of the Company in this Agreement shall
be correct when made and at the time of the Closing.
4.2. Performance; No Default.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied
with by it prior to or at the Closing and after giving effect to the issue and
sale of the Notes (and the application of the proceeds thereof as contemplated
by Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into
any transaction since the date of the Memorandum that would have been
prohibited by Sections 10.1, through 10.4 hereof had such Sections applied
since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreements.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing from Xxxxxx & Xxxxxxxx, LLC, counsel for
the Company, covering the matters set forth in Exhibit 4.4(a) and covering
such other matters incident to the transactions contemplated hereby as you or
your counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to you).
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing, your purchase of Notes shall (i) be permitted
by the laws and regulations of each jurisdiction to which you are subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (ii) not violate
any applicable law or regulation (including, without limitation, Regulation U,
T or X of the Board of Governors of the Federal Reserve System) and (iii) not
subject you to any tax, penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect on the
date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably
specify to enable you to determine whether such purchase is so permitted.
4.6. Intentionally Omitted.
4.7. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
4.8. Private Placement Number.
A Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the
Notes.
4.9. Changes in Corporate Structure.
Except as specified in Schedule 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of
the liabilities of any other entity, at any time following the date of the
most recent financial statements referred to in Schedule 5.5.
4.10. Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and
you and your special counsel shall have received all such counterpart
originals or certified or other copies of such documents as you or they may
reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. Organization; Power and Authority.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of Maine, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has all requisite corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver
this Agreement and the Notes and to perform the provisions hereof and thereof.
5.2. Authorization, etc.
This Agreement and the Notes have been duly authorized by all necessary
corporate action on the part of the Company, and this Agreement constitutes,
and upon execution and delivery thereof each Note will constitute, the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
5.3. Disclosure.
The Company, through its agent, Fleet Securities, Inc., has delivered to
you a copy of a Private Placement Memorandum, dated November 26, 2002 (the
"Memorandum"), relating to the transactions contemplated hereby. The
Memorandum fairly describes, in all material respects, the general nature of
the business and principal properties of the Company and its Subsidiaries.
Except as disclosed in Schedule 5.3, this Agreement, the Memorandum, the
documents, certificates or other writings delivered to you by or on behalf of
the Company in connection with the transactions contemplated hereby and the
financial statements listed in Schedule 5.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the
Memorandum or as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 2001, there
has been no change in the financial condition, operations, business,
properties or prospects of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents, certificates and
other writings delivered to you by or on behalf of the Company specifically
for use in connection with the transactions contemplated hereby.
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and correct
lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity interests
outstanding owned by the Company and each other Subsidiary, (ii) the Company's
Affiliates, other than (A) the Company's Subsidiaries and (B) Subsidiaries of
the Company's parent company, Emera, Inc., and (iii) the Company's directors
and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and
clear of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of formation or organization, and is duly qualified
as a foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the requisite corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it transacts
and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate or other
applicable law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.
5.5. Financial Statements.
The Company has delivered to each Purchaser copies of the consolidated
and consolidating financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each
case the related schedules and notes) fairly present in all material respects
the consolidated financial position of the Company and its Subsidiaries as of
the respective dates specified in such Schedule and the consolidated results
of their operations and cash flows for the respective periods so specified and
have been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the
case of any interim financial statements, to normal year-end adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this Agreement
and the Notes will not (a) contravene, result in any breach of, or constitute
a default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, corporate charter or by-
laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (b) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (c) violate any provision of
any statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.
5.7. Governmental Authorizations, etc.
Except as set forth on Schedule 5.7, no consent, approval or
authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery
or performance by the Company of this Agreement or the Notes.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. All such pending or threatened actions, suits or
proceedings are disclosed in Schedule 5.8.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
5.9. Taxes.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which the Company or a
Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books of the Company and
its Subsidiaries in respect of Federal, state or other taxes for all fiscal
periods are adequate. The Federal income tax liabilities of the Company and
its Subsidiaries have been determined by the Internal Revenue Service and paid
for all fiscal years up to and including the fiscal year ended December 31,
2001.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance
sheet referred to in Section 5.5 or purported to have been acquired by the
Company or any Subsidiary after said date (except as sold or otherwise
disposed of in the ordinary course of business), in each case free and clear
of Liens prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service xxxx, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material violation
by any Person of any right of the Company or any of its Subsidiaries with
respect to any patent, copyright, service xxxx, trademark, trade name or other
right owned or used by the Company or any of its Subsidiaries.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and administered
each Plan covered by ERISA and as discussed in Schedule 5.12 in compliance
with all applicable laws except for such instances of noncompliance as have
not resulted in and could not reasonably be expected to result in a Material
Adverse Effect. The Company and each ERISA Affiliate represents that there
are no claims asserted or can reasonably be expected to be asserted against a
Plan that will result in or that cannot reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any ERISA Affiliate has
incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as
defined in Section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in Section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities), and no
event has occurred or can reasonably be expected to occur that will result in
or can reasonably be expected to result in withdrawal liability under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of Section 406 of ERISA or in connection with which a tax
could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to (i) the accuracy of your representation
in Section 6.2 as to the sources of the funds used to pay the purchase price
of the Notes to be purchased by you, in accordance with Department of Labor
regulations.
5.13. Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered the Notes
or any similar securities for sale to, or solicited any offer to buy any of
the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you and not more than 5 other Institutional Investors,
each of which has been offered the Notes at a private sale for investment.
Neither the Company nor anyone acting on its behalf has taken, or will take,
any action that would subject the issuance or sale of the Notes to the
registration requirements of Section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes as set forth
in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of said
Board (12 CFR 220). Margin stock does constitutes less than 1% of the value
of the consolidated assets of the Company and its Subsidiaries and the Company
does not have any present intention that margin stock will constitute more
than 1% of the value of such assets. As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation U.
5.15. Existing Indebtedness; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a complete and
correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of [ , 2002], since which date there has been no Material
change in the amounts, interest rates, sinking funds, installment payments or
maturities of the Indebtedness of the Company or its Subsidiaries. Neither
the Company nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Subsidiary and no event or condition
exists with respect to any Indebtedness of the Company or any Subsidiary that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.3.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. Status under Certain Statutes.
The Company is part of the registered holding company system of Emera,
Inc. under the Public Utility Holding Company Act of 1935, the terms and
conditions of which are described more fully in the SEC's Holding Company Act
Release in SEC File No. 70-9787 (Emera Inc., Holding Co. Act Release No.
27445 (October 1, 2001)), and is exempt from the registration provisions of
such Public Utility Holding Company Act of 1935. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940,
as amended, the Interstate Commerce Act, as amended, or the Federal Power Act,
as amended.
5.18. Environmental Matters.
Except as set forth on Schedule 5.18, neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging
any damage to the environment or violation of any Environmental Laws, except,
in each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on
or in any way related to real properties now or formerly owned, leased or
operated by any of them or to other assets or their use, except, in each case,
such as could not reasonably be expected to result in a Material Adverse
Effect;
(b) neither the Company nor any of its Subsidiaries (i) has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and (ii) has disposed of any Hazardous Materials in a
manner contrary to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated
by the Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase for Investment.
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one
or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of your or their property shall at all
times be within your or their control. You understand that the Notes have not
been registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
6.2. Source of Funds.
In the event that you maintain assets of an ERISA covered Plan that is
related to the Company or an ERISA Affiliate, you represent that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by you to pay the purchase price of the Notes to
be purchased by you hereunder:
(a) if you are an insurance company, the Source does not include assets
allocated to any separate account maintained by you in which any employee
benefit plan (or its related trust) has any interest, other than a separate
account that is maintained solely in connection with your fixed contractual
obligations under which the amounts payable, or credited, to such plan and to
any participant or beneficiary of such plan (including any annuitant) are not
affected in any manner by the investment performance of the separate account;
or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption ("PTE") 00-0
(xxxxxx Xxxxxxx 00, 0000), xx (xx) a bank collective investment fund, within
the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have
disclosed to the Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated
to such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established
or maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM
Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control" in Section V(e)
of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this paragraph
(e);
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA; or
(g) the Source is an "insurance company general account" as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60"), and the conditions of PTCE 95-60 are satisfied with respect to your
acquisition of the Note.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Financial and Business Information.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 45 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated and consolidating balance sheet of the Company
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated and consolidating statements of income, changes in
shareholders' equity and cash flows of the Company and its Subsidiaries,
for such quarter and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer as fairly presenting,
in all material respects, the financial position of the companies being
reported on and their results of operations and cash flows, subject to changes
resulting from normal year-end adjustments, provided that delivery within the
time period specified above of copies of the Company's Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor and filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 90 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated and consolidating balance sheet of the Company
and its Subsidiaries, as at the end of such year, and
(ii) consolidated and consolidating statements of income, changes in
shareholders' equity and cash flows of the Company and its Subsidiaries,
for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied
(A) by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that such financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and their
results of operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making their
audit, they have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if they are aware that
any such condition or event then exists, specifying the nature and period
of the existence thereof (it being understood that such accountants shall
not be liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such accountants
should have obtained knowledge thereof in making an audit in accordance
with generally accepted auditing standards or did not make such an
audit),
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to shareholders, if any, prepared pursuant to Rule
14a-3 under the Exchange Act) prepared in accordance with the requirements
therefor and filed with the Securities and Exchange Commission, together with
the accountant's certificate described in clause (B) above, shall be deemed to
satisfy the requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming available, one
copy of (i) each financial statement, report, notice or proxy statement sent
by the Company or any Subsidiary to public securities holders generally, and
(ii) each regular or periodic report, each registration statement (without
exhibits except as expressly requested by such holder), and each prospectus
and all amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary to the
public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence
of any Default or Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder or that any
Person has given any notice or taken any action with respect to a claimed
default of the type referred to in Section 11(c) through (j), a written notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or
an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
Section 4043(b) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on
the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien, taken
together with any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any Federal or state or local Governmental Authority relating
to any order, ruling, statute or other law or regulation that could reasonably
be expected to have a Material Adverse Effect; and
(g) Requested Information -- with reasonable promptness, such other data
and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder
and under the Notes as from time to time may be reasonably requested by any
such holder of Notes.
7.2. Officer's Certificate.
Each set of financial statements delivered to a holder of Notes pursuant
to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.4 through Section 10.6 hereof,
inclusive, during the quarterly or annual period covered by the statements
then being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such Sections,
and the calculation of the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and
its Subsidiaries from the beginning of the quarterly or annual period covered
by the statements then being furnished to the date of the certificate and that
such review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if
any such condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
7.3. Inspection.
The Company shall permit the representatives of each holder of Notes that
is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to
visit the principal executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with the Company's
officers, and (with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Subsidiary, all
at such reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists, at the
reasonable expense of the Company to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their respective
books of account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective officers and independent public accountants
(and by this provision the Company authorizes said accountants to discuss the
affairs, finances and accounts of the Company and its Subsidiaries), all at
such times and as often as may be requested.
8. PREPAYMENT OF THE NOTES.
8.1. Intentionally Omitted.
8.2. Optional Prepayments with Make-Whole Amount.
The Company may, at its option, upon notice as provided below, prepay at
any time all, or from time to time any part of, the Notes, at 100% of the
principal amount so prepaid, plus the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Company will give
each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to the estimated
Make-Whole Amount due in connection with such prepayment (calculated as if the
date of such notice were the date of the prepayment), setting forth the
details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of
the specified prepayment date.
8.3. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes, the principal amount
of the Notes to be prepaid shall be allocated among all of the Notes at the
time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment.
8.4. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and Make-
Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued
in lieu of any prepaid principal amount of any Note.
8.5. Purchase of Notes.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
8.6. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole
Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or
is declared to be immediately due and payable pursuant to Section 12.1,
as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, 0.5% over the yield to maturity implied by (a) the yields
reported, as of 10:00 A.M. (Eastern time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on
the display designated "PX1" on Bloomberg Financial Markets Services
Screen (or such other display as may replace Page PX1 on the Bloomberg
Financial Markets Services Screen) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or (b) if such yields are
not reported as of such time or the yields reported as of such time are
not ascertainable, the Treasury Constant Maturity Series Yields reported,
for the latest day for which such yields have been so reported as of the
second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or
any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (i) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (A) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (B) the actively traded U.S.
Treasury security with the duration closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (a) such Called Principal into (b) the sum of
the products obtained by multiplying (i) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (ii)
the number of years (calculated to the nearest one-twelfth year) that
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior
to its scheduled due date, provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of the
Notes, then the amount of the next succeeding scheduled interest payment
will be reduced by the amount of interest accrued to such Settlement Date
and required to be paid on such Settlement Date pursuant to Section 8.2
or Section 12.1.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that from and after the date hereof and for so long
as any of the Notes are outstanding:
9.1. Compliance with Law.
The Company will and will cause each of its Subsidiaries to comply with
all laws, ordinances or governmental rules or regulations to which each of
them is subject, including, without limitation, Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in
each case to the extent necessary to ensure that non-compliance with such
laws, ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. Insurance.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and
similarly situated.
9.3. Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to maintain and
keep, or cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
9.4. Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary,
provided that neither the Company nor any Subsidiary need pay any such tax or
assessment or claims if (i) the amount, applicability or validity thereof is
contested by the Company or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (ii) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
9.5. Corporate Existence, etc.
The Company will at all times preserve and keep in full force and effect
its corporate existence. Subject to Section 10.2, the Company will at all
times preserve and keep in full force and effect the corporate existence of
each of its Subsidiaries (unless merged into the Company or a Subsidiary) and
all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.
9.6. Keeping of Records and Books of Account.
The Company will, and will cause its Subsidiaries to, keep adequate
records and books of account, in which complete entries will be made in
accordance with GAAP and with applicable requirements of any Governmental
Authority having jurisdiction over the Company and/or any Subsidiary in
question, reflecting all financial transactions.
9.7. Additional Assurances.
The Company shall from time to time hereafter, execute and deliver or
cause to be executed and delivered, such additional instruments, certificates
and documents, and take all such actions, as you shall reasonably request for
the purpose of implementing or effectuating the provisions of this Agreement,
and upon the exercise by you of any power, right, privilege or remedy
pursuant to this Agreement which requires any consent, approval,
registration, qualification or authorization of any Governmental Authority or
instrumentality, exercise and deliver all applications, certifications,
instruments and other documents and papers that you may be so required to
obtain.
10. NEGATIVE COVENANTS.
The Company covenants that from and after the date hereof and for so long
as any of the Notes are outstanding:
10.1. Transactions with Affiliates.
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any Material transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Subsidiary), except in the
ordinary course and pursuant to the reasonable requirements of the Company's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
Notwithstanding the foregoing, any Material transaction or Material group of
related transactions with any Affiliate that has been approved by the Main
Public Utilities Commission or the Securities and Exchange Commission shall be
deemed to comply with the provisions of this Section 10.1.
10.2. Merger, Consolidation, etc.
The Company shall not consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the case may
be, shall be a solvent corporation organized and existing under the laws of
the United States or any State thereof (including the District of Columbia),
and, if the Company is not such corporation, (i) such corporation shall have
executed and delivered to each holder of any Notes its assumption of the due
and punctual performance and observance of each covenant and condition of this
Agreement and the Notes and (ii) shall have caused to be delivered to each
holder of any Notes an opinion of nationally recognized independent counsel,
or other independent counsel reasonably satisfactory to the Required Holders,
to the effect that all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the terms hereof;
(b) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing determined on a Pro
Forma Basis.
No such conveyance, transfer or lease of substantially all of the assets of
the Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed
in this Section 10.2 from its liability under this Agreement or the Notes.
10.3. Liens.
The Company will not and will not permit any Subsidiary to create, incur,
assume or suffer to exist any Lien upon any of their respective properties or
assets, whether now owner or hereafter acquired, except as follows
(collectively, "Permitted Liens"):
(a) any Liens existing on the date hereof;
(b) Liens in favor of the Company on all or part of the assets of any
Subsidiary or the Company securing Indebtedness owing by such Subsidiary of
the Company to the Company;
(c) Liens to secure taxes, assessments and other government charges in
respect of obligations not overdue or liens on properties to secure claims for
labor, material or supplies in respect of obligations not overdue, or which
are being contented in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are being maintained in
accordance with GAAP so long as such Liens are not being foreclosed;
(d) Liens made in connection with, or to secure payment of, worker's
compensation, unemployment insurance, old age pension or other social security
obligations;
(e) Liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than 120 days from the date
of creation thereof in respect of obligations not overdue, or which are being
contested in goof faith by appropriate proceedings diligently conducted and
with respect to which adequate reserves are being maintained in accordance
with GAAP so long as such Liens are not being foreclosed;
(f) any purchase money Lien or construction mortgage on assets hereafter
acquired or constructed by the Company or any Subsidiary and any Lien on any
assets existing at the date of acquisition thereof by the Company or such
Subsidiary or created within 180 days after the date of completion of such
acquisition or construction; provided that such Lien shall at all times be
confined solely to the assets so acquired or constructed and any additions
thereto and shall secure Indebtedness of the lesser of (i) cost and (ii) fair
market value, of such assets so acquired or constructed;
(g) Liens resulting from legal proceedings being contested in good faith
by appropriate legal or administrative proceedings by the Company or the
Subsidiary (as appropriate), and as to which the Company shall have
established an adequate reserve on its books;
(h) any Liens in favor of any state of the United States or any
political subdivision of any such state, or any agency of any such state or
political subdivisions, or trustee acting on behalf of holders of obligations
issued by any of the foregoing or any financial institutions lending to or
purchasing obligations of any of the foregoing, which Lien is created or
assumed for the purpose of financing all or part of the cost of acquiring or
constructing the property subject thereto
(i) Liens resulting from conditional sale agreements, capital leases or
other title retention agreements; and
(j) Liens acquired in connection with any transaction permitted by
Section 10.2 in respect of Priority Indebtedness (constituting Permitted
Indebtedness); provided that such Lien shall not attach to any assets of the
Company or any Subsidiary existing immediately prior to the consummation of
such transaction.
10.4. Additional Indebtedness.
The Company will not and will not permit any Subsidiary to create, incur,
assume or suffer to exist any Indebtedness or in any manner become liable in
respect of any Indebtedness, except as follows (collectively, "Permitted
Indebtedness"):
(a) Indebtedness evidenced by the Notes;
(b) Indebtedness of the Company and its Subsidiaries outstanding as of
the date hereof and any renewals, extensions or refundings of any such
Indebtedness without increase in the aggregate principal amount thereof;
(c) additional Indebtedness of the Company and its Subsidiaries;
provided, however, that at the time of issuance of such Indebtedness and after
giving effect thereto and to the application of the proceeds of such
Indebtedness, Consolidated Total Indebtedness shall not exceed 65% of
Consolidated Total Capitalization.
Notwithstanding the foregoing, Borrower will not, at any time, permit Priority
Indebtedness to exceed $121,400,000 from the date hereof through July 31, 2005
and $75,000,000 thereafter plus, in either case, Priority Indebtedness
acquired in connection with any transaction permitted by Section 10.2.
10.5. Fixed Charge Coverage Ratio.
The Company will not at any time permit the Fixed Charge Coverage Ratio
to be less than 2.00 to 1.00.
10.6. Consolidated Net Worth.
The Company will not at any time permit Consolidated Net Worth to be
less than the sum of $120,000,000.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or
(c) the Company incurs any Indebtedness other than Permitted
Indebtedness or suffers or Permits any Liens other than Permitted Liens or
defaults in the performance of or compliance with any term contained in
Sections 10.5 or 10.6; or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this Section 11) and such default is not remedied within 30 days after
the earlier of (i) a Responsible Officer obtaining actual knowledge of such
default and (ii) the Company receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on behalf of
the Company or any Subsidiary or by any officer of the Company or any
Subsidiary in this Agreement or in any writing furnished in connection with
the transactions contemplated hereby proves to have been false or incorrect in
any Material respect on the date as of which made; or
(f)(i) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $10,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any Subsidiary is in
default in the performance of or compliance with any term of any evidence of
any Indebtedness in an aggregate outstanding principal amount of at least
$10,000,000 or of any mortgage, indenture or other agreement relating thereto
or any other condition exists, and as a consequence of such default or
condition such Indebtedness has become, or has been declared (or one or more
Persons are entitled to declare such Indebtedness to be), due and payable
before its stated maturity or before its regularly scheduled dates of payment,
or (iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount of at least
$1,000,000, or (y) one or more Persons have the right to require the Company
or any Subsidiary so to purchase or repay such Indebtedness; or
(g) the Company or any Subsidiary (i) is generally not paying, or admits
in writing its inability to pay, its debts as they become due; provided, that
if a Subsidiary is generally not paying, or admits in writing its inability to
pay, its debts as they become due, and the same has not caused and could not
reasonably be expected to cause a Material Adverse Effect, then the same shall
not constitute an Event of Default hereunder, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv) consents to
the appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of
its property, (v) is adjudicated as insolvent or to be liquidated, or
(vi) takes corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Company or any of its Subsidiaries, or any such petition shall be filed
against the Company or any of its Subsidiaries and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating
in excess of $10,000,000 are rendered against one or more of the Company and
its Subsidiaries and which judgments are not, within 60 days after entry
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
Section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC
shall have instituted proceedings under ERISA Section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit liabilities"
(within the meaning of Section 4001(a)(18) of ERISA) under all Plans,
determined in accordance with Title IV of ERISA, shall exceed $10,000,000,
(iv) the Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit
plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (vi) the Company or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a
manner that would increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in clauses (i) through (vi)
above, either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 11 (other than an Event of Default described
in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g))
has occurred, all the Notes then outstanding shall automatically become
immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than a majority in principal amount of the Notes at
the time outstanding may at any time at its or their option, by notice or
notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at
the time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes
held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the
entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid
interest thereon and (y) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all
be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The
Company acknowledges, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by
the Company (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Company in the event that
the Notes are prepaid or are accelerated as a result of an Event of Default,
is intended to provide compensation for the deprivation of such right under
such circumstances.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared
immediately due and payable under Section 12.1, the holder of any Note at the
time outstanding may proceed to protect and enforce the rights of such holder
by an action at law, suit in equity or other appropriate proceeding, whether
for the specific performance of any agreement contained herein or in any Note,
or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or
by law or otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or (c) of Section 12.1, the holders of not less than a majority
in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of
and Make-Whole Amount, if any, on any Notes that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and (to the extent permitted
by applicable law) any overdue interest in respect of the Notes, at the
Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have
been cured or have been waived pursuant to Section 17, and (c) no judgment or
decree has been entered for the payment of any monies due pursuant hereto or
to the Notes. No rescission and annulment under this Section 12.3 will extend
to or affect any subsequent Event of Default or Default or impair any right
consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount
as shall be sufficient to cover all costs and expenses of such holder incurred
in any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address
of each holder of one or more Notes, each transfer thereof and the name and
address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give
to any holder of a Note that is an Institutional Investor promptly upon
request therefor, a complete and correct copy of the names and addresses of
all registered holders of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company
shall execute and deliver, at the Company's expense (except as provided
below), one or more new Notes (as requested by the holder thereof) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal
amount of the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially in the form of
Exhibit 1. Each such new Note shall be dated and bear interest from the date
to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000.
Any transferee, by its acceptance of a Note registered in its name (or the
name of its nominee), shall be deemed to have made the representation set
forth in Section 6.2.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
nominee for, an original Purchaser or another holder of a Note with a minimum
net worth of at least $10,000,000, such Person's own unsecured agreement of
indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a
new Note, dated and bearing interest from the date to which interest shall
have been paid on such lost, stolen, destroyed or mutilated Note or dated the
date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Bangor, Maine at the principal office of the Company in such jurisdiction.
The Company may at any time, by notice to each holder of a Note, change the
place of payment of the Notes so long as such place of payment shall be either
the principal office of the Company in such jurisdiction or the principal
office of a bank or trust company in such jurisdiction.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose opposite your name in Schedule A, or by
such other method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any
sale or other disposition of any Note held by you or your nominee you will, at
your election, either endorse thereon the amount of principal paid thereon and
the last date to which interest has been paid thereon or surrender such Note
to the Company in exchange for a new Note or Notes pursuant to Section 13.2.
The Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by
you under this Agreement and that has made the same agreement relating to such
Note as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether the transactions contemplated hereby are consummated, the Company
will pay all costs and expenses (including reasonable attorneys' fees of a
special counsel and, if reasonably required, local or other counsel) incurred
by you or any holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of
this Agreement or the Notes (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the costs and expenses
incurred in enforcing or defending (or determining whether or how to enforce
or defend) any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the Notes, or by reason of being a holder of
any Note, and (b) the costs and expenses, including financial advisors' fees,
incurred in connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
15.2. Survival.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this
Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a
Note, regardless of any investigation made at any time by or on behalf of you
or any other holder of a Note. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant to this
Agreement shall be deemed representations and warranties of the Company under
this Agreement. Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and understanding between you and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and
the Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as
it is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby,
(i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of
principal of, or reduce the rate or change the time of payment or method of
computation of interest or of the Make-Whole Amount on, the Notes, (ii) change
the percentage of the principal amount of the Notes the holders of which are
required to consent to any such amendment or waiver, or (iii) amend any of
Sections 8, 11(a), 11(b), 12, 17 or 20.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required,
to enable such holder to make an informed and considered decision with respect
to any proposed amendment, waiver or consent in respect of any of the
provisions hereof or of the Notes. The Company will deliver executed or true
and correct copies of each amendment, waiver or consent effected pursuant to
the provisions of this Section 17 to each holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment
or waiver will extend to or affect any obligation, covenant, agreement,
Default or Event of Default not expressly amended or waived or impair any
right consequent thereon. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under
any Note shall operate as a waiver of any rights of any holder of such Note.
As used herein, the term "this Agreement" and references thereto shall mean
this Agreement as it may from time to time be amended or supplemented in
accordance with the terms hereof.
17.4. Notes held by Company, etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid),
or (b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other address
as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of the Chief Financial Officer, or
at such other address as the Company shall have specified to the holder
of each Note in writing.
Notices under this Section 18 will be deemed given only when actually
received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and you may destroy any original document so reproduced.
The Company agrees and stipulates that, to the extent permitted by applicable
law, any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you
in the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other holder of Notes
from contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy of
any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary
in connection with the transactions contemplated by or otherwise pursuant to
this Agreement that is proprietary in nature and that was clearly marked or
labeled or otherwise adequately identified when received by you as being
confidential information of the Company or such Subsidiary, provided that such
term does not include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by you or any person acting on your
behalf, (c) otherwise becomes known to you other than through disclosure by
the Company or any Subsidiary or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly available. You
will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect
confidential information of third parties delivered to you, provided that you
may deliver or disclose Confidential Information to (i) your directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor to which
you sell or offer to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20),
(v) any Person from which you offer to purchase any security of the Company
(if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access
to information about your investment portfolio or (viii) any other Person to
which such delivery or disclosure may be necessary or appropriate (w) to
effect compliance with any law, rule, regulation or order applicable to you,
(x) in response to any subpoena or other legal process, (y) in connection with
any litigation to which you are a party or (z) if an Event of Default has
occurred and is continuing, to the extent you may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or
for the protection of the rights and remedies under your Notes and this
Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed
to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request
by the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this
Agreement or its nominee), such holder will enter into an agreement with the
Company embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted
as a purchaser hereunder and such Affiliate thereafter transfers to you all of
the Notes then held by such Affiliate, upon receipt by the Company of notice
of such transfer, wherever the word "you" is used in this Agreement (other
than in this Section 21), such word shall no longer be deemed to refer to such
Affiliate, but shall refer to you, and you shall have all the rights of an
original holder of the Notes under this Agreement.
22. MISCELLANEOUS.
22.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
22.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary notwithstanding,
any payment of principal of or Make-Whole Amount or interest on any Note that
is due on a date other than a Business Day shall be made on the next
succeeding Business Day and shall include the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
22.3. Severability.
Any provision of this Agreement that 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 (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4. Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by
such Person.
22.5. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6. Governing Law.
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of Maine
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
22.7. Headings.
Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.
22.8. Integration.
This Agreement is intended by the parties as the final, complete and
exclusive statement of the transactions evidenced by this Agreement. All
prior or contemporaneous promises, agreements and understandings, whether
oral or written, are deemed to be superceded by this Agreement, and no party
is relying on any promise, agreement or understanding with respect to the
matters covered by this Agreement which is not set forth in this Agreement.
22.9. Waiver of Jury Trial.
THE PARTIES HERETO MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY
NOTE CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR EACH
OF THE PARTIES TO ENTER INTO THIS AGREEMENT AND CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY.
[Remainder of Page Intentionally Blank]
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.
BANGOR HYDRO-ELECTRIC COMPANY
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Treasurer
The foregoing is hereby
agreed to as of the
date thereof.
THRIVENT FINANCIAL FOR LUTHERANS
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Portfolio Manager
SCHEDULE A
----------
INFORMATION RELATING TO PURCHASERS
Notice of
Principal Payment and
Amount of Payment Wire Confirmation of All Other
Name of Notes to be Transfer Wire Transfer Notices
Purchaser Purchased Instructions Address Address
--------- ----------- ------------ --------------- --------
Thrivent $20,000,000 ABA #000000000 Investment Thrivent
Financial State Street Division Financial for
for Bank & Trust Co. Thrivent Lutherans
Lutherans DDA # A/C - Financial for Attn:Investment
0000-000-0 Lutherans Division
Fund Number: NCE1 625 Fourth 625 Fourth
Fund Name: Xxxxxxxx Xxxxxx Xxxxx Xxxxxx Xxxxx
Financial for Minneapolis MN Minneapolis, MN
Lutherans 55415 55415
All payments Fax: Fax:
must include 000-000-0000 (000) 000-0000
the following
information: With a copy to:
. Security Thrivent Accounts
Description State Street
. Private Kansas City
Placement 000 Xxxxxxxxxxxx
Xxxxxx Xxxxxx Xxxx, XX
. Reference 64105
Purpose of Attention:
Payment Xxxx Xxxxxxx
. Interest and/or Fax:
Principal 000-000-0000
Breakdown
SCHEDULE B
----------
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity interests. As used
in this definition, "Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Company.
"Applicable Laws" means any law, rule, regulation, order, decree or other
requirement having the force of law, and, where applicable, any interpretation
thereof by any authority having jurisdiction with respect thereto or charged
with the administration thereof.
"Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New
York, New York are required or authorized to be closed, and (b) for the
purposes of any other provision of this Agreement, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York, New York,
Boston, Massachusetts or Bangor, Maine are required or authorized to be
closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Bangor Hydro-Electric Company, a Maine corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Adjusted EBITDA" means, in respect of any period,
Consolidated Net Income (Loss) for such period plus (a) without duplication
and to the extent reflected as a charge in the statement of such Consolidated
Net Income (Loss) for such period the sum of (i) total income tax expense plus
(ii) interest expense, amortization or write-off of debt discount and debt
issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness, (iii) depreciation, and (iv) amortization and
(b) minus, to the extent included in Consolidated Net Income (Loss) for such
period, the amount that would appear in accordance with GAAP on a statement of
income of the Company and its consolidated Subsidiaries opposite the heading
"Allowance for equity funds used during construction" (or any similar item).
"Consolidated Fixed Charges" means, with respect to any period (a) total
interest expense (including that attributable to capital lease obligations) of
the Company and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Company and its Subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
to letters of credit and bankers' acceptance financing, determined on a
consolidated basis in accordance with GAAP plus (b) to the extent subtracted
in arriving at the amount described in clause (a) above, the amount that would
appear in accordance with GAAP on a statement of income of the Company and its
Subsidiaries for such period opposite the heading "Allowance for borrowed
funds used during construction" (or any similar item).
"Consolidated Net Income (Loss)" means, with reference to any period, the
net income (or loss) of the Company and its Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the course of
the preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP, provided, however, that there shall be
excluded:
(a) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Company or any
of its Subsidiaries;
(b) the income (or loss) of any Person (other than a Subsidiary) in
which the Company or any of its Subsidiaries has an ownership interest, except
to the extent that any such income (or loss) is actually received by the
Company or such Subsidiary in the form of cash dividends or similar cash
distributions; and
(c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual
obligation or any law, rule, regulation or order applicable to such
Subsidiary.
"Consolidated Net Worth" means the sum of (a) the value stated on the
books of the Company of the capital stock of the Company and its Subsidiaries
plus (b) the amount of the paid in capital and retained earnings of the
Company and its Subsidiaries, in each case as such amounts would be shown on a
consolidated balance sheet of the Company and its Subsidiaries as of such time
prepared in accordance with GAAP.
"Consolidated Total Capitalization" means, as of the date of
determination thereof, the sum of (a) Consolidated Total Indebtedness at such
date plus (b) the aggregate of all amounts that would appear in accordance
with GAAP on a balance sheet of the Company and its consolidated Subsidiaries
opposite the headings Common stock investment", "Preferred stock" and
"Preferred stock subject to mandatory redemption" or similar items.
"Consolidated Total Indebtedness" means, as of the date of determination
thereof, the aggregate principal amount of all indebtedness that would appear
in accordance with GAAP on a balance sheet of the Borrower and its
consolidated Subsidiaries at such date.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means that rate of interest that is 2.0% per annum above
the rate of interest stated in clause (a) of the first paragraph of the Notes.
"Environmental Laws" means any statute, ordinance, code, law, or
regulation or any other requirement enacted or adopted by any Governmental
Authority relating to pollution or protection of public health, safety or
welfare or the environment, including without limitation (i) those relating
to emissions, discharges, releases or threatened releases of Hazardous
Materials into the environment (including ambient air, surface water, ground
water or land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, (ii) the Clean Air Act, 42 U.S.C. Section 2001, et seq.,
the Federal Water Pollution Control Act, 33 U.S.C. Section 1247, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
42 U.S.C. Section 9601, et seq., the Toxic Substance Control Act, 42 U.S.C.
Section 2501, et seq., and any state law counterparts, including the law of
nuisance and strict liability.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under Section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fixed Charge Coverage Ratio" means the ratio of (a) Consolidated
Adjusted EBITDA to (b) Consolidated Fixed Charges determined as of the end of
each fiscal quarter for the immediately preceding four fiscal quarters
treating such four quarter period as a single accounting period.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary,
or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any indebtedness, dividend or other obligation of any other Person in any
manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital
or other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor
under any Guaranty, the indebtedness or other obligations that are the subject
of such Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety,
the removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration
of which is or shall be restricted, prohibited or penalized by any applicable
law (including, without limitation, asbestos, urea formaldehyde foam
insulation and polycholorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);
(f) Swaps of such Person;
(g) every obligation of such Person under any Synthetic Lease; and
(h) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (g) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 25% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of
any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets, properties or
prospects of the Company and its Subsidiaries taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the validity or enforceability of this Agreement or the Notes.
"Memorandum" has the meaning provided in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Indebtedness" has the meaning provided in Section 10.4.
"Permitted Liens" has the meaning provided in Section 10.3.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate
or with respect to which the Company or any ERISA Affiliate may have any
liability. This definition shall include all other plans or policies which
may or may not be ERISA plans which have been maintained or contributed to by
the Company or an ERISA Affiliate. A list of all Plans as of the date of this
Agreement is listed in Exhibit C.
"Preferred Stock" means any class of capital stock of a corporation that
is preferred over any other class of capital stock of such corporation as to
the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Indebtedness" means, as of the date of determination thereof,
the sum of (a) all Indebtedness of the Company and its Subsidiaries secured by
Permitted Liens plus, but without duplication, (b) all other Indebtedness of
Subsidiaries (excluding, in any event, Indebtedness due or owing to the
Company or another wholly owned Subsidiary.
"Pro Forma Basis" means a basis for making accounting calculations
following in connection with any transaction permitted pursuant to
Section 10.2, in which Indebtedness and Consolidated Adjusted EBITDA for the
fiscal quarter immediately preceding the fiscal quarter in which such
transaction occurred and each of the immediately preceding three fiscal
quarters are calculated taking into account the audited historical financial
results of the Person with whom the Company engaged in such transaction (or,
to the extent such financial results are unaudited, such unaudited results
shall have been prepared in accordance with GAAP) and the Company and its
Subsidiaries for the fiscal quarter immediately preceding the fiscal quarter
in which such transaction occurred and the immediately preceding three
Borrower fiscal quarters after giving effect on a Pro Forma Basis to such
transaction and assuming that such transaction had been consummated at the
beginning of such four fiscal quarter period in the manner described in (a),
(b) and (c) below:
(a) all Indebtedness and any other balance sheet adjustments incurred
or made in connection with the transaction shall be deemed to have been
incurred or made on the first day of such four fiscal quarter period, and all
Indebtedness of the Person acquired or to be acquired in such transaction
which was or will have been repaid in connection with the consummation of
such transaction shall be deemed to have been repaid concurrently with the
incurrence of the Indebtedness incurred in connection with such transaction;
(b) all Indebtedness assumed to have been incurred pursuant to
preceding clause (a) shall be deemed to have borne interest at the same rate
as set forth in the Notes; and
(c) other reasonable cost savings, expenses and other income statement
or operating statement adjustments which are attributable to the change in
ownership and/or management resulting from such transaction shall be deemed
to have been realized on the first day of such four fiscal-quarter period.
"property" or "properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, xxxxxx or
inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14, as
amended by Prohibited Transaction Class Exemption 2002-13, issued by the
United States Department of Labor.
"Required Holders" means, at any time, the holders of at least a majority
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence
of contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if
more than a 50% interest in the profits or capital thereof is owned by such
Person or one or more of its Subsidiaries or such Person and one or more of
its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of
its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect
thereof as of the end of the then most recently ended fiscal quarter of such
Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement
relating to such Swap provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount
of such obligation shall be the net amount so determined.
"Synthetic Lease" means any lease treated as an operating lease under
GAAP and as a loan or financing for United States income tax purposes.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Subsidiaries at such time.
EXHIBIT 1
---------
[FORM OF NOTE]
This Note has not been registered under the Securities Act of 1933 as amended
(the "Act") or registered or qualified under any state securities law and may
not be offered, sold, or otherwise transferred except in connection in
compliance with the registration requirements of the Act and applicable state
securities laws or pursuant to an exemption therefrom.
BANGOR HYDRO-ELECTRIC COMPANY
6.09% Senior Notes due December 20, 2012
No. 1 December 20, 2002
$20,000,000 PPN: 060077 G*9
FOR VALUE RECEIVED, the undersigned, Bangor Hydro-Electric Company
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Maine, hereby promises to pay to Swanbird & Co., or
registered assigns, the principal sum of $20,000,000 on December 20, 2012,
with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 6.09% per annum from
the date hereof, payable semiannually, on the 1st day of January and July in
each year, commencing with the July 1, 2003, until the principal hereof shall
have become due and payable, and (b) to the extent permitted by law on any
overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable
semiannually as aforesaid (or, at the option of the registered holder hereof,
on demand), at a rate per annum from time to time equal to 2.0% above the rate
interest rate that would otherwise have been applicable to such overdue amount
on the date such amount was due.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the location specified in Section 14 of the Note Purchase
Agreements referred to below or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the
Note Purchase Agreements referred to below.
This Note is issued pursuant to a separate Note Purchase Agreements dated
as of December 20, 2002 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the purchaser named therein and is
entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions
set forth in Section 20 of the Note Purchase Agreement and (ii) to have made
the representation set forth in Section 6 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment
and for all other purposes, and the Company will not be affected by any notice
to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Maine
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
BANGOR HYDRO-ELECTRIC COMPANY
By:
Name:
Title:
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
Matters To Be Covered In
Opinion of Special Counsel To the Company
1. Each of the Company and its Subsidiaries being duly
incorporated, validly existing and in good standing and having requisite
corporate power and authority to issue and sell the Notes and to execute and
deliver the documents.
2. Each of the Company and its Subsidiaries being duly qualified
and in good standing as a foreign corporation in appropriate jurisdictions.
3. Due authorization and execution of the documents and such
documents being legal, valid, binding and enforceable.
4. No conflicts with charter documents, laws or other agreements.
5. All consents required to issue and sell the Notes and to
execute and deliver the documents having been obtained.
6. No litigation questioning validity of documents.
7. The Notes not requiring registration under the Securities Act
of 1933, as amended; no need to qualify an indenture under the Trust Indenture
Act of 1939, as amended.
8. No violation of Regulations U, T or X of the Federal Reserve
Board.
9. Company not an "investment company", or a company "controlled"
by an "investment company", under the Investment Company Act of 1940, as
amended.
10. Company not a public utility required to be registered under
the Public Utility Holding Company Act.
Exhibit 4.4(b)
