Sovereign
SOVEREIGN BANK NEW ENGLAND
A Division of Sovereign Bank
September 25, 2000
Mr. Mark Collin, Vice President
Unitil Corp.
6 Liberty Lane West
Hampton, NH 03842-1720
Dear Mark:
We are pleased to advise you that Sovereign Bank (the "Bank") has approved an
unsecured line of credit in the maximum principal amount of Four Million Dollars
($4,000,000) (the "Line") for Unitil Corporation (the "Borrower") subject to the
Bank's periodic review. Unless renewed, this line will expire on June 30, 2001
(the "Annual Review Date").
This letter, together with the related Line of Credit Promissory Note (the
"Note") of near or even date (collectively, the "Loan Documents"), shall serve
as our agreement concerning the terms and conditions of your borrowing under the
Line.
1) Principal Advances. The Borrower may request principal advances from the Bank
from time to time, provided that any given principal advance shall not cause the
Borrower's liability to exceed $4,000,000.00. Such request shall be granted on
the day such request is received, provided that a) such request is received by
2:00 p.m. on a Bank business day, and b) the Bank is reasonably satisfied that
the conditions set forth in this Agreement have been satisfied. The Bank shall
credit the amount of the request to the designated account of the Borrower in
immediately payable funds.
Advances hereunder will be made only if in the opinion of the Bank there has
been no negative material change of circumstances and if there exists no default
under any loan documentation executed by you. The Bank retains the right to
refuse at any time any borrowing request hereunder.
All loans will be made by crediting the proceeds thereof to your demand deposit
account maintained at the Bank, which account should be established prior to any
advances under the line.
2) Interest. Borrowings under the Line accrue interest at the following rates:
(1) Our "Prime Rate" as announced from time to time; or
(2) a fixed rate based on an index plus a margin to be determined by the Bank
from time to time. Such indexes shaft be the "LIBOR rate", as set forth in the
Note, or our "Cost of Funds Rate", as set forth in the Note.
Unless the LIBOR or Cost of Funds rate is specifically elected, the Prime Rate
shall apply.
Each rate will be as determined by the Bank by 10:00 a.m. on the day of the
requested borrowing. Each borrowing under this line by you must specify the
amount of the loan requested, the rate requested and the maturity requested.
Borrowings at LIBOR rates may be requested for maturities of one, two, or three
month periods, but no such period shall exceed the Annual Review Date.
Borrowings at the Cost of Funds rate may be requested for maturities of 1 (one)
or 7 (seven) day periods, but no such periods shall exceed the Annual Review
Date.
Borrowings under the LIBOR or Cost of Funds rate options must be in minimum
increments of $1,000,000 or greater multiples of $100,000, and your ability to
prepay such borrowings is subject to a requirement that you compensate us for
any funding losses and other costs (including lost profits) incurred as a result
of such prepayment, as set forth in the Note.
Borrowings at LIBOR or Cost of Funds rates are subject to the availability of
funding sources and the continued legality of our offering such pricing option.
3) Borrowing Rate Option. The Borrower may, from time to time, elect to adjust
the interest rate applicable to the Borrower's outstanding principal balance
from the Prime Rate to either of the rates designated at the Bank's discretion
as of such date as its LIBOR or Cost of Funds rates. The LIBOR and Cost of Funds
rates shall be the sum of such respective index (as defined in the Note) plus a
margin to be chosen by the Bank. The LIBOR and Cost of Funds rates for any given
day on which the Bank is open for regular banking business shall be available
from the Bank by 10:00 a.m. on each such day.
Should the Borrower elect to have the Daily Borrowing Rate Option
available, which shall include daily fax notification of the then-available
rate, a monthly service fee of $300 shall be charged to the Borrower by the Bank
for any month during which such availability is elected.
4) Bank Records Conclusive. All borrowings shall be evidenced by the Line of
Credit Promissory Note in the form attached and requiring execution prior to
initiation of the Line. Each borrowing and the corresponding information will be
recorded in our computer data files. Our corresponding records of debits and
credits will be additional evidence of borrowings. You authorize us to keep the
official record or borrowing, under these facilities and you agree that, absent
manifest error, this record shall be conclusive and binding.
5) Default Rate. Upon demand or Default or after maturity or after judgment has
been rendered on this Loan Agreement, or in the Event of Default as defined in
the Note, Borrower's right to select pricing options shall cease and the unpaid
principal of all advances shall, at the option of the Bank, bear interest at a
rate which is four (4) percentage points per annum greater than the Prime Rate
("Default rate").
6) Automatic Payments. Borrower hereby authorizes Bank to automatically deduct
from Borrower's account designated for such purpose the amount of any loan
payment ("Automatic Payments"). If the funds in the account are insufficient to
cover any payment, Bank shall not be obligated to advance funds to cover the
payment. At any time and for any reason, Borrower or Bank may voluntarily
terminate Automatic Payments.
7) Conditions of Lending.
Initial Loan. The agreement of the Bank to provide the Line hereunder is
subject to the following conditions precedent:
(A) The Bank shall have received a certified copy of all corporate action
taken by the Borrower to authorize the execution, delivery, and performance of
the Loan Documents and the borrowing by it hereunder, and such other papers as
the Bank shall reasonably require on the form or forms provided by the Bank.
(B) Should the Bank so require, the Bank shall have received an opinion of
counsel to the Borrower, in form and substance satisfactory to the Bank and to
McLane, Graf, Raulerson & Middleton, P.A., counsel to the Bank, as to the matter
referred to in paragraphs 9 (A), (B), (C) and (F) hereof, and further to the
effect that this Agreement has been duly authorized, executed, and delivered and
is a legal, valid, binding, and enforceable agreement of the Borrower.
(C) Any other conditions precedent required under the Bank's Commitment
Letter for this loan.
8) Covenants. So long as this Line shall be outstanding and until the payment in
full of all sums outstanding hereunder and the performance of all other
obligations of the Borrower hereunder, the Borrower agrees that, unless the Bank
shall otherwise consent in writing:
A. Financial Reportings. The Borrower shall provide to the Bank:
(1) within ten (10) days of filing for each fiscal year of the Borrower,
copies of the Borrower's 10K filing and Annual Report for such fiscal year.
(2) within ten (10) days of filing for each quarter of each fiscal year of
the Borrower, copies of Borrower's 10-Q filing for such quarters.
B. Reorganizations, Acquisitions; Change of Name. The Borrower will not,
and will not permit any subsidiary to, (i) merge or consolidate with or into any
corporation, or sell, lease, transfer, or otherwise dispose of all or any
substantial part of its assets (except in the ordinary course of business),
whether now owned or hereafter acquired, or (ii) change its corporate name.
C. Notice of Default. The Borrower shall promptly notify the Bank of any
condition or event which constitutes, or would constitute with the passage of
time or giving of notice or both, an Event of Default, and promptly notify the
Bank of any changes in the financial condition of the Borrower which,
individually or cumulatively, may result in a material adverse change in the
financial condition of the Borrower.
D. Compliance with Laws and Regulations. The Borrower shall comply with all
applicable laws, ordinances, regulations, and other requirements of any
jurisdiction or agency having or claiming authority over the Borrower or any
transaction of the Borrower or any transaction arising pursuant to this
Agreement.
9) Representations and Warranties. Except as specifically permitted by the Bank
in writing the Borrower represents and warrants to Bank, and such
representations and warranties shall be continuing representations and
warranties so long as any amounts shall be outstanding pursuant to this
Agreement, as follows:
A. Organization. Borrower has being duly incorporated and organized and is
existing as a corporation in good standing under the laws of New Hampshire, and
is duly qualified and in good standing as a foreign corporation in those
jurisdictions where the conduct of its business or the ownership of its
properties requires qualification, and has filed all legally required business
activities reports, returns, etc. in such jurisdictions; Borrower has the power
and authority to enter into and perform the Loan Documents, and any other
document or instrument delivered in connection herewith.
B. Corporate and Regulatory Authority. The making and performance by the
Borrower of the Loan Documents have been duly authorized by all necessary
corporate and regulatory action and will not violate any provision of law or of
its Articles of Incorporation by bylaws.
C. Financial Condition. The reports, including balance sheets and
statements of income and retained earnings of the Borrower and its subsidiaries,
heretofore and henceforth furnished to the Bank, are complete and correct and
fairly represent the financial condition of the Borrower and its subsidiaries as
at the dates of said financial statements and the results of their operations
for the periods ending on said dates. Neither the Borrower nor any of its
subsidiaries has any material contingent obligations, liabilities for taxes,
long-term leases, or unusual forward or long-term commitments not disclosed by,
or reserved against in, said balance sheets or the notes thereto; and at the
present time there are no material unrealized or anticipated losses from any
unfavorable commitments of the Borrower or any subsidiary. Said financial
statements were prepared in accordance with generally accepted principles and
practices of accounting consistently maintained throughout the periods involved.
Since the date of the latest of such statements there has been no material
adverse change in the financial condition of the Borrower and its subsidiaries
from that set in said balance sheets as at that date.
D. Taxes. Borrower has filed all federal, state and local tax returns and
other reports it is required to file, and has paid or made adequate provision
for payment of all such taxes, assessments and other governmental charges.
E. Litigation. There are no suits or proceedings pending, or to the
knowledge of the Borrower threatened against or affecting the Borrower or any of
its subsidiaries, and there are no proceedings by or before any governmental
commission, board, bureau, or other administrative agency pending or, to the
knowledge of the Borrower, threatened, against the Borrower or any of its
subsidiaries which, if adversely determined, would have a material adverse
effect on the financial condition or business of the Borrower or its
subsidiaries.
F. Not Misleading. No representation, warranty or statement by Borrower
contained herein or in any certificates or other document finished or to be
furnished by Borrower pursuant hereto contains or at the time of delivery shall
contain any untrue statement of material fact, or omits, or shall omit at the
time of delivery to state a material fact necessary to make it not misleading.
10) Federal Reserve. Bank may at any time pledge, endorse, assign, or transfer
all or any portion of its rights under the Loan Documents including any portion
of the Promissory Note to any of the twelve (12) Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act. 12.U.S.C. Section 341. No such
pledge or enforcement thereof shall release Bank from its obligations under any
of the Loan Documents.
11) Third Party Purchaser. Bank shall have the unrestricted right at any time or
from time to time, and without Borrower's consent, to sell, assign, endorse, or
transfer all or any portion of its rights and obligations hereunder to one or
more banks or other entities (each, an "Assignee") and, Borrower agrees that it
shall execute, or cause to be executed such documents including without
limitation, amendments to this Agreement and to any other documents, instruments
and agreements executed in connection herewith as Bank shall deem necessary to
effect the foregoing. In addition, at the request of Bank and any such Assignee,
Borrower shall issue on or more new promissory notes, as applicable, to any such
Assignee and, if Bank has retained any of its rights and obligations hereunder
following such assignment, to Bank, which new promissory notes shall be issued
in replacement of, but not in discharge of, the liability evidenced by the note
held by Bank prior to such assignment and shall reflect the amount of the
respective commitments and loans held by such Assignee and Bank after giving
effect to such assignment. Upon the execution and delivery of appropriate
assignment documentation, amendments and any other documentation required by
Bank in connection with such assignment, and the payment by Assignee of the
purchase price agreed to by Bank and such Assignee, such Assignee shall be a
party to this Agreement and shall have all of the rights and obligations of Bank
hereunder (and under any and all other guaranties, documents, instruments and
agreements executed in connection herewith) to the extent that such rights and
obligations have been assigned by Bank pursuant to the assignment documentation
between Bank and Assignee, and Bank shall be released from its obligations
hereunder and thereunder to a corresponding extent.
12) Participation. Bank shall have the unrestricted right at any time and from
time to time, and without the consent of or notice to Borrower to grant to one
or more institutions or other persons (each a "Participant") participating
interests in Bank's obligations to lend hereunder and/or any or all of the loans
held by Bank hereunder. In the event of any such grant by Bank of a
participating interest to a Participant; whether or not upon notice to Borrower,
Bank shall remain responsible for the performance of its obligations hereunder
and Borrower shall continue to deal solely and directly with Bank in connection
with Bank's rights and obligations hereunder.
Bank may furnish any information concerning Borrower in its possession from time
to time to any prospective assignees and Participants, provided that Bank shall
require any such prospective assignee or Participant to maintain the
confidentiality of such information.
13) Right to Set Off. Borrower hereby grants to Bank a lien, security interest
and a right of setoff as security for all liabilities and obligations to Bank,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Bank, or in
transit to any of them. At any time, without demand or notice, Bank may set off
the same or any part thereof and apply the same to any liability or obligation
of Borrower even though unmatured and regardless of the adequacy of any other
collateral securing the loan. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED. Bank shall not be required to marshal any present or future
security for, or guarantees of, the obligations or to resort to any such
security or guarantee in any particular order and the Borrower waives, to the
fullest extent that it lawfully can, (a) any right they might have to require
the Bank to pursue any particular remedy before proceeding against them and (b)
any right to the benefit of, or to direct the application of the proceeds of any
collateral until the obligations are paid in full.
14) Replacement Documents. Upon receipt of an affidavit of an officer of Bank as
to the loss, theft, destruction or mutilation of the Note or any other security
document(s) which is not of public record and, in the case of any such
destruction or mutilation, upon surrender and cancellation of such Note or other
document(s), the Borrower will issue, in lieu thereof, a replacement Note or
other document(s) in the same principal amount thereof and otherwise of like
tenor.
15) Waiver of Jury Trial. Borrower and Bank 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 or any other documents contemplated to be executed in connection
herewith or any course of conduct, course of dealing, statements (whether verbal
or written) or actions of any party. This waiver constitutes a material
inducement for Bank to accept this Agreement and make the Loan.
16) Fees. The Borrower shall assume responsibility for all legal and other out
of pocket expenses incurred in the documentation of this commitment and in
addition shall pay the Bank an annual commitment fee of $1,500.
17) Waiver. The failure of Bank at any time or times hereafter to require strict
performance by Borrower of any of the provisions, warranties, terms and
conditions contained in the Loan Documents or in any other agreement, guaranty,
note, instrument or document now or at any time or times hereafter executed by
Borrower and delivered to Bank shall not waive, affect or diminish any right of
Bank at any time or times thereafter to demand strict performance thereof; and
no rights of Bank hereunder shall be deemed to have been waived by any act or
knowledge of Bank, its agents, officers or employees, unless such waiver is
contained in an instrument in writing signed by an officer of Bank and directed
to Borrower specifying such waiver. No waiver by Bank of any of its rights shall
operate as a waiver of any other of its rights or any of its rights on a future
occasion.
18) Capital Adequacy. If after the day hereof, the Bank determines that (i) the
adoption of any applicable law, rule or regulation of regarding requirements for
banks or bank holding companies in subsidiaries thereof; (ii) any change in the
interpretation or administration of any such law, rule or regulation by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof; or (iii) compliance by Bank or its
holding company with any request or directive of any governmental authority,
central bank, or comparable agency regarding capital adequacy (or not having a
force of law), has the effect of reducing the return on the Bank's capital to a
level below that which Bank could have achieved (taking into account the Bank's
and its holding company's policies with respect to capital adequacy and
immediately before such adoption, change or compliance and assuming that Bank's
capital was fully utilized prior to such adoption, change or compliance) but for
such adoption, change or compliance as a consequence of the Bank's commitment to
make advances pursuant hereto by any amount deemed by the Bank to be material;
then Bank shall promptly, after Bank's determination of such occurrence, give
notice to the Borrower, and the Borrower shall pay to the Bank as an additional
fee from time to time on demand, such amount as Bank certifies to be the lowest
amount that will be required to compensate the Bank for any such reduction. A
certificate from the Bank claiming entitlement to compensation as provided in
this Section shall be conclusive in the absence of manifest error. Said
certificate will be delivered to the Borrower and shall set forth the nature of
the occurrence giving rise to any such need for compensation, the additional
amount or amounts to be paid to the Bank, and the method by which such amounts
were determined. In determining any such amount, the Bank may use any reasonable
averaging or attribution method. Any adjustment will be no greater than that
calculated to be proportionate to the Borrower's loan in relationship to the
rest of the Bank's loan portfolio of similar risk.
19) Notice. Any demand or notice required or permitted to be given hereunder
shall be deemed effective when delivered in the United States mail, and sent by
certified mail, return receipt requested, postage prepaid, addressed to Bank at
Bank's address or to Borrower at Borrower's address, as applicable, or to such
other address as may be provided by the party to be notified, on ten (10) days
prior written notice to the other party.
20) Entire Understanding. The Loan Documents contain the entire understanding
between the parties hereto with respect to the transactions contemplated herein
and such understanding shall not be modified except in writing signed by or on
behalf of the parties hereto.
21) Severability. Wherever possible, each provision of the Loan Documents shall
be interpreted in such manner as to be effective and valid under applicable law;
should any portion of any of the Loan Documents be declared invalid for any
reason in any jurisdiction, such declaration shall have no effect upon the
remaining portions of the Loan Documents; furthermore, the entirety of the Loan
Documents shall continue in full force and effect in all other jurisdictions,
Said remaining portions of the Loan Documents shall continue in full force and
effect in the subject jurisdiction as if this Agreement had been executed with
the invalid portions thereof deleted.
22) Non-Assignability. The provisions of the Loan Documents shall be binding
upon and shall inure to the benefit of the heirs, administrators, successors and
assigns of Bank and Borrower; provided, however, Borrower may not assign any of
its rights or delegate any of its obligations hereunder without the prior
written consent of the Bank.
23) Jurisdiction. The Loan Documents are and shall be deemed to be contracts
entered into and made pursuant to the laws of the State of New Hampshire and
shall in all respects be governed, construed, applied and enforced in accordance
with the laws of said state; in the event that the Bank brings any action
hereunder in any court of record of New Hampshire or the Federal Government,
Borrower consents to and confers personal jurisdiction over Borrower by such
court or courts and agrees that service of process may be made upon Borrower by
mailing a copy of the summons to Borrower at Borrower's address; and in any
action hereunder Borrower waives the right to demand a trial by jury.
24) Costs of Counsel. If, prior hereto and/or at any time or times hereafter,
Bank shall employ counsel in connection with the execution and consummation of
the transactions contemplated by any or all of the Loan Documents or to
commence, defend or intervene, file a petition, complaint, answer, motion or
other pleadings, or to take any other action on or with respect to any suit or
proceeding (bankruptcy or otherwise) relating to any Loan Documents or any other
agreement, guaranty, note, instrument or document heretofore, now or at any time
or times hereafter executed by Borrower and delivered to Bank, or to enforce any
rights of Bank hereunder, whether before or after the occurrence of any Event of
Default, or to collect any of the Obligations, then in any of such events, all
of the reasonable attorneys' fees arising from such services, and any expenses,
costs and charges relating thereto, shall be part of the outstanding balance,
payable on demand.
25) Counterparts. Any of the Loan Documents may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
26) Succession. Each reference herein to Bank shall be deemed to include its
successors and assigns, and each reference to Borrower and any pronouns
referring thereto as used herein shall be construed in the masculine, feminine,
neuter, singular or plural, as the context may require, and shall be deemed to
include the legal representatives, successors and assigns of Borrower, all of
which shall be bound by the provisions hereof. The term "Borrower" as used
herein shall, if this Agreement is signed by more than one Borrower, mean,
unless this Agreement otherwise provides or unless the context otherwise
requires, the "Borrower and each of them" and each and every representation,
promise, agreement and undertaking shall be joint and several, except that the
granting of the security interest, right of set-off and lien shall be by each
Borrower in its several respective property. In the event that there is more
than one Borrower, any loan which is secured by this Agreement, shall be deemed
to be made at the request of and for the benefit of each Borrower.
27) Headings. The section headings herein are included for convenience only and
shall not be deemed to be a part of this Agreement.
28) Costs. The Borrower will pay, whether or not any Advance is made hereunder,
all out-of-pocket expenses of the Bank in connection with the preparation,
execution, and delivery hereof and of any Advance, including reasonable fees and
disbursements of counsel to the Bank.
If the foregoing satisfactorily sets forth the terms and conditions of the Line,
please indicate your agreement by executing and returning this letter and the
attached Line of Credit Promissory Note.
We continue to enjoy working with Unitil Corp. and look forward to further
expanding upon our long-standing and mutually beneficial relationship.
SOVEREIGN BANK NEW ENGLAND
__________________________ By: __________________________________
Witness David A. Canedy, Vice President
The above terms are hereby understood and accepted as of this 25th day of
September, 2000:
UNITIL CORPORATION
__________________________ By: __________________________________
Witness Mark H. Collin, Treasurer
<PAGE>
LINE OF CREDIT PROMISSORY NOTE
$4,000,000 September 25, 2000
Nashua, New Hampshire
FOR VALUE RECEIVED, UNITIL CORPORATION, a New Hampshire corporation with a
principal place of business at 6 Liberty Lane West, Hampton, New Hampshire,
03842 (the "Borrower") (the Borrower and all other persons primarily or
secondarily liable hereunder or in respect hereto are sometimes referred to
herein as the "Obligor"), hereby promises to pay, ON DEMAND, to the order of
SOVEREIGN BANK, with an office at 223 Main Street, Nashua, New Hampshire, 03060
(the "Bank") (the Bank and any subsequent transferee of this Note, whether
taking by negotiation or otherwise, are sometimes referred to herein as the
"Holder") at such place of business or such other place as may be designated
hereafter by the holder hereof, the principal sum of Four Million Dollars
($4,000,000.00) (or so much thereof as may be advanced or readvanced by the Bank
to the Borrower from time to time hereafter, such amounts defined as the "Debit
Balance" below), together with interest on each such advance from the date
thereof at a rate per annum equal to (a) the "Prime Rate" or (b) the LIBOR rate,
or (c) the Cost of Funds rate, as elected by the Borrower pursuant to the Letter
Agreement of even date. All payments shall be made in lawful money of the United
States of America, in immediately available funds.
This Note is being executed and delivered in accordance with the terms of a
certain Letter Agreement of even date between the Borrower and the Bank (the
"Letter Agreement") and the documents defined therein as the "Loan Documents".
Until such time as this Note becomes due and payable, the Borrower shall pay to
the Bank the sum of the Interest Period Interest Charges (as set forth below)
monthly in arrears commencing on or by the like-numbered date of the next month
from the date hereof (or on such other date as may be agreed upon by the
Borrower and the Bank to provide for a convenient payment date) and continuing
on or by the corresponding day of each succeeding month thereafter.
If any due date falls on a non-Business Day, the payment shall be due on the
next Business Day. A "Business Day" shall mean, with respect to any date that is
specified in this Note to be subject to adjustment in accordance with applicable
Business Day convention, (i) a day on which commercial banks settle payments in
New York or London if the payment obligation is calculated by reference to any
LIBOR Rate, or (ii) in any other case, any day on which the Bank is open for
business.
The "Modified Following Business Day Convention" shall mean the convention for
adjusting any relevant date if it would otherwise fall on a day that is not a
Business Day. The following terms, when used in conjunction with the term
"Modified Following Business Day Convention" and a date, shall mean that an
adjustment will be made if that date would otherwise fall on a day that is not a
Business Day so that the date will be the first following day that is a Business
Day.
Interest Calculation.
--------------------
The Interest Period Interest Charge shall be the sum of the Daily Interest
Charges in the Interest Period.
The Daily Interest Charge on each Principal Advance shall be calculated as
follows:
Daily Balance X Interest Rate
360
The Interest Period shall be the period from the day following the last interest
due date to the next interest due date.
The Interest Rate is the rate elected by the Borrower for each Principal
Advance.
The maximum principal amount outstanding under this Note shall be limited to
Four Million Dollars ($4,000,000). Pursuant to the Letter Agreement, there shall
be due and payable from the Borrower to the Bank, and the Borrower shall
immediately pay to the Bank, without demand, any amount by which the Debit
Balance exceeds Four Million Dollars ($4,000,000).
The term "Prime Rate" means the variable per annum rate of interest so
designated from time to time by the Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer. The rate of interest hereunder shall change
simultaneously and automatically, without further notice, upon the Bank's
determination and designation from time to time of the Prime Rate. The Bank's
determination and designation from time to time to the Prime Rate shall not in
any way preclude the Bank from making loans to other borrowers at rates that are
higher or lower than or different from the referenced rate.
"LIBOR" shall mean, as applicable to any LIBOR Advance and LIBOR period
applicable thereto, (i) a rate per annum (rounded upward, if necessary), to the
nearest 1/32 of one percent) equal to the composite London Interbank Offered
Rate which appears on the Telerate page 3750 as of 11:00 am. London time on the
day that is two (2) London Banking Days preceding the first day of such LIBOR
Period (or if not reported thereon, then as determined by Bank from another
recognized source or interbank quotation) divided by (ii) a fraction (A) the
numerator of which is one and (B) the denominator is the average of the daily
rates (expressed as a decimal) for maximum reserve requirements which are, at
any time rates (expressed as a decimal) of maximum reserve requirements which
are, at any time, applicable during such LIBOR Period (including, without
limitation, basic, supplemental, special, marginal and emergency reserves) under
any regulation of the Board of Governors of the Federal Reserve System or other
banking authority, domestic or foreign, as now or hereafter in effect,
prescribed for eurocurrency funding (currently referred to as Eurocurrency
Liabilities in Regulation D of such Board) to which the Bank (including any
branch, affiliate, or other fronting office, making or holding a loan that
accrues interest at a rate which refers to LIBOR) is subject, as now or
hereafter in effect.
"LIBOR Period" shall mean, with respect to any LIBOR Loan, the period commencing
on the date on which the LIBOR Loan begins to bear interest at a rate tied to
LIBOR in accordance herewith and ending one, two, or three month(s) thereafter,
as appropriate, as selected by the Borrower pursuant hereto; provided however,
(i) any LIBOR Period that would otherwise end on a day which is not a Banking
Day shall be extended to the next Banking Day, unless such extension would carry
such LIBOR Period into the next month, in which event such LIBOR Period shall
end on the preceding Banking Day, (ii) any LIBOR Period that begins on the last
Banking Day of a calendar month (or on a date for which there is no numerically
corresponding day in the calendar month in which such LIBOR Period ends) shall
end on the last Banking Day of a calendar month, and (iii) any LIBOR Period that
would otherwise extend beyond the (Maturity Date) shall end on the (Maturity
Date).
"London Banking Day" shall mean any Banking Day on which commercial banks are
open for international business (including dealing in U.S. dollar ($) deposits)
in London, England and Philadelphia, Pennsylvania.
"Cost of Funds" means the per annum rate of interest which Bank is required to
pay, or is offering to pay, for wholesale liabilities, adjusted for reserve
requirement and such other requirements as may be imposed by federal, state or
local government and regulatory agencies, as determined by Sovereign Treasury
Group, or its successors.
The "LIBOR rate" and the "Cost of Funds rate" shall mean the rate provided to
the Borrower as described in the Letter Agreement by the Bank upon any given day
as such rate. Such rate shall consist of the LIBOR or Cost of Funds index as of
such date, plus a margin to be determined by the Bank in its sole discretion.
Any LIBOR rate or Cost of Funds rate shall be fixed for the duration of the
election.
All amounts outstanding under the Line which are not subject to the LIBOR rate
or the Cost of Funds rate shall bear interest at a variable annual rate equal to
the Borrower's Prime Rate as provided hereinabove. Notwithstanding the foregoing
provisions, the Borrower may not convert existing advances to LIBOR advances or
Cost of Funds advances if at any time either an Event of Default or a payment
Default exists under the Loan Documents. As used herein, "LIBOR Advance" shall
mean any amount outstanding under the Line as to which the Borrower has elected
a LIBOR Rate, and "Cost of Funds Advances" shall mean any amount outstanding
under the Line as to which the Borrower has elected a Cost of Funds rate.
All computations of interest under this Note shall be made on the basis of a
three hundred sixty (360) day year and the actual number of days elapsed.
Late Charges: If a regularly scheduled payment is fifteen (15) days or more
late, Borrower will be charged 5.000% of the unpaid portion of the regularly
scheduled payment or $10.00, whichever is greater. If Bank demands payment of
this Loan, and Borrower does not pay the Loan within fifteen (15) days after
Bank's demand, Borrower will be charged either 5.000% of the unpaid principal
plus accrued unpaid interest or $10.00, whichever is greater.
Borrower shall not be obliged to pay and Bank shall not collect interest at a
rate higher than the maximum permitted by law or the maximum that will not
subject Bank to any civil or criminal penalties. If, because of the acceleration
of maturity the payment of interest in advance or any other reason, Borrower is
required, under the provisions of any Loan Documents or otherwise, to pay
interest at a rate in excess of such maximum rate, the rate of interest under
such provisions shall immediately and automatically be reduced to such maximum
rate and any payment made in excess of such maximum rate, together with interest
thereon at the rate provided herein from the date of such payment, shall be
immediately and automatically applied to the reduction of the unpaid principal
balance of this Note as of the date on which such excess payment was made. If
the amount to be so applied to reduction of the unpaid principal balance exceeds
the unpaid principal balance, the amount of such excess shall be refunded by
Bank to Borrower.
The Borrower agrees that the Bank may make loan advances to the Borrower upon
verbal authority (which, if the Bank so requires, shall be followed by written
confirmation) of any officer executing this Note on behalf of the Borrower or
any other officer of the Borrower who is authorized in writing to borrow money
from the Bank and may deliver such advances by direct deposit to any deposit
account of the Borrower with the Bank or otherwise as may be authorized in the
Letter Agreement. Notwithstanding anything to the contrary herein, the Bank may
require written notice of requests for loan advances as may be provided in the
Letter Agreement. All such advances shall represent binding obligations of the
Borrower.
The Borrower's "Debit Balance" shall mean the debit balance in an account on the
books of the Bank, maintained in the form of a ledger card, computer records or
otherwise in accordance with the Bank's customary practice and appropriate
accounting procedures wherein there shall be recorded the principal amount of
all advances made by the Bank to the Borrower, all principal payments made by
the Borrower to the Bank hereunder, and all other appropriate debits and credits
(the "Loan Account"). The Bank shall render to the Borrower a statement of
account with respect to the Loan Account on a monthly basis. Such statement
shall indicate the Borrower's then current Debit Balance and any interest
amounts due and payable from the Borrower to Bank. Such statement may be based
on estimates of the principal amount outstanding and the interest rate for the
applicable payment period. Any required adjustments between such estimates and
actual amounts shall be reflected in subsequent statements.
The Borrower acknowledges that this Note is to evidence the Borrower's
obligation to pay the Debit Balance, plus interest, as determined from time to
time and that it shall continue to do so despite the occurrence of intervals
when no Debit Balance exists because the Borrower has paid the previously
existing Debit Balance in full.
This Note is a DEMAND OBLIGATION. At the option of the Bank, this Note shall
become immediately due and payable in full, without further demand or notice, on
the earlier of (i) demand by the Bank, or (ii) the occurrence of an Event of
Default (as defined below).
If any of the following events of default shall occur ("Event of Default"): (a)
default in the payment or performance of any of the Obligations or of any
obligations of any Obligor to others for borrowed money or in respect of any
extension of credit or accommodation: (b) failure of any representation or
warranty, statement or information in any documents or financial statements
delivered to the Holder for the purpose of inducing it to make or maintain any
loan under this Note to be true and correct; (c) failure of the undersigned to
file any tax return, or to pay or remit any tax, when due, unless the
undersigned contests the particular tax in good faith, and also maintains
adequate reserves to pay such tax, if unsuccessful in its action to contest; (d)
failure to furnish the Holder promptly on request with financial information
about, or to permit inspection by the Holder of books, records and properties to
any Obligor; (e) any Obligor generally not paying its debts as they become due;
(f) death, dissolution, termination of existence, insolvency, business failure,
appointment of a receiver or other custodian of any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceedings (except for an involuntary bankruptcy petition against any Obligor
to which such Obligor files a proper answer thereto pursuant to Section 303(d)
of the Bankruptcy Code (11 USC 303(d)) within ten (10) days of receipt of notice
of said proceeding, which answer shall include a request that petitioning
creditors post adequate bond under Section 303(e)(11 USC 303(e))) under any
bankruptcy or insolvency laws by or against, any Obligor; (g) a material adverse
change in the condition or affairs (financial or otherwise) of any Obligor which
in the opinion of the Holder will impair its security or increase its risk
including but not limited to any reduction of any Obligor's tangible net worth
by more than 10% from its level at the previous fiscal year end or the
occurrence of operating losses for any consecutive twelve month period; then the
Holder shall give written notice of such default and if such default is not
cured within five business days of delivery of such notice then immediately and
automatically with respect to any Defaults set forth in clauses (e) and (f)
above, and thereupon or at anytime thereafter with respect to each other Default
(such Default not having been previously cured), at the option of the Holder,
all Obligations of the Obligor shall become immediately due and payable without
demand, and, if there is any collateral for the Obligations, the Holder shall
then have in any jurisdiction where enforcement hereof is sought, in addition to
all other rights and remedies the rights and remedies of a secured party under
the Uniform Commercial Code as in effect in the State of New Hampshire.
As used herein, "Obligation" means any obligation hereunder or otherwise of any
Obligor to the holder whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising.
The Borrower agrees to pay on demand all reasonable out-of-pocket costs of
collection hereof, including reasonable attorneys' fees, whether or not any
foreclosure or other action is instituted by the Holder in its discretion. All
payments received will be applied first to interest, then to fees, and then to
principal.
As additional collateral, the Borrower grants (1) a security interest in, or
pledges, assigns and delivers, to the Holder, as appropriate, all deposits,
credits and other property now or hereafter due from the Holder to such Borrower
and (2) the right to set-off and apply (and a security interest in said right),
from time to time hereafter and without demand or prior notice of any nature,
all, or any portion, of such deposits, credits and other property, against the
indebtedness evidenced by this Note, whether the other collateral, if any, is
deemed adequate or not.
Borrower and Bank 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 Note or any other documents executed in
connection herewith or any course of conduct, course of dealing, statements
(whether verbal or written) or actions of any party. This waiver constitutes a
material inducement for Bank to accept this Note and make the Loan.
No delay or omission on the part of the Holder in exercising any right,
privilege or remedy shall impair such right, privilege or remedy or be construed
as a waiver thereof or of any other right, privilege or remedy. No waiver of any
right, privilege or remedy or any amendment to this Note shall be effective
unless made in writing and signed by the Holder. Under no circumstances shall an
effective waiver of any right, privilege or remedy on any one occasion
constitute or be construed as a bar to the exercise of or a waiver of such
right, privilege or remedy on any future occasion. The acceptance by the Holder
hereof of and payment after any default hereunder shall not operate to extend
the time of payment of any amount then remaining unpaid hereunder or constitute
a waiver of any rights of the Holder hereof under this Note.
All rights and remedies of the Holder, whether granted herein or otherwise,
shall be cumulative and may be exercised singularly or concurrently, and the
Holder shall have, in addition to all other rights and remedies, the rights and
remedies of a secured party under the Uniform Commercial Code of New Hampshire.
The Borrower waives, to the fullest extent permitted by law, presentment,
notice, protest and all other demands and notices and assent (1) to any
extension of the time of payment or any other indulgence, (2) to any
substitution, exchange or release of collateral, and (3) to the release of any
other person primarily or secondarily liable for the obligations evidenced
hereby.
This Note and the provisions hereof shall be binding upon the Borrower and the
Borrower's heirs, administrators, executors, successors, legal representatives
and assigns and shall inure to the benefit of the Holder, the Holder's heirs,
administrators, executors, successors, legal representatives and assigns.
This Note may not be amended, changed or modified in any respect except by a
written document which has been executed by each party. This Note and all rights
and obligations hereunder, including matters of construction, validity and
performance, shall be governed by the laws of the State of New Hampshire.
IN WITNESS WHEREOF, the Borrower, acting by and through its duly authorized
officer, has executed this Promissory Note on this 25th day of September, 2000.
UNITIL CORPORATION
By:
----------------------------------------
Anthony J. Baratta, Jr.
Its Duly Authorized
Senior Vice President and
Chief Financial Officer
By:
----------------------------------------
Mark H. Collin,
Its Duly Authorized Treasurer
<PAGE>
ADDENDUM A
Prepayment Penalty: At any time that (i) the interest rate on the loan described
in the Loan Documents is a fixed rate (e.g., a "LIBOR rate" or a "Cost of Funds
rate") and (ii) the Bank in its sole discretion should determine that current
market conditions can accommodate a prepayment request, the Borrower shall have
the right at any time and from time to time to prepay the loan in whole (but not
in part), and the Borrower shall pay to the bank a yield maintenance fee in an
amount computed as follows. The current rate for United States Treasury
securities (Bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the maturity date of the term chosen pursuant to
the fixed rate election as to which the prepayment is made shall be subtracted
from the "LIBOR rate" or "Cost of Funds rate" component, as applicable, of the
fixed rate in effect at the time of prepayment. If the result is zero or a
negative number, there shall be no yield maintenance fee. If the result is a
positive number, then the resulting percentage shall be multiplied by the amount
of the principal balance being prepaid. The resulting amount shall be divided by
360 and multiplied by the number of days remaining in the term chosen pursuant
to the fixed rate election as to which the prepayment is made. Said amount shall
be reduced to present value calculated by using the number of days remaining in
the designated term and using the above referenced United States Treasury
security rate and the number of days remaining in the term chosen pursuant to
the fixed rate election as to which the prepayment is made. The resulting amount
shall be the yield maintenance fee due to the Bank upon prepayment of the fixed
rate Loan. Each reference in the paragraph to "fixed rate election" shall mean
the election by the Borrower pursuant to the Letter Agreement of near or even
date.
If by reason of an Event of Default the Bank elects to declare the Loan to be
immediately due and payable, then any yield maintenance fee with respect to the
Loan shall become due and payable in the same manner as though the Borrower had
exercised such right of repayment.
UNITIL CORPORATION
By:
---------------------------------
Anthony J. Baratta,
Senior Vice President and
Chief Financial Officer
Duly Authorized
By:
---------------------------------
Mark H. Collin,
Treasurer
Duly Authorized
