SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1995 Commission File No. 0-505
------------------ -----
BANGOR HYDRO-ELECTRIC COMPANY
-----------------------------------------------------
(Exact Name of Registrant as specified in its Charter
Maine 01-0024370
- ------------------------------- --------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
33 State Street, Bangor, Maine 04401
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 207-945-5621
------------
None
- ------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report
Outstanding Common Stock, $5 Par Value - 7,284,903 Shares
September 30, 1995
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
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FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
PART I - FINANCIAL INFORMATION
PAGE
----
Cover Page 1
Index 2
Consolidated Statements of Income 3
Management's Discussion and Analysis
of Financial Statements 4
Consolidated Balance Sheets - September 30, 1995 and
December 31, 1994 15
Consolidated Statements of Capitalization 17
Consolidated Statements of Cash Flows 18
Consolidated Statements of Retained Earnings 19
Notes to the Consolidated Financial Statements 20
PART II - OTHER INFORMATION 30
Item 6 - Exhibits and Reports on Form 8-K 31
Signature Page 32
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF INCOME
000's Omitted Except Per Share Amounts
(Unaudited)
3 Months Ended 9 Months Ended
Sept. 30, Sept. 30 Sept. 30, Sept. 30,
1995 1994 1995 1994
---------- -------- ---------- ----------
ELECTRIC OPERATING REVENUES $46,025 $42,575 $ 137,982 $ 128,614
---------- -------- ---------- ----------
OPERATING EXPENSES:
Fuel for generation $16,128 $20,076 $ 65,329 $ 65,464
Purchased power 2,495 3,882 12,843 10,448
Other operation and maintenance 11,078 7,341 26,467 25,315
Depreciation and amortization 1,808 1,357 5,164 3,950
Amortization of Seabrook Nuclear
Unit 424 424 1,274 1,274
Amortization of costs to terminate
purchased power contracts 5,190 972 7,133 2,267
Taxes -
Property and payroll 1,167 1,125 3,636 3,493
State income (65) 297 (110) 394
Federal income 262 1,512 1,266 2,834
---------- -------- ---------- ----------
$38,487 $36,986 $ 123,002 $ 115,439
---------- -------- ---------- ----------
OPERATING INCOME $ 7,538 $ 5,589 $ 14,980 $ 13,175
---------- -------- ---------- ----------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used
during construction $ 108 $ 248 $ 462 $ 1,013
Other, net of applicable
income taxes 302 52 183 35
---------- -------- ---------- ----------
$ 410 $ 300 $ 645 $ 1,048
---------- -------- ---------- ----------
INCOME BEFORE INTEREST EXPENSE $ 7,948 $ 5,889 $ 15,625 $ 14,223
---------- -------- ---------- ----------
INTEREST EXPENSE:
Long-term debt $ 6,150 $ 2,675 $ 11,462 $ 8,089
Other 1,149 363 2,259 1,075
Allowance for borrowed funds used
during construction (179) (221) (521) (1,116)
---------- -------- ---------- ----------
$ 7,120 $ 2,817 $ 13,200 $ 8,048
---------- -------- ---------- ----------
NET INCOME $ 828 $ 3,072 $ 2,425 $ 6,175
DIVIDENDS ON PREFERRED STOCK 450 413 1,276 1,239
---------- -------- ---------- ----------
EARNINGS APPLICABLE TO COMMON STOCK $ 378 $ 2,659 $ 1,149 $ 4,936
========== ======== ========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES 7,281 7,151 7,253 6,870
========== ======== ========== ==========
EARNINGS PER COMMON SHARE, based on
the weighted average number of
shares outstanding during the
period $ .05 $ .37 $ .16 $ .72
========== ======== ========== ==========
DIVIDENDS DECLARED PER COMMON SHARE $ .18 $ .33 $ .69 $ .99
========== ======== ========== ==========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Management's Discussion and Analysis of the Results of Operations and
Financial Condition contained in Bangor Hydro-Electric Company's (the
"Company") Annual Report on Form 10-K for the year ended December 31, 1994
("1994 Form 10-K") should be read in conjunction with the comments below.
EARNINGS
The quarter ended September 30, 1995 resulted in earnings of $.05 per
common share, compared to earnings of $.37 per common share for the quarter
ended September 30, 1994. The difference in earnings is principally
attributable to recording the cost of an early retirement and involuntary
severance program in September 1995, amounting to a onetime, noncash charge
to operations of $2.3 million or $.32 per common share(net of income taxes),
as well as the impact of incurring higher costs for power to replace the
Company's share of Maine Yankee's output (see the discussion of Maine Yankee
below). The 1995 earnings per share number is based on a greater number of
common shares outstanding than in 1994.
IMPORTANT CURRENT ACTIVITIES
COST REDUCTIONS - As mentioned above, the Company recorded the costs
associated with an early retirement and involuntary severance program in the
third quarter of 1995. The program has resulted in approximately another 10%
reduction in the Company's workforce. Although this program will result in
future cost savings, accounting guidelines require that the Company record
the cost of the downsizing program in the period in which it was implemented.
MAINE YANKEE - The Company has a 7% equity investment in the Maine
Yankee nuclear generating plant, which has been a low cost source of power
since it came on line in the early 1970's. As reported in the first two
quarters of 1995, when the plant shut down for refueling earlier this year,
inspections resulted in discovering that the steam generator tubes were
degrading and would require extensive repair. After a thorough evaluation,
in May it was determined to resleeve all of the tubes in all three steam
generators. The cost of this repair is estimated at $40 million, of which
the Company is responsible for 7%. The resleeving costs are offset to some
extent by O&M savings at Maine Yankee, due to various cost cutting measures
being implemented by the Company while the plant is nonoperational. Repairs
are essentially completed, and the plant is anticipated to be operational by
the end of 1995. In addition, the Company is incurring replacement power
costs of approximately $800,000 per month while the plant is off-line.
ACQUISITION OF WHOLESALE CUSTOMER - On October 26, 1995, the Company
acquired the assets and service territory of its largest full requirements
wholesale customer for a purchase price of approximately $2.4 million. The
customer had annual retail revenues of approximately $1 million and served
approximately 1,800 customers.
REVENUES
The $3.45 million increase in total electric operating revenues was
attributable to an overall 9.8% increase in total (kilowatt hour) KWH sales
in the third quarter of 1995 as compared to 1994. The majority of this
increase is related to special contracts which the Company has entered into
with three large industrial customers. KWH sales to these customers
increased 41.2% in the quarter ended September 30, 1995 versus the comparable
1994 quarter, resulting in associated revenues increasing $1.9 million. KWH
sales for other customer classes increased by 1.3% in the third quarter of
1995 as compared to 1994. Increased revenues in the 1995 period were also
affected by the elimination of seasonal rates for certain customers in March
1995.
EXPENSES
The significant decrease in fuel for generation expense is related to
the buyback of the high cost non-utility generator purchased power contracts
on June 30, 1995, which eliminated fuel expense in the third quarter of 1995
for this non-utility generator (1994 comparable expense was $7.2 million);
the amortization of $252,000 in deferred fuel revenue related to
overcollections from customers under the fuel cost adjustment (FCA) (the
Company is amortizing the overcollected balance of $3.03 million as of
January 1, 1995 over a three year period); and certain purchased power costs
which are no longer reclassified to fuel for generation, due to the
elimination of the FCA (See below). These decreases are offset to some
extent by the elimination of the FCA in the first quarter of 1995, when the
Company began recording, as expense, the actual cost of fuel for generation.
Previously the Company had been permitted to adjust its rates retroactively
for changes in these costs. Also in the third quarter of 1995, the
incremental cost of Maine Yankee replacement power was $2.2 million.
The significant decrease in purchased power expense is a result of lower
operating costs at Maine Yankee while the plant is nonoperational, as well as
the Company recording no amortization of Maine Yankee refueling costs until
the plant is back on-line (anticipated to be at the end of 1995). The
Company in a prior rate case was allowed to normalize the cost of the Maine
Yankee refueling over a 19 month period, to match the refueling cycle. The
refueling cycle will not begin until the plant is operational again. At
September 30, 1995, the $2.4 million balance in deferred purchased power
costs is related to unamortized Maine Yankee refueling costs.
The $3.7 million increase in other O&M expense in the second quarter of
1995 was primarily a result of the previously mentioned early retirement and
involuntary severance program, which resulted in a $3.9 million charge to
other O&M in the third quarter of 1995. Also in the third quarter of 1995
bad debt expense increased by $428,000, due to higher levels of bad debt
write-offs. These increases were offset by a $243,000 decrease in O&M
payroll as compared to 1994. The decreased payroll expense was a function of
lower employee levels in the 1995 period as compared to 1994 due to the
workforce reduction in the third quarter of 1995, as well as higher levels of
capital labor in the 1995 quarter. Also reducing O&M expense in the 1995
quarter was a $392,000 reduction in active employee medical expenses.
The increase in depreciation and amortization expense was due to an
increase in depreciable property, as well as an increase in the composite
depreciation rate from 3.0% to 3.2%, resulting from a depreciation study
conducted by the Company.
The increase in amortization of costs to terminate purchased power
contracts was a result of the Company amortizing over a ten year period,
starting in July 1995, the costs to terminate the purchased power contract
which occurred in June 1995, amounting to monthly amortization of $1.4
million.
The increase in property and other taxes in the third quarter of 1995
was due principally to greater property taxes, which was a result of
increased property levels and property tax rates. These increases were offset
by reduced payroll taxes, as a result of lower employee levels in 1995 as
compared to 1994.
The decrease in income taxes was primarily a function of lower earnings
in the third quarter of 1995.
Allowance for funds used during construction (AFDC) decreased in 1995
relative to 1994 primarily due to decreased construction levels in the 1995
period.
Other income, net, increased in the 1995 quarter due principally to
$345,000 of interest income earned on the debt service reserve fund set aside
in connection with the June 30, 1995 purchased power contracts buyback
financing with the Finance Authority of Maine (FAME).
Long-term debt interest expense increased $3.5 million in the third
quarter of 1995 as compared to 1994 due to $186 million of borrowings on June
30, 1995 to finance the purchased power contracts buyback. The increase was
offset by the impact of required and optional sinking fund payments on the
Company's 12.25% first mortgage bonds.
Other interest expense, which is composed primarily of interest expense
on short term borrowings, increased due to higher interest rates as well as a
$17.9 million increase in weighted average short term borrowings outstanding
in the 1995 quarter as compared to 1994. The increased borrowings were a
result of the need for additional sources of financing for the purchased
power contracts buyback in June.
NINE MONTHS OF 1995 VERSUS NINE MONTHS OF 1994
REVENUES
The $9.4 million increase in total electric operating revenues was
attributable to the 15.9% base rate increase effective March 1, 1994, the
previously mentioned elimination of seasonal rates for certain customers, an
overall 4.3% increase in KWH sales in the 1995 period as compared to 1994,
and an increase in off-system sales of $798,000 in 1995. The majority of the
KWH sales increase is related to the previously discussed special contract
customers. KWH sales to these customers increased 22.5% in the 1995 period
as compared to 1994, resulting in associated revenues increasing $4.3
million. KWH sales for other customer classes decreased by .5% in the 1995
period as compared to 1994.
EXPENSES
The decrease in fuel for generation expenses in the 1995 period as
compared to 1994 is due principally to the same factors as noted for the
third quarter of 1995 versus the 1994 quarter.
The increase in purchased power expense is attributable to accruing the
Company's estimated total share of the Maine Yankee resleeving project costs
at June 30, 1995 (see the prior discussion on Maine Yankee). This increase
was offset by the same items as noted for the third quarter of 1995 versus
the third quarter of 1994.
The increase in other O&M in 1995 was primarily a result of the early
retirement and involuntary severance program in the third quarter of 1995, as
well as a $907,000 increase in bad debt expense in the 1995 period. These
increases were offset by the early retirement program implemented in the
first quarter of 1994, which resulted in a $2.8 million charge to operations
in 1994. Also, as a result of the corresponding reduction in employee levels
related to the 1994 and 1995 workforce reductions, O&M payroll expense was
$1.2 million lower in the 1995 period as compared to 1994.
The reasons for the increases in depreciation and amortization expense,
as well as property and payroll taxes for the 1995 period as compared to 1994
are consistent with those previously discussed.
Effective March 1, 1994, the Company began amortizing deferred costs
associated with the Beaver Wood Joint Venture (Beaver Wood) purchased power
contract termination over a nine year period, amounting to $323,863 per
month. Effective July 1, 1995, the Company began amortizing deferred costs
associated with the most recent purchased power contracts termination over a
ten year period, amounting to $1,406,036 on a monthly basis. Consequently
amortization expense in 1995 was $4.6 million greater than the same 1994
period.
The decrease in income taxes was primarily a function of lower earnings
in the 1995 period as compared to 1994.
AFDC decreased in 1995 relative to 1994 primarily because the Company
ceased accruing carrying costs associated with the Beaver Wood purchased
power contract buyout when recovery was authorized by the Maine Public
Utilities Commission on March 1, 1994. The decrease was also a function of
lower levels of construction in the 1995 period.
The increase in long-term debt interest expense in the 1995 period as
compared to 1994 was due to the previously mentioned reasons.
Other interest expense increased principally due to higher interest
rates as well as a $7.6 million increase in weighted average short term
borrowings outstanding in the 1995 period as compared to 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Consolidated Statements of Cash Flows reflect events in the first
nine months of 1995 and 1994 as they affect the Company's liquidity. Net
cash used in operations was $173.5 million for the period ended September 30,
1995. In June 1995 the Company expended $196.5 million related to the
purchased power contracts buyback ($168.7 million) and related financing
costs ($27.8 million). These financing costs included debt issuance costs
($2.2 million), funding of the debt service reserve fund ($21.2 million), and
collateral pledged on the Company's letter of credit associated with its
Pollution Control Revenue Bonds ($4.4 million). Upon establishment of a new
letter of credit, the $4.4 million in collateral was released to the Company
in the third quarter of 1995. The receipt of these funds is reflected in the
statements of cash flows in other, net and was utilized to paydown
outstanding short-term debt.
Exclusive of the costs to buyback the purchased power contracts, which
were entirely debt financed (see below), cash flows provided by operations
were $23.1 million for the nine months ended September 30, 1995 as compared
to $21.8 million for the comparable 1994 period. With the elimination of the
purchased power contracts, the Company incurred no costs related to the
contracts in the period from July 1995 through September 1995, while in the
comparable 1994 period, the Company incurred approximately $7.2 million in
costs under the contracts. Another component of the increase in cash flows
from operations is the reduction in payroll costs in 1995 as compared to
1994. Due principally to the reduction in the workforce through the early
retirement plans in 1994 and 1995, labor costs were approximately $686,000
lower in the 1995 period as compared to 1994.
Also enhancing cash flows from operations in 1995 as compared to 1994 is
Company contributions to the defined benefit pension plans. For the nine
months ended September 30, 1994 the Company had contributed approximately
$1.2 million to the non-bargaining unit plan, while in the 1995 period, with
the merging of the bargaining unit and non-bargaining unit plans, no
contributions have been required. This is due to the overfunded status of
the bargaining unit plan prior to the merger.
These enhancements to cash flows from operations have been offset to
some extent by the additional costs incurred in 1995 to replace the Company's
share of Maine Yankee's output. These additional fuel costs have amounted to
$6.6 million for the period from February through September 1995 period.
Due to efforts by the Company to control costs and enhance cash flows in
1995, construction expenditures have been reduced by $2.2 million in the 1995
period as compared to 1994.
As discussed in the 10-Q for the second quarter of 1995, the Company
reduced its quarterly dividend on common stock by $.15 from the prior
quarterly level of $.33 per share, effective for the quarter ending June 30,
1995. This reduction has improved cash flows through a $1.1 million decrease
in common dividend payments for the 1995 period. The Company in each period
made regular and optional sinking fund payments on its 12.25% first mortgage
bonds.
Under the Company's Dividend Reinvestment and Common Stock Purchase Plan
the Company realized a common stock investment of $1.0 million through the
issuance of 99,760 new common shares in 1995 as compared to $998,000 in the
comparable 1994 period through the issue of 63,764 shares.
The purchased power contracts buyback costs in June 1995 were financed
through the issuance of $126 million of FAME revenue notes and $60 million of
medium term notes. Additional short-term borrowings were also made in the
1995 period under the Company's revolving credit agreement to finance this
transaction. In connection with the $60 million of medium term notes, the
Company was required to enter into a transaction to cap or fix the rate of
interest within 120 days of June 30, 1995. In August 1995, the Company
entered into an agreement with three banks to cap the interest rate at 7.25%,
with the cost to cap the interest rate amounting to $624,000. These costs
are being amortized over the life of the term loan on a straight-line basis.
As discussed in the 10-Q for the second quarter of 1995, effective June
30, 1995, the Company entered into a Credit Agreement with a group of seven
banks providing a revolving credit facility in the initial amount of $55
million. The revolving credit facility has a term of five years.
With the completion of the purchased contract buyback in the second
quarter of 1995, the Company expects minimal financing needs for the
forseeable future.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)
ASSETS Sept. 30, Dec. 31,
1995 1994
---------- ----------
INVESTMENT IN UTILITY PLANT:
Electric plant in service, at original cost $ 293,779 $ 274,830
Less - Accumulated depreciation and amortization 81,006 75,667
---------- ----------
$ 212,773 $ 199,163
Construction in progress 18,596 23,929
---------- ----------
$ 231,369 $ 223,092
Investments in corporate joint ventures:
Maine Yankee Atomic Power Company $ 4,754 $ 4,754
Maine Electric Power Company, Inc. 125 125
---------- -----------
$ 236,248 $ 227,971
---------- ----------
FUNDS HELD BY TRUSTEE, principally at cost $ 21,541 $ -
---------- ----------
OTHER INVESTMENTS, principally at cost $ 4,156 $ 3,482
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 3,605 $ 1,956
Accounts receivable, net of reserve 18,479 19,130
Unbilled revenue receivable 7,302 8,611
Inventories, at average cost:
Material and supplies 2,939 2,992
Fuel oil 464 435
Prepaid expenses 1,231 1,681
Deferred purchased power costs 2,419 235
Current deferred income taxes 1,094
---------- ----------
Total current assets $ 36,439 $ 36,134
---------- ----------
DEFERRED CHARGES:
Investment in Seabrook Nuclear Project, net of
accumulated amortization of $24,651 in 1995
and $23,377 in 1994 $ 34,191 $ 35,465
Costs to terminate purchased power contracts 197,330 36,739
Deferred regulatory asset 30,076 33,537
Prepaid pension costs 2,082
Demand-side management costs 2,115 2,684
Other 5,683 3,156
---------- ----------
Total deferred charges $ 269,395 $ 113,663
---------- ----------
Total assets $ 567,779 $ 381,250
========== ==========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)
Sept. 30, Dec. 31,
STOCKHOLDERS' INVESTMENT AND LIABILITIES 1995 1994
--------- ---------
CAPITALIZATION:
Common stock investment $ 102,812 $ 105,658
Preferred stock 4,734 4,734
Preferred stock subject to mandatory redemption, less
current sinking fund requirements 13,832 13,740
Long-term debt, net of current portion 288,075 116,367
---------- ----------
Total capitalization $ 409,453 $ 240,499
---------- ----------
CURRENT LIABILITIES:
Notes payable - banks $ 38,000 $ 27,000
---------- ----------
Other current liabilities -
Current portion of long-term debt and sinking fund
requirements on preferred stock $ 15,146 $ 2,961
Accounts payable 9,658 14,669
Dividends payable 1,706 2,766
Accrued interest 6,158 3,650
Customers' deposits 356 288
Deferred fuel revenue 2,269 3,025
Income taxes payable 966
---------- ----------
Total other current liabilities $ 35,293 $ 28,325
---------- ----------
Total current liabilities $ 73,293 $ 55,325
---------- ----------
DEFERRED CREDITS AND RESERVES:
Deferred income taxes - Seabrook $ 17,770 $ 18,434
Other accumulated deferred income taxes 48,871 50,084
Deferred regulatory liability 8,647 9,222
Unamortized investment tax credits 2,282 2,415
Accrued pension cost 672
Other 6,791 5,271
---------- ----------
Total deferred credits and reserves $ 85,033 $ 85,426
---------- ----------
Total Stockholders' Investment and Liabilities $ 567,779 $ 381,250
========== ==========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
000's Omitted
(Unaudited)
Sept. 30, Dec. 31,
1995 1994
----------------------
COMMON STOCK INVESTMENT
Common stock, par value $5 per share- $ 36,425 $ 35,926
Authorized -- 10,000,000 shares
Outstanding -- 7,284,903 shares in 1995 and
7,131,385 in 1994
Amounts paid in excess of par value 56,486 55,974
Retained earnings 9,901 13,758
----------------------
Total common stock investment $ 102,812 $ 105,658
----------------------
PREFERRED STOCK-Non participating, cumulative-
Par value $100 per share, authorized 600,000 shares
Not redeemable or redeemable soley at the option
of the issuer-
7%, Noncallable, 25,000 shares, authorized
and outstanding $ 2,500 $ 2,500
4.25%, Callable at $100, 4,840 shares,
authorized and outstanding 484 484
4%, Series A, Callable at $110, 17,500 shares,
authorized and outstanding 1,750 1,750
----------------------
$ 4,734 $ 4,734
----------------------
8.76%, Subject to mandatory redemption requirements-
Callable at 105.63% if called on or prior to
December 27, 1995, 150,000 shares authorized
and outstanding $ 15,332 $ 15,240
Less: Current sinking fund requirements 1,500 1,500
----------------------
$ 13,832 $ 13,740
----------------------
LONG-TERM DEBT
First Mortgage Bonds-
6.75% Series due 1998 $ 2,500 $ 2,500
10.25% Series due 2019 15,000 15,000
10.25% Series due 2020 30,000 30,000
8.98% Series due 2022 20,000 20,000
7.38% Series due 2002 20,000 20,000
7.30% Series due 2003 15,000 15,000
12.25% Series due 2001 9,021 11,128
----------------------
$ 111,521 $ 113,628
Less: Current portion 1,646 1,461
----------------------
Total first mortgage bonds $ 109,875 $ 112,167
----------------------
Variable rate demand pollution control revenue bonds
Series 1983 due 2009 $ 4,200 $ 4,200
----------------------
Other Long-Term Debt-
Finance Authority of Maine - Taxable Electric Rate
Stabilization Revenue Notes, 7.03% Series 1995A,
due 2005 $ 126,000 $ -
----------------------
Medium Term Notes, Variable interest rate- LIBOR
plus 2%, due 2000 $ 60,000 $ -
Less: Current portion 12,000 -
----------------------
$ 48,000 $ -
----------------------
Total long-term debt $ 288,075 $ 116,367
----------------------
Total Capitalization $ 409,453 $ 240,499
======================
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
000's Omitted
(Unaudited)
1995 1994
--------- --------
CASH FLOWS FROM OPERATIONS:
NET INCOME $ 2,425 $ 6,175
Adjustments to reconcile net income to net cash
(used in) provided by operations:
Depreciation and amortization 5,164 3,950
Amortization of Seabrook Nuclear Project 1,274 1,274
Costs to terminate purchased power contract (196,698) --
Amortization of costs to terminate purchased
power contracts 7,133 2,267
Payment received related purchased power contract
termination 1,000 1,000
Cost of early retirement and involuntary
severance plan 3,836 2,801
Base rate case amortizations included in
operation and maintenance 864 705
Allowance for equity funds used during
construction (462) (1,013)
Deferred income tax provision 1,304 3,407
Deferred investment tax credits (133) (134)
Changes in assets and liabilities:
Deferred fuel revenue and purchased power (2,940) 2,261
Receivables, net and unbilled revenue 1,960 2,043
Prepaid pension costs -- (1,113)
Accounts payable (5,011) (3,258)
Accrued interest 2,508 (1,268)
Current and deferred income taxes (220) --
Accrued pension costs 205 --
Accrued postretirement benefit costs 570 620
Other current assets and liabilities, net 542 823
Other, net 3,192 1,239
----------- ----------
Net Cash (Used in) Provided By Operations $ (173,487) $ 21,779
----------- ----------
CASH FLOWS FROM INVESTING:
Construction expenditures $ (12,997) $ (15,198)
Allowance for borrowed funds used during construction (521) (1,116)
----------- ----------
Net Cash (Used in) Investing $ (13,518) $ (16,314)
----------- ----------
CASH FLOWS FROM FINANCING:
Dividends on preferred stock $ (1,185) $ (1,185)
Dividends on common stock (6,065) (6,754)
Payments on long-term debt (2,107) (2,595)
Issuances of common stock:
Public offering 867,500 shares in 1994 -- 14,084
Dividend reinvestment plan (99,760 shares in 1995
and 63,764 in 1994) 1,011 998
Issuances of long-term debt 186,000 --
Short-term debt, net 11,000 (11,000)
----------- ----------
Net Cash Provided By (Used in) Financing $ 188,654 $ (6,452)
----------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS $ 1,649 $ (987)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 1,956 2,387
----------- ----------
CASH AND CASH EQUIVALENTS - END OF NINE MONTHS $ 3,605 $ 1,400
=========== ==========
CASH PAID DURING THE NINE MONTHS FOR:
INTEREST (Net of Amount Capitalized) $ 10,000 $ 8,089
INCOME TAXES 277 --
=========== ==========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
000's Omitted
(Unaudited)
1995 1994
----------- -----------
BALANCE AT JANUARY 1 $ 13,758 $ 17,386
ADD - NET INCOME 2,425 6,175
----------- -----------
$ 16,183 $ 23,561
----------- -----------
DEDUCT:
Dividends -
Preferred stock $ 1,185 $ 1,185
Common stock 5,005 7,062
Other 92 54
----------- -----------
$ 6,282 $ 8,301
----------- -----------
BALANCE AT SEPTEMBER 30 $ 9,901 $ 15,260
========== ==========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(Unaudited)
(1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES:
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, have been condensed or omitted in this Form 10-Q
pursuant to the Rules and Regulations of the Securities and Exchange
Commission. However, in the opinion of Bangor Hydro-Electric Company, the
disclosures contained in this Form 10-Q are adequate to make the information
presented not misleading. The year end condensed balance sheet data was
derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the consolidated financial
statements and the notes thereto and all other information included in the
1994 Form 10-K.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements reflect all adjustments, including normal recurring
accruals, necessary to present fairly the financial position as of September
30, 1995 and the results of operations and cash flows for the periods ended
September 30, 1995 and 1994.
The Company's significant accounting policies are described in the Notes
to the Consolidated Financial Statements included in its 1994 Form 10-K filed
with the Securities and Exchange Commission. For interim reporting purposes,
the Company follows these same basic accounting policies but considers each
interim period as an integral part of an annual period. Accordingly, certain
expenses are allocated to interim periods based upon estimates of such
expenses for the year.
(2) INCOME TAXES:
The following table reconciles a provision calculated by multiplying
income before federal income taxes by the statutory federal income tax rate
to the provisions for federal income taxes:
NINE MONTHS ENDED SEPT.30,
1995 1994
AMOUNT % AMOUNT %
(Dollars in Thousands)
Federal income tax provision
at statutory rate $1,268 34% $3,212 34%
Plus(less)permanent differences
in tax expense resulting
from statutory exclusions
from taxable income 14 - (323) 4
------- --- ------- ---
Federal income tax provision
before effect of temporary
differences $1,282 34% $2,889 30%
Plus(less) temporary differences
that are flowed through for
ratemaking and accounting
purposes 99 3 (20) -
------- --- ------- ---
Federal income tax provision $1,381 37% $2,869 30%
======= === ======= ===
(3) INVESTMENT IN JOINTLY OWNED FACILITIES:
Condensed financial information for Maine Yankee Atomic Power Company
("Maine Yankee"), Maine Electric Power Company, Inc. ("MEPCO"), Bangor-
Pacific Hydro Associates ("BPHA") and Chester SVC Partnership ("Chester") is
as follows:
MAINE YANKEE MEPCO
----------------- -----------------
(Dollars in Thousands)
(Unaudited)
Operations for Nine Months Ended
-------------------------------------
Sept.30, Sept.30, Sept.30, Sept.30,
1995 1994 1995 1994
-------- -------- -------- --------
OPERATIONS:
As reported by investee-
Operating revenues $156,722 $128,496 $41,650 $17,572
======== ======== ======= =======
Earnings applicable to
common stock $ 5,254 $ 5,283 $ 79 $ 79
======== ======== ======= =======
Company's reported equity-
Equity in net income $ 368 $ 370 $ 11 $ 11
Deduct-Effect of
adjusting Company's
estimate to actual - (14) - -
-------- -------- ------- -------
Amounts reported by
Company $ 368 $ 356 $ 11 $ 11
======== ======== ======= =======
MAINE YANKEE MEPCO
--------------- -----------------
(Dollars in Thousands)
(Unaudited)
Financial Position at
Sept.30, Dec. 31, Sept.30, Dec. 31,
1995 1994 1995 1994
-------- -------- -------- --------
FINANCIAL POSITION:
As reported by investee-
Total assets $563,809 $549,910 $ 6,446 $ 6,563
Less-
Preferred stock 18,600 19,200 - -
Long-term debt 98,999 118,666 870 1,730
Other liabilities and
deferred credits 375,137 344,550 4,698 3,955
-------- -------- -------- -------
Net assets $ 71,073 $ 67,494 $ 878 $ 878
======== ======== ======== =======
Company's reported equity -
Equity in net assets $ 4,975 $ 4,725 $ 125 $ 125
(Deduct)add- Effect
of adjusting Company's
estimate to actual (221) 29 - -
--------- -------- -------- -------
Amounts reported by
Company $ 4,754 $ 4,754 $ 125 $ 125
========= ======== ======== =======
BPHA Chester
----------------- -----------------
(Dollars in Thousands)
(Unaudited)
Operations for Nine Months Ended
-------------------------------------
Sept 30, Sept 30, Sept 30, Sept 30,
1995 1994 1995 1994
-------- -------- -------- --------
OPERATIONS:
As reported by investee-
Operating revenues $ 5,453 $ 5,222 $ 3,729 $ 3,910
======= ======== ======= =======
Net Income $ 1,520 $ 820 $ - $ -
======= ======== ======= =======
Company's reported equity
in net income $ 760 $ 410 $ - $ -
======= ======== ======= =======
Financial Position at
Sept 30, Dec. 31, Sept 30, Dec. 31,
1995 1994 1995 1994
-------- -------- -------- --------
FINANCIAL POSITION:
As reported by investee-
Total assets $ 40,898 $ 41,789 $ 30,361 $31,325
Less-
Long-term debt 33,075 34,950 28,499 29,387
Other liabilities 2,201 2,477 1,862 1,938
-------- -------- -------- -------
Net assets $ 5,622 $ 4,362 $ - $ -
======== ======== ======== =======
Company's reported equity
in net assets $ 2,811 $ 2,181 $ - $ -
======== ======== ======== =======
(4) ALTERNATIVE MARKETING PLAN:
With the Maine Public Utilities Commission's (MPUC) order on
February 14, 1995, approving many aspects of the Company's Alternative
Marketing Plan (AMP) proposal, the fuel adjustment clause and deferred
fuel accounting were eliminated effective January 1, 1995. Consequently, in
the first quarter of 1995, base and fuel cost adjustment (FCA) rates were
combined into one overall rate, and the associated revenues have been
reflected as Electric Operating Revenues.
As of January 1, 1995, the Company's collections under the FCA
had exceeded its costs by approximately $3.03 million. The MPUC allowed the
Company to retain the overcollection and ordered that the amount be amortized
over a period of three years beginning January 1, 1995.
(5) MAINE YANKEE OUTAGE:
The Company has a 7% equity investment in the Maine Yankee
nuclear generating plant, which has been a low cost source of power since it
came on line in the early 1970's. As reported in the first quarter of 1995,
when the plant shut down for refueling earlier this year, inspections
resulted in discovering that the steam generator tubes were degrading and
would require extensive repair. After a thorough evaluation, in May it was
determined to resleeve all of the tubes in all three steam generators. The
cost of this repair is estimated at $40 million, of which the Company is
responsible for 7%. The Company accrued for its estimated share of the
resleeving project costs as of June 30, 1995. The resleeving costs are
offset to some extent by O&M savings at Maine Yankee, due to various cost
cutting measures by the Company while the plant is nonoperational. Repairs
are essentially completed, and the plant is anticipated to be operational by
the end of 1995. In addition, the Company is incurring replacement power
costs of approximately $800,000 per month while the plant is off-line.
(6) BUYBACK OF PURCHASED POWER CONTRACTS:
As discussed in the first quarter, earlier in 1995 the Company
negotiated agreements to "buy back" its high-cost commitment to purchase
power from two identical non-utility generating plants. The transaction,
valued at approximately $170 million, was completed on June 30, 1995. Under
AMP the buyback costs have been deferred and recorded as a regulatory asset,
to be amortized and collected over a ten year period, beginning July 1, 1995.
The buyback was financed entirely with new debt instruments. The
Company entered into a loan agreement with the Finance Authority of Maine
(FAME), which issued and sold $126 million of revenue notes, bearing interest
at a rate of 7.03%, which the Company is obliged to repay. Of that amount,
$105 million was made available to the Company to fund a portion of the
buyback transaction, and approximately $21 million has been set aside in a
debt service reserve fund which, absent the Company's default, will be used
to pay the final installments of principal and interest on the notes at
maturity in 2005. In order to secure the FAME notes, the Company executed a
new General and Refunding Mortgage Indenture and Deed of Trust establishing a
second mortgage on the Company's property, and issued bonds to FAME under the
new mortgage in the amount of $126 million.
The remainder of the buyback was financed by a new credit
agreement with a group of seven banks. The credit agreement consists of a
revolving credit facility in the initial amount of $55 million and a term
loan in the amount of $60 million. The revolving credit facility replaces
the Company's short-term credit facilities that existed prior to the closing
of this transaction, has a term of five years, and also provides for the
issuance of a letter of credit required to support $4.2 million of the
Company's Pollution Control Revenue Bonds. To secure the existing letter of
credit related to the Pollution Control Revenue Bonds, until the new letter
of credit could be issued, the Company deposited approximately $4.4 million
of the proceeds from this financing with a third party trustee. These funds
were released to the Company upon the issuance of the new letter of credit in
August 1995. The term loan, used to finance a portion of the buyback, also
has a five year term and requires annual principal payments of $12 million
beginning in June 1996. Borrowings under the credit agreement are at
variable rates, but the interest rate on the term loan was required to be
fixed or capped within 120 days of the closing. In August 1995, the Company
entered into agreements with three banks to cap the interest rate at 7.25%,
with the cost to cap the interest rate amounting to $624,000. These costs
are being amortized over the life of the term loan on a straight-line basis.
The Company issued $115 million of non-interest bearing First Mortgage Bonds
as security for the credit agreement.
The debt instruments executed in connection with this financing
contain a number of covenants and restrictions that the Company believes to
be usual and customary for such a transaction, including
a limitation on the aggregate amount of indebtedness the Company may incur
and restrictions on the payment of dividends.
(7) EARLY RETIREMENT AND INVOLUNTARY SEVERANCE PROGRAM:
In the third quarter of 1995 the Company implemented an early
retirement and involuntary severance plan, which resulted in approximately a
10% reduction in the Company's workforce. The cost of the program, amounting
to $3.9 million, was charged to other operation and maintenance expense in
the third quarter of 1995.
(8) RECLASSIFICATIONS:
Certain 1994 amounts have been reclassified to conform with the
presentation used in Form 10-Q for the quarter ended September 30, 1995.
BANGOR HYDRO-ELECTRIC COMPANY
FORM 10-Q FOR PERIOD ENDING SEPTEMBER 30, 1995
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS -
Exhibit 4.1 Loan Agreement by and between Finance Authority of Maine and
Bangor Hydro-Electric Company.
Exhibit 4.2 Credit Agreement Dated as of June 30, 1995 among Bangor Hydro-
Electric Company, the banks named therein, Chemical Bank, as Administrative
Agent and Fleet Bank of Maine and the First National Bank of Boston, as Co-
Agents.
Exhibit 4.3 Purchase Contract dated as of June 28, 1995 among the Finance
Authority of Maine and Bangor Hydro-Electric Company and Prudential
Securities Incorporated.
Exhibit 4.4 General and Refunding Mortgage Indenture and Deed of Trust -
Bangor Hydro-Electric Company to Chemical Bank, As Trustee Dated as of June
1, 1995.
Exhibit 4.5 Supplemental Indenture Dated as of June 15, 1995 to General and
Refunding Mortgage Indenture and Deed of Trust dated as of June 1, 1995
(Bangor Hydro-Electric Company to Chemical Bank).
Exhibit 4.6 Supplemental Indenture Dated as of June 29, 1995 to Mortgage and
Deed of Trust dated as of July 1, 1936 (Bangor Hydro-Electric Company to
Citibank, N.A. As Trustee).
Exhibit 10.1 Purchase agreement between Babcock-Ultrapower Jonesboro and
Bangor Hydro-Electric Company.
Exhibit 10.2 Purchase agreement between Babcock-Ultrapower West Enfield and
Bangor Hydro-Electric Company.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter for which this report is
submitted.
BANGOR HYDRO-ELECTRIC COMPANY
FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 1995
The information furnished in this report reflects all adjustments which
are, in the opinion of management, necessary to a fair statement of the
results for the interim period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BANGOR HYDRO-ELECTRIC COMPANY
(Registrant)
/s/ Frederick S. Samp
Dated: November 10, 1995 ______________________________
Frederick S. Samp
Vice President - Finance & Law
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Bangor
Hydro-Electric Company's Form 10-Q for the third quarter of 1995 and is
qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000009548
<NAME> BANGOR HYDRO-ELECTRIC COMPANY
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 212,773
<OTHER-PROPERTY-AND-INVEST> 49,172
<TOTAL-CURRENT-ASSETS> 36,439
<TOTAL-DEFERRED-CHARGES> 269,395
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 567,779
<COMMON> 36,425
<CAPITAL-SURPLUS-PAID-IN> 56,486
<RETAINED-EARNINGS> 9,901
<TOTAL-COMMON-STOCKHOLDERS-EQ> 102,812
13,832
4,734
<LONG-TERM-DEBT-NET> 288,075
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 38,000
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 13,646
1,500
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 105,180
<TOT-CAPITALIZATION-AND-LIAB> 567,779
<GROSS-OPERATING-REVENUE> 137,982
<INCOME-TAX-EXPENSE> 1,156
<OTHER-OPERATING-EXPENSES> 121,846
<TOTAL-OPERATING-EXPENSES> 123,002
<OPERATING-INCOME-LOSS> 14,980
<OTHER-INCOME-NET> 645
<INCOME-BEFORE-INTEREST-EXPEN> 15,625
<TOTAL-INTEREST-EXPENSE> 13,200
<NET-INCOME> 2,425
1,276
<EARNINGS-AVAILABLE-FOR-COMM> 1,149
<COMMON-STOCK-DIVIDENDS> 5,005
<TOTAL-INTEREST-ON-BONDS> 16,245
<CASH-FLOW-OPERATIONS> (173,487)
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
LOAN AGREEMENT
by and between
FINANCE AUTHORITY OF MAINE
and
BANGOR HYDRO-ELECTRIC COMPANY
relating to the
$126,000,000
FINANCE AUTHORITY OF MAINE
TAXABLE ELECTRIC RATE STABILIZATION REVENUE NOTES
SERIES 1995A (BANGOR HYDRO-ELECTRIC COMPANY)
DATED AS OF JUNE 1, 1995
LOAN AGREEMENT
This Loan Agreement, dated as of June 1, 1995, is entered into by and
between the FINANCE AUTHORITY OF MAINE, a public body politic and corporate
and a duly created and validly existing agency of the State of Maine, and
BANGOR HYDRO-ELECTRIC COMPANY, a corporation organized and existing under the
laws of the State of Maine.
WHEREAS, the Act authorizes the Authority to issue revenue obligation
securities to assist in financing eligible projects within the State and to
provide credit enhancement by establishing capital reserve funds to secure
the payment of principal and interest on such securities; and
WHEREAS, the Borrower proposes to undertake an eligible project
consisting of the Project, which has been approved by the Authority; and
WHEREAS, the Authority has issued its revenue obligation securities
referred to as Taxable Electric Rate Stabilization Revenue Notes Series 1995A
(Bangor Hydro-Electric Company), which Notes are not a debt or liability of
the Authority, the State or any municipality therein or any political
subdivision thereof, or a pledge of the faith and credit of the State or any
political subdivision thereof, but are limited obligations of the Authority
payable solely out of the Trust Estate; and
WHEREAS, the Authority has issued a conditional Financing Commitment to
the Borrower, pursuant to which the Authority agreed to use a portion of Note
proceeds to fund the Loan to the Borrower in the original principal amount of
$105,000,000; and
WHEREAS, the Authority has issued the Notes in the amount of
$126,000,000 in part for the purpose of funding the Loan, the remainder of
the Notes to be used to establish a Capital Reserve Fund; and
WHEREAS, the Borrower has agreed to accept the Loan of a portion of the
proceeds of the Notes, evidenced by the Second Mortgage Bonds, under the
terms and conditions set forth herein; and
WHEREAS, the Borrower acknowledges that the Authority is providing
partial financing for the Project from a portion of the proceeds of the sale
of the Notes in accordance with the purposes of the Act, that the
accomplishment of these purposes is dependent upon compliance of the Borrower
with its covenants contained in this Agreement, and that the Project is in
furtherance of a public purpose.
W I T N E S S E T H:
IN CONSIDERATION of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided that in
the performance of the agreements of the Authority herein contained, any
obligation it may hereby incur for the payment of money shall not create a
pecuniary liability or a charge against the general credit of the Authority
or the general credit or taxing powers of the State or any municipality
therein or political subdivision thereof, but shall be payable solely out of
the Trust Estate).
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS. All words and terms defined in the Indenture
shall have the same meanings in this Loan Agreement, unless otherwise
specifically defined herein. In addition, the following words and terms as
used in this Loan Agreement, including the preambles hereto, shall have the
following meanings unless some other meaning is plainly intended:
"ACT" means the Finance Authority of Maine Act: Title 10, Chapter 110,
Maine Revised Statutes, as amended.
"ADDITIONAL COVENANTS" shall mean those covenants, warranties,
representations and agreements set forth in Exhibit A hereto.
"ADDITIONAL PAYMENTS" means the amounts required to be paid by the
Borrower pursuant to the provisions of the Second Mortgage Bonds and
Section 4.3 hereof.
"AGREEMENT" or "LOAN AGREEMENT" means this Loan Agreement between the
Authority and the Borrower, as the same may be amended or supplemented from
time to time.
"AUTHORITY" OR "ISSUER" means the FINANCE AUTHORITY OF MAINE, a body
corporate and politic and a public instrumentality of the State, duly
organized and existing under the laws of the State, and any body, board,
authority, agency or other political subdivision or instrumentality of the
State which shall hereafter succeed to the powers, duties and functions
thereof.
"AUTHORITY DOCUMENTS" means, collectively, those Financing Documents
executed by the Authority.
"AUTHORIZED BORROWER REPRESENTATIVE" means the person at the time
designated to act on behalf of the Borrower by written certificate furnished
to the Authority and the Trustee containing the specimen signature of such
person and signed on behalf of the Borrower by its President, any of its Vice
Presidents, its Secretary, or its Treasurer. Such certificate may designate
one or more alternate representatives.
"AUTHORIZED ISSUER REPRESENTATIVE" means the Chairperson, Vice-
Chairperson, Chief Executive Officer, General Counsel, Deputy General
Counsel, Director of Finance or Director of Business Development.
"BORROWER" means Bangor Hydro-Electric Company, a corporation organized
and existing under the laws of the State of Maine, its permitted successors
and assigns, and any surviving, resulting or transferee corporation permitted
under this Loan Agreement.
"BORROWER DOCUMENTS" means, collectively, all documents and agreements
executed and delivered by the Borrower as security for or in connection with
the issuance of the Notes, including those Financing Documents executed by
the Borrower.
"BORROWER INDENTURE" means, together, that certain General and Refunding
Mortgage Indenture and Deed of Trust, dated as of June 1, 1995, between the
Borrower and Chemical Bank, and the Supplemental Indenture between the
Borrower and Chemical Bank, as trustee, supplemental thereto, each as
heretofore from time to time or at any time supplemented, modified or amended
by supplemental indentures.
"BORROWER'S CONTRIBUTION" means the amount of at least $68,000,000,
which amount may be part of the proceeds of a loan (other than the Loan) to
the Borrower from a Person not affiliated with the Borrower.
"CAPITAL RESERVE NOTE PORTION" means the $21,191,940 in aggregate
principal amount of the Notes, the proceeds of which are to be deposited in
the Capital Reserve Fund, and which Notes shall be the latest maturing
$21,191,940 Principal Balance of Outstanding Notes.
"CAPITAL RESERVE FEE" means that annual fee, which shall be payable by
the Borrower to the Authority, initially established in an amount equal to
fifteen basis points (.15%) of the outstanding Loan balance, which amount may
be changed from time to time by written agreement between the Authority and
the Borrower. The Capital Reserve Fee shall be paid upon funding of the Loan
and on each annual anniversary thereof.
"CONTRACTS" means, collectively, the power purchase contracts between
the Borrower and Babcock-Ultrapower West Enfield in the Town of West Enfield,
Maine and between the Borrower and Babcock-Ultrapower Jonesboro in the Town
of Jonesboro, Maine.
"EVENT OF DEFAULT" means any of the events described as an Event of
Default in Section 8.1 hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
including the regulations promulgated thereunder, from time to time.
"FINANCING DOCUMENTS" means the Borrower Indenture, the Second Mortgage
Bonds and this Loan Agreement.
"INDEBTEDNESS" means, as to the Borrower or any Subsidiary, at a
particular time, (a) all indebtedness for borrowed money of, or guaranteed
by, the Borrower or such Subsidiary, (b) all indebtedness for borrowed money
secured by any Lien on any property owned by the Borrower or any Subsidiary,
even though the Borrower or such Subsidiary has not assumed or become liable
for the payment thereof, (c) obligations of the Borrower or any Subsidiary
under leases which the Borrower or such Subsidiary has or should have, in
accordance with generally accepted accounting principles, capitalized,
(d) all obligations owed by the Borrower or any Subsidiary for all or any
portion of the deferred purchase price of property or services which the
Borrower or such Subsidiary has or should have, in accordance with generally
accepted accounting principles, capitalized, and (e) all obligations of the
Borrower or any Subsidiary incurred in connection with any letter of credit
or note insurance policy with respect to which the issuer thereof has made
any payment or disbursement.
"INDENTURE" means the Trust Indenture of even date herewith between the
Authority and the Trustee pursuant to which the Notes will be issued and all
of the Authority's interest in this Agreement (except Unassigned Issuer's
Rights unless otherwise specifically provided herein) will be assigned and
pledged as security for the payment of principal of and interest on the
Notes.
"LOAN" means the loan by the Issuer to the Borrower of the proceeds of
sale of the Project Note Portion.
"LOAN PAYMENTS" means the amounts required to be paid by the Borrower in
repayment of the Loan pursuant to the provisions of the Second Mortgage Bonds
and Sections 4.1 and 4.2 hereof.
"LOAN PURPOSES" means the Project.
"PERSON" or "PERSON" means and includes any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"PLEDGED REVENUES" means all payments, revenues, and receipts derived
from this Agreement other than (i) payment of fees, taxes, and other
governmental charges, indemnification and attorneys' fees, and other expenses
pursuant hereto, and (ii) Unassigned Issuer's Rights, and (iii) Shared
Rights, except that with respect thereto rights of enforcement may be
exercised by the Trustee either jointly or severally with the Issuer and
rights to consent to the modification thereof or to waive compliance
therewith may be exercised by the Trustee jointly with the Issuer but not
severally.
"PROJECT" means the Borrower's electric rate stabilization project
involving the buy back of the Contracts.
"PROJECT COSTS" means all costs, fees, and expenses attributable to the
Project, including, but not limited to, all costs of issuance of the Notes,
and all other costs, fees and expenses payable or reimbursable to the
Authority pursuant to the Inducement Agreement (Taxable Bond) dated as of
May 1, 1995, between the Authority and the Borrower.
"PROJECT NOTE PORTION" means, subject to adjustment pursuant to Section
3.1 hereof, the $104,808,060 in aggregate principal amount of the Notes the
proceeds of which are to be lent to the Borrower for the Project, which Notes
shall be the Notes other than the Capital Reserve Note Portion.
"REPAYMENT INSTALLMENT" means any amount that the Borrower is required
to pay directly to the Trustee pursuant to Section 4.2(c) of this Agreement
as a repayment of the Loan, which amount is determined in accordance with
Section 4.2(c) hereof.
"SECOND MORTGAGE BONDS" means the General and Refunding Mortgage Bonds,
Series A, of the Borrower issued in accordance with Section 4.2 of this
Agreement and secured under the Borrower Indenture.
"SHARED RIGHTS" means all of the rights of the Issuer to enforce and
consent to the modification of or waiver of compliance with the Second
Mortgage Bonds.
"SIGNIFICANT SUBSIDIARY" means, at the time any determination thereof is
to be made, any Subsidiary which, as of the end of the next preceding fiscal
quarter, had assets, revenues or net worth which comprised not less than 15%
of the total assets, revenues or net worth, as the case may be, of the
Borrower and its Subsidiaries taken as a whole as of the end of such quarter.
"SUBSIDIARY" means a corporation of which the Borrower and/or its or
their other Subsidiaries own, directly or indirectly, such number of
outstanding shares as have more than 50% of the ordinary voting power for the
election of directors.
"UNASSIGNED ISSUER'S RIGHTS" means all of the rights of the Issuer
(a) to enforce and consent to the modification of or waiver of compliance
with, the conditions and covenants of the Borrower referred to in
Sections 6.7, 6.11 and 7.1 hereof; (b) to receive Additional Payments under
the Second Mortgage Bonds and Section 4.3 hereof; (c) under Section 6.2
hereof; (d) under Section 6.5 hereof; (e) to give or withhold consent to
amendments, changes, modifications, alterations and termination of this
Agreement under Section 9.6 hereof and in the definition of Capital Reserve
Fee contained in Section 1.1 hereof; and (f) to receive notices hereunder,
and in each such case any corresponding rights under the Second Mortgage
Bonds. Unassigned Issuer's Rights does not include any rights of the Trustee
under the foregoing Sections and provisions, including but not limited to its
right to receive Additional Payments under the Second Mortgage Bonds and
Section 4.3(b) hereof.
SECTION 1.2 RULES OF CONSTRUCTION.
(a) Words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders. Unless the
context shall otherwise indicate, the words "Note," "owner," "Noteholder,"
and "person" or "Person" shall include the plural as well as the singular
number.
(b) The Table of Contents, captions, and headings in this Loan
Agreement are for convenience only and in no way limit the scope or intent of
any provision or section of this Loan Agreement.
(c) All references herein to particular articles or sections are
references to articles or sections of this Loan Agreement unless some other
reference is indicated.
(d) All references herein to the Act or any particular provision or
section thereof shall be deemed to refer to any successor, or successor
provision or section, thereof, as the case may be.
(e) Nothing contained in this Agreement or any of the Financing
Documents or otherwise shall be construed to cause the Borrower to become the
agent for the Authority or the Trustee for any purpose whatsoever, nor shall
the Authority or the Trustee be regarded as an agent for the Borrower unless
specifically so provided, or be responsible for any shortage, discrepancy,
damage, loss or destruction of any part of the Project wherever located or
for whatever cause.
(f) All approvals, consents and acceptances required to be given or
made by any person or party hereunder shall be at the sole discretion of the
party whose approval, consent or acceptance is required.
(g) This Agreement shall be governed by and construed in accordance
with the applicable laws of the State.
(h) If any portion of any provision of the Agreement shall be ruled
invalid by any court of competent jurisdiction, the invalidity or such
portion shall not affect the remainder of such provision or any of the
remaining provisions hereof.
(i) Any reference to any person shall be deemed to include the heirs,
personal representatives, successors and assigns (of the Borrower, only to
the extent permitted hereunder, or otherwise permitted in writing by the
Authority) of such person, unless the context clearly indicates otherwise.
(j) Any reference to a period of days shall be deemed to mean a period
of calendar days, unless Business Days are specified.
(k) Any references herein or in the Financing Documents to any of the
Financing Documents, the Indenture or the Notes shall be deemed to include
any amendments, modifications, supplements, replacements, substitutions,
allonges, appendices, attachments, exhibits and schedules thereto or
therefor, now existing or hereafter created.
ARTICLE II
REPRESENTATIONS AND UNDERTAKINGS
SECTION 2.1 REPRESENTATIONS BY THE AUTHORITY. The Authority makes the
following representations as the basis for the undertakings on its part
herein contained:
(a) The Authority is a public body politic and corporate and a duly
created and validly existing agency of the State and is authorized and
empowered by the provisions of the Act to enter into the transactions
contemplated by the Authority Documents and the Notes. The Project
constitutes and will constitute an "eligible project" within the meaning of
the Act. By proper action by the Authority, the Authority has been duly
authorized to execute and deliver this Agreement and the Indenture, to issue
and deliver the Notes and to use the proceeds thereof to provide funds for
the Project;
(b) The Authority has taken all action and has complied with all
provisions of law, including without limitation the Act, with respect to the
execution, delivery and performance of the Authority Documents and the Notes
and the due authorization of the consummation of the transactions
contemplated hereby and thereby, and the taking of any and all actions as may
be required on the part of the Authority to carry out, give effect to and
consummate such transaction; and the Authority Documents and the Notes have
been duly executed and delivered by, and constitute the legal, valid, and
binding agreements or obligations of, the Authority, enforceable in
accordance with their respective terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights or the enforcement thereof and by general
principles of equity; and
(c) The execution and delivery of the Authority Documents and the
Notes, the consummation of the transactions contemplated hereby and thereby,
and the fulfillment of or compliance with the terms hereof and thereof do not
and will not conflict with or constitute on the part of the Authority a
violation of, breach of, or default under any constitutional provision or
statute or any agreement or instrument to which the Authority is a party or
by which the Authority is bound, or any order, rule, regulation or ordinance
of any court or governmental agency or body having jurisdiction over the
Authority or any of its activities or property; and all consents, approvals,
authorizations and orders of governmental or regulatory authorities, if any,
which are required for the consummation of the transactions contemplated in
the Financing Documents and the Notes have been obtained.
SECTION 2.2 REPRESENTATIONS BY THE BORROWER. The Borrower makes the
following representations as the basis for the undertakings on its part
herein contained:
(a) The Borrower is a corporation duly incorporated and validly
existing under the laws of the State, is in good standing under the laws of
the State and has the power to enter into and perform the transactions
contemplated by the Borrower Documents;
(b) By proper corporate action, the Borrower has duly authorized the
execution and delivery of the Borrower Documents and the consummation of the
transactions contemplated hereby and thereby, and the taking of any and all
actions as may be required on the part of the Borrower to carry out, give
effect to and consummate such transactions; and the Borrower Documents have
been duly executed and delivered by, and constitute legal, valid, and binding
agreements of, the Borrower, enforceable in accordance with their respective
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights or
the enforcement thereof and by general principles of equity;
(c) The Borrower certifies that the Project Costs will be not less than
$172,000,000;
(d) The execution and delivery of the Borrower Documents, the
consummation of the transactions contemplated hereby and thereby, and the
fulfillment of or compliance with the terms and conditions of the Borrower
Documents do not (i) conflict with or result in a breach of any of the terms,
conditions, or provisions of its corporate charter, its bylaws or any
agreement or instrument to which the Borrower is now a party or by which it
is bound, (ii) constitute a default under any of the foregoing, (iii) except
as contemplated hereby, result in the creation or imposition of any lien,
charge, or encumbrance of any nature whatsoever upon any of the property or
assets of the Borrower under the terms of any instrument or agreement to
which the Borrower is now a party or by which it is bound, or (iv) violate
any provision of law or any regulation applicable to the Borrower or any
applicable writ or decree of any court or governmental authority having
jurisdiction over the Borrower or any of its activities or property; and
(e) The Borrower consents to the references to it in the Preliminary
Confidential Private Placement Memorandum dated June 19, 1995 and the
Confidential Private Placement Memorandum dated June 28, 1995 relating to the
Notes. With respect to the Borrower, the Preliminary Confidential Private
Placement Memorandum did not as of its date, and the Confidential Private
Placement Memorandum did not as of its date and will not as of the date of
delivery of the Notes to the initial purchasers thereof, contain (or
incorporate by reference) an untrue statement of a material fact or omit to
state (or incorporate by reference) a material fact necessary to make the
statements therein (or incorporated by reference), in light of the
circumstances under which they were made, not misleading.
ARTICLE III
THE PROJECT; ISSUANCE OF THE NOTES;
PROJECT FUND
SECTION 3.1 AGREEMENT TO COMPLETE THE PROJECT. The Borrower agrees
that it will exercise due diligence to complete, or cause to be completed,
the Project as promptly as practicable after receipt by the Trustee of
proceeds from the sale of the Notes. Upon the deposit by the Authority in
the Project Fund of the proceeds of the Project Note Portion, the Borrower
will pay at least $68,000,000 of Project Costs with the Borrower's
Contribution and furnish the Authority with evidence acceptable to the
Authority of such payment. In the event that the Project Costs are less than
$172,000,000, the Project Note Portion shall be reduced by the amount that
the Project Costs are less than $172,000,000.
SECTION 3.2 AGREEMENT TO ISSUE THE NOTES; APPLICATION OF NOTE PROCEEDS.
In order to provide the Borrower, by way of a loan, with funds for the
payment of a portion of the Project Costs, the Authority agrees that it will
sell and cause to be delivered to the purchasers thereof the Notes in the
aggregate principal amount of $126,000,000 and will thereupon deposit in the
Note Fund the premium, if any, received on the sale of the Notes, deposit in
the Project Fund $103,913,460 of the proceeds received from said sale
(subject to reduction pursuant to Section 3.1), and deposit in the Capital
Reserve Fund the balance of the proceeds received from said sale, but in the
case of the latter deposit no less than $21,191,940.
SECTION 3.3 DISBURSEMENTS FROM THE PROJECT FUND. Moneys in the Project
Fund shall be disbursed and used for the payment of the Project Costs in
accordance with the provisions of the Indenture.
SECTION 3.4 BORROWER REQUIRED TO PAY COSTS IN EVENT PROJECT FUND
INSUFFICIENT. In the event the moneys in the Project Fund available for
payment of the Project Costs shall not be sufficient to pay such costs in
full, the Borrower agrees to complete, or cause to be completed, the Project
and to pay, or cause to be paid, all that portion of the Project Costs as may
be in excess of the moneys available therefor in the Project Fund; provided
that in any event, the Borrower shall pay at least $68,000,000 of the Project
Costs by the Borrower's Contribution. The Authority does not make any
warranty, either express or implied, that the moneys which will be paid into
the Project Fund and which, under the provisions of this Agreement, will be
available for payment of the Project Costs, will be sufficient to pay all the
costs which have been or will be incurred in that connection. The Borrower
agrees that if, notwithstanding the exhaustion of the moneys in the Project
Fund, it shall not have been fully reimbursed for the Project Costs, it shall
not be entitled to any reimbursement therefor from the Authority or from the
Trustee or from the Holders of any of the Notes, nor shall it be entitled to
any postponement, abatement, or diminution of the payments required by this
Agreement. The obligation of the Borrower to complete, or cause to be
completed, the Project shall survive any termination of this Agreement.
SECTION 3.5 AUTHORIZED BORROWER REPRESENTATIVE AND SUCCESSORS. The
Borrower shall designate, in the manner prescribed in Section 1.1 hereof, the
Authorized Borrower Representative. In the event that any person so
designated and his alternate or alternates, if any, should become unavailable
or unable to take any action or make any certificate provided for or required
in this Agreement, a successor shall be appointed in the same manner.
ARTICLE IV
EFFECTIVE DATE AND DURATION OF THIS AGREEMENT; REPAYMENT
PROVISIONS; AND UNCONDITIONAL OBLIGATION OF THE BORROWER
SECTION 4.1 EFFECTIVE DATE AND DURATION OF THIS AGREEMENT. This
Agreement and the covenants of the Borrower hereunder shall become effective
upon its delivery, and shall continue in full force and effect until the
principal of and interest on the Notes, together with all sums to which the
Authority or the Trustee are entitled hereunder, shall have been fully paid
(or provision for such payment has been made in accordance with the
provisions of the Indenture); provided, however, that the Borrower's
obligations under Sections 4.3 (but only to the extent such obligations have
vested prior to termination) and 6.5 hereof shall survive termination of this
Agreement.
SECTION 4.2 LOAN CLAUSES; SECOND MORTGAGE BONDS.
(a) Subject to the conditions and in accordance with the terms and
provisions of this Agreement, the Authority agrees to lend to the Borrower
the Project Note Portion of the proceeds received from the sale of the Notes,
which amount has been set aside from the proceeds of the sale of the Notes in
accordance with the Indenture and with this Agreement.
(b) To evidence, secure and provide for the repayment of the Loan, and
to evidence, secure and provide for the payment of Additional Payments, the
Borrower hereby and concurrently herewith delivers to the Authority its
Second Mortgage Bonds, of like principal amount, maturity date and interest
rate as the Notes and providing for the Additional Payments thereunder. The
Second Mortgage Bonds are not subject to redemption prior to maturity unless
the Trustee has advised the trustee under the Borrower Indenture that the
principal amount of the Notes then Outstanding has been declared due and
payable pursuant to Section 7.03 of the Indenture. The Borrower agrees to
repay the Loan and pay the Additional Payments in accordance with the terms
of the Second Mortgage Bonds, this Agreement and all other Financing
Documents. The originally scheduled Loan principal payments are shown on
Exhibit C hereto.
(c) The Borrower acknowledges receipt of a copy of the Indenture. The
Borrower agrees to make the payments required by this subsection (c) (to the
extent such payments are not timely provided for by the payment of principal
of and interest on the Second Mortgage Bonds) as Repayment Installments on
the Loan. The Borrower agrees to pay, or cause to be paid, as a Repayment
Installment on the Loan, an amount which, when added to other moneys
available therefor in the Note Fund, will be sufficient to pay the principal
of and interest on the Notes due and payable on each Interest Payment Date
and Principal Payment Date, whether at maturity or upon declaration
accelerating the maturity in accordance with the Indenture. With respect to
all payments due hereunder, time is of the essence. All payments on the
Second Mortgage Bonds and Additional Payments required by the Second Mortgage
Bonds and Section 4.3(b) hereof must be paid in immediately available funds
as and when due, to the Trustee for the account of the Authority, at the
principal corporate trust office of the Trustee or at such other place in the
United States as the Trustee may direct in writing, by wire transfer, not
later than 11:00 a.m., New York time on the second Business Day next
preceding the day on which any payment with respect to the Project Note
Portion of the Notes is due and payable.
(d) In any event, each payment on the Second Mortgage Bonds, together
with any other payments required to be made pursuant to Section 4.2(c), shall
be sufficient to pay the amount of principal (whether at maturity or by
acceleration, or on any other Principal Payment Date, as provided herein and
in the Indenture) and interest payable with respect to the Notes on the due
date, and all Additional Payments. If, on any due date for payments with
respect to the Notes, the balance in the Note Fund under the Indenture is
insufficient to make such payments, the Borrower agrees to immediately pay
the amount of the deficiency as a Repayment Installment upon notice (which
may be telephonic or as otherwise provided herein) of such deficiency
(provided that this provision shall not be deemed a waiver of any default in
payment of amounts due as and when due and payable). The sufficiency of
amounts in the Note Fund or any other fund established pursuant to the
Indenture to pay the next succeeding payment due on the Notes shall not
relieve the Borrower of its obligation to make all payments due under this
section and on the Second Mortgage Bonds as and when due.
(e) Upon the occurrence of any Event of Default under the Indenture
because of which the Trustee has declared an acceleration of principal and
accrued interest on the Notes under Section 7.03 thereof, written notice of
which acceleration has been given by the Trustee to the Authority, the
Authority, or the Trustee on the Authority's behalf, may declare the
principal amounts payable under this Section for the remainder of the term of
the Loan Agreement, and under the Second Mortgage Bonds, and the interest
accrued and unpaid thereon, to be immediately due and payable, whereupon the
same shall become immediately due and payable. In such event, the Authority
and the Trustee shall have access to and may inspect, examine and make copies
of the Borrower books and records and any and all of the Borrower's accounts,
data, and income and other tax returns, and may take whatever action at law
or in equity may appear necessary or desirable to collect such amounts then
due and thereafter to become due, or to enforce performance and observance of
any obligation, agreement or covenant of the Borrower under this Loan
Agreement or the Second Mortgage Bonds.
SECTION 4.3 ADDITIONAL AMOUNTS PAYABLE.
(a) The Borrower hereby further expressly agrees to pay to the
Authority or the Trustee, as applicable, as and when the same shall become
due, (i) the fees, including without limitation the Capital Reserve Fee and
the Loan Origination Fee, and reasonable expenses of the Authority as
provided in the Financing Documents, (ii) the reasonable fees, charges and
expenses of the Authority and the Trustee in connection with or arising out
of or relating to the issuance and servicing of the Notes, the making,
servicing, administration or collection of the Loan or exercise of any rights
or responsibilities under the Financing Documents, the Indenture or the
Notes, including reasonable charges of counsel, (iii) the reasonable fees and
charges of the Trustee, any Authenticating Agent, and any Paying Agent for
services, including reasonable charges of counsel, rendered by it directly or
indirectly in connection with the Loan or the Notes, including, without
limitation, charges for services rendered as Trustee and Paying Agent on the
Notes, and (iv) the initial fees and charges of S&P.
(b) The Borrower further hereby expressly agrees to pay to the Trustee,
as and when the same shall become due, the amounts required by
Section 5.04(e) of the Indenture.
(c) The Borrower also agrees to pay all amounts payable by it under the
Financing Documents, including without limitation Section 6.5 hereof, at the
time, in the manner and to the party therein provided, without delay,
reduction or offset of any kind or for any reason.
(d) In the event the Borrower shall fail to make, or cause to be made,
any of the payments required hereby, the unpaid item or installment shall
continue as an obligation of the Borrower until such amount shall have been
fully paid, and the Borrower agrees to pay, or cause to be paid, the same
with interest thereon from the date of failure or, in the case of payments
required by Sections 4.3(a)(ii) and (iii) hereof, the date 30 days after the
date on which the Borrower is notified thereof, at the interest rate borne by
the Notes until fully paid.
SECTION 4.4 MANNER OF PAYMENTS. The Loan Payments provided for in this
Agreement shall be made as required by Section 4.2 directly to or at the
direction of the Trustee. The Additional Payments provided for herein and in
the Second Mortgage Bonds shall be made in the same manner directly to the
entitled party, which in the case of the Additional Payments specified in
Section 4.3(b) hereof shall be the Trustee, and shall be made in the same
manner and by the same time of day as provided herein for Loan Payments. In
the event a party entitled to payment directs in writing that such payment be
made to another party in the United States, the Borrower shall make payments
to such designee.
SECTION 4.5 OBLIGATIONS OF THE BORROWER HEREUNDER UNCONDITIONAL.
(a) The obligations of the Borrower to make, or cause to be made, the
payments required herein and under the Second Mortgage Bonds and to perform
and observe the other agreements on its part contained herein and in the
Financing Documents shall be absolute and unconditional, irrespective of any
defense or any rights of set-off, recoupment, or counterclaim it might have
against the Authority or the Trustee. The Borrower shall pay, or cause to be
paid, all payments required hereunder and under the Second Mortgage Bonds,
free of any deductions and without postponement, abatement, set-off or
diminution; and until such time as the principal of and interest on the Notes
and all other amounts due hereunder shall have been fully paid, or provision
for the payment thereof shall have been made in accordance with the
Indenture, the Borrower:
(i) shall not suspend or discontinue, or cause to be suspended or
discontinued, any such payments required hereby or under the
Financing Documents:
(ii) shall perform and observe all of its other agreements
contained in this Agreement and the Financing Documents; and
(iii) shall not terminate this Agreement (other than as provided
herein)
for any cause, including, without limiting the generality of the foregoing,
the occurrence of any acts or circumstances that may constitute failure of
consideration; commercial frustration of purpose; any change in the tax or
other laws of the United States of America or of the State or any political
subdivision of either thereof; any failure of the Authority to perform and
observe any agreement, whether express or implied, or any duty, liability, or
obligation arising out of or connected with this Agreement, the Financing
Documents or Indenture; or failure of the Project to comply with any statute,
rule, or regulation now or hereafter made applicable thereto. Except to the
extent provided in this Subsection (a), nothing contained in this Subsection
(a) shall be construed to prevent or restrict the Borrower from asserting any
rights it may have against the Authority, the Trustee or any other Person
under the Financing Documents or the Indenture or under any provisions of
law.
(b) Any draw upon the Capital Reserve Fund to make a payment of
principal of or interest on any Notes shall not cure or waive any obligation
of the Borrower to make any Loan Payment or Additional Payment that otherwise
would have been used to satisfy such principal or interest payments.
SECTION 4.6 SECURITY CLAUSES.
(a) The Authority hereby notifies the Borrower and the Borrower
acknowledges that, among other things, Borrower's Loan Payments evidenced
hereby and by the Second Mortgage Bonds and all of the Authority's right,
title and interest under this Agreement and the Second Mortgage Bonds (except
Shared Rights, which with respect to rights of enforcement may be exercised
by the Authority and the Trustee jointly or severally, and with respect to
rights of consent to the modification of or waiver of compliance may be
exercised by the Authority and the Trustee jointly but not severally, and
Unassigned Issuer's Rights) are being concurrently with the execution and
delivery hereof assigned without recourse to the Trustee as security for the
Notes as provided in the Indenture.
(b) The Borrower acknowledges that each of the Trustee and the
Authority may (except with respect to Shared Rights, except that with respect
thereto rights of enforcement may be exercised by the Trustee either jointly
or severally with the Authority, and rights to consent to the modification
thereof or to waive compliance therewith may be exercised by the Trustee
jointly with the Authority but not severally, and Unassigned Issuer's
Rights), exercise any and all of their respective rights against the
Borrower pursuant to or in connection with this Agreement and the Second
Mortgage Bonds, and the Borrower shall not question the authority of any such
party to exercise such rights.
ARTICLE V
[RESERVED]
ARTICLE VI
SPECIAL COVENANTS
SECTION 6.1 NO WARRANTY OF CONDITION OR SUITABILITY BY THE AUTHORITY.
The Authority makes no warranty, either express or implied, as to the
Project, or that the Project is or will be suitable for the Borrower's or any
Subsidiary's purposes or needs.
SECTION 6.2 AUTHORITY'S RIGHT OF INSPECTION AND ACCESS. The Authority
and the Trustee and their duly authorized agents shall be permitted, at all
reasonable times and upon reasonable notice, to examine the books and records
of the Borrower with respect to the Project, the Second Mortgage Bonds and
Borrower's business generally, and any records maintained by the Authority
pertaining to the Borrower or the Project, and the Borrower shall furnish the
Authority and the Trustee with such information, statements and certificates
as may reasonably be required from time to time.
SECTION 6.3 CONDITIONS TO CONSOLIDATION OR MERGER, ETC.
(a) The Borrower covenants and agrees that it will not consolidate with
or merge into any other corporation, or sell, transfer or lease its
properties as an entirety or substantially as an entirety, unless, and the
Borrower covenants and agrees that any such consolidation, merger, sale,
transfer or lease shall be upon the conditions that,
(1) the due and punctual payment of the principal of and
interest on all the Second Mortgage Bonds according to their
tenor, and the due and punctual performance and observance of
all the terms, covenants and conditions of this Agreement to
be performed or observed by the Borrower, shall, by an
instrument in writing, be expressly assumed by the successor
corporation, if other than the Borrower, formed by or
surviving any such consolidation or merger or to which such
sale, transfer or lease shall have been made, as fully and
effectually as if such successor corporation had been an
original party to this Agreement, and
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have
occurred and be continuing.
Every such successor corporation, if other than the Borrower, upon executing
such instrument, in form reasonably satisfactory to the Authority and the
Trustee, shall succeed to and be substituted for the Borrower with the same
effect as if it had been an original party hereto, and shall possess and from
time to time may exercise each and every power of the Borrower under this
Agreement, and, in the case of any such sale or transfer, the person named as
the "Borrower" in the first paragraph of this Agreement or any successor
corporation which shall theretofore have become such in the manner prescribed
in this Section 6.3 shall be released from its liability as obligor on the
Second Mortgage Bonds. Any act or proceeding required by this Loan Agreement
to be done or performed by any board or officer of the Borrower may be done
or performed with like force and effect by the comparable board or officer of
such successor corporation.
(b) The Borrower covenants and agrees that if it shall consolidate with
or merge into any other corporation, or if it shall sell, transfer or lease
its properties as an entirety or substantially as an entirety, the Borrower
will promptly furnish to the Authority:
(1) A Certificate of an Authorized Borrower Representative
stating that the covenants of the Borrower contained in
Section 6.3(a) have been complied with;
(2) An executed counterpart of any instrument or instruments
executed by the Borrower and any successor in the performance
of such covenants; and
(3) An opinion of counsel reasonably satisfactory to the
Authority stating that in the opinion of such counsel any
instrument or instruments executed by the Borrower and its
successor in the performance of such covenants comply with the
requirements of such covenants.
SECTION 6.4 GOOD STANDING. Subject to Section 6.3 hereof, the Borrower
warrants that it is and will be during the term of this Agreement
incorporated and in good standing under the laws of the State.
SECTION 6.5 INDEMNIFICATION COVENANTS.
(a) The Borrower agrees to protect, defend and hold harmless the
Trustee and the Authority and their respective officers, members and
employees (each an "Indemnified Party") from any claim, demand, suit or
action or other proceeding whatsoever by any person or entity whatsoever,
arising or purportedly arising from or in connection with the Financing
Documents, the Indenture, the Notes, or the transactions contemplated by or
actions taken under any thereof, except for any bad faith, willful
misconduct, material misrepresentation or gross negligence on the part of the
Indemnified Party.
(b) [Reserved.]
(c) The Borrower releases each Indemnified Party from, agrees that each
Indemnified Party shall not be liable for, and agrees to hold each
Indemnified Party harmless against any damages or reasonable expenses,
including (subject to subparagraph (e) of this Section 6.5) charges of
counsel, incurred because of any investigation, review or lawsuit commenced
by any person or entity whatsoever other than the Borrower with respect to
the Financing Documents, the Indenture, the Notes or the Project, except for
any bad faith, willful misconduct, material misrepresentation or gross
negligence on the part of the Indemnified Party.
(d) All covenants, stipulations, promises, agreements and obligations
of the Authority contained herein shall be deemed to be the covenants,
stipulations, promises, agreements and obligations of the Authority and not
of any member, officer or employee of the Authority in his or her individual
capacity, and no recourse shall be had for the payment of the Loan or the
Notes or for any claim based thereon or hereunder against any member, officer
or employee of the Authority or the Trustee or any natural person executing
the Notes.
(e) In case any action shall be brought against one or more of the
Indemnified Parties based upon any of the above and in respect of which
indemnity may be sought against the Borrower, such Indemnified Party shall
notify the Borrower in writing, enclosing a copy of all papers served, but
the omission so to notify the Borrower of any such action shall not relieve
it of any liability which it may have to any Indemnified Party other than
under this Section 6.5. In case any such action shall be brought against any
Indemnified Party and it shall notify the Borrower of the commencement
thereof, the Borrower shall be entitled to participate in and, to the extent
that it shall wish, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Party, and after notice from the Borrower to
such Indemnified Party of the Borrower's election so to assume the defense
thereof the Borrower shall not be liable to such Indemnified Party for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such Indemnified Party in connection with the
defense thereof. The Indemnified Party shall have the right to employ its
own counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the employment
of counsel by such Indemnified Party has been authorized by the Borrower,
(ii) the Indemnified Party shall have reasonably concluded that there is a
conflict of interest between the Borrower and the Indemnified Party in the
conduct or the defense of such action (in which case the Borrower shall not
have the right to direct the defense of such action on behalf of the
Indemnified Party), or (iii) the Borrower shall not in fact have employed
counsel reasonably satisfactory to the Indemnified Party to assume the
defense of such action.
(f) In the event the Borrower fails to pay any amount or perform any
act under the Financing Documents, the Trustee or the Authority may, but
shall have no obligation to, pay the amount or perform the act, in which
event the costs, disbursements, expenses and charges of counsel thereof,
together with interest thereon from the date the expense is paid or incurred
at the rate of the prime rate then prevailing in the State plus two per
centum (2%), shall be an additional obligation hereunder payable on demand.
(g) The obligations of the Borrower under this section shall survive
the termination of this Agreement. This section is not for the benefit of
any person not an Indemnified Party, and no waiver of the Maine Tort Claims
Act or other applicable law is intended.
SECTION 6.6 FINANCIAL STATEMENTS OF THE BORROWER. The Borrower agrees
to furnish to the Trustee a copy of all regular and periodic reports filed
with the Securities and Exchange Commission pursuant to Section 13(a) or
15(d) of the Exchange Act.
SECTION 6.7 ENVIRONMENTAL COVENANTS. The Borrower covenants that (1)
except in compliance with applicable environmental laws, or if known or if it
becomes known to the Borrower, as disclosed pursuant to the Exchange Act, it
has not discharged, dumped, installed, stored, used, treated, transported,
disposed or maintained, and shall neither discharge, dump, install, store,
use, treat, transport, dispose or maintain toxic, hazardous, or radioactive
substances, materials or wastes, including, without limitation, all of the
following: (a) asbestos in any form; (b) urea formaldehyde foam insulation;
(c) transformers or other equipment which contain dielectric fluid containing
any level of polychlorinated biphenyls or (d) any other chemical, material or
substance which is prohibited, limited, or regulated by any federal, state,
county, regional, local, or other governmental authority or which, even if
not so regulated, to the knowledge of the Borrower poses a substantial hazard
to health and safety (all of which are referred to collectively herein as
"Hazardous Substances"), except such non-compliance as would not have a
material adverse effect on the Borrower or its financial condition, and (2)
the Borrower is not the subject of any existing, pending or threatened
investigation or inquiry by, or of any remedial order or obligation issued by
or at the behest of, any governmental authority under any law, rule or
regulation pertaining to health or the environment which would have a
material adverse effect on the Borrower or its financial condition except (i)
during any period during which the Borrower at its expense and in its name
shall be in good faith contesting its obligation to comply therewith or (ii)
as described in filings made pursuant to the Exchange Act.
SECTION 6.8 [RESERVED].
SECTION 6.9 DEFAULT AND LITIGATION NOTIFICATION. The Borrower shall
deliver to the Authority and the Trustee, within ninety (90) days after the
close of each fiscal year of Borrower, a certificate signed by an Authorized
Borrower Representative to the effect that the Borrower is in compliance with
the provisions of the Financing Documents or specifying the nature of the
noncompliance and the steps the Borrower is taking to correct any
noncompliance. Upon becoming aware of any condition or event which
constitutes, or with the giving of notice or the passage of time would
constitute, an Event of Default under this Agreement, or an Event of Default
(as defined in the Indenture) under the Indenture, the Borrower promptly
shall deliver to the Authority and the Trustee a notice stating the existence
and nature thereof and specifying the corrective steps the Borrower is taking
with respect thereto. The Borrower shall promptly notify the Authority and
Trustee of the commencement of any litigation, administrative, enforcement or
other proceeding by or against it, or the threat thereof, in which an
unfavorable outcome could materially affect the operation of the Borrower's
business or compliance with the Financing Documents.
SECTION 6.10 INSURANCE. The Borrower shall maintain an insurance
policy against liability appropriate for Borrower's business (including
environmental insurance to the extent available on reasonable terms) and
adequate workers' compensation coverage, in each case with customary
deductible and self insurance provisions selected by the Borrower.
SECTION 6.11 ADDITIONAL COVENANTS AND AGREEMENTS. The Borrower hereby
agrees to those Additional Covenants and other matters set forth in Exhibit A
hereto.
SECTION 6.12 NO LIABILITY OF THE AUTHORITY. Any obligation of the
Authority created by or arising out of this Agreement, including the Notes
and the Financing Documents, is not a general obligation of the Authority or
payable in any manner from revenues raised by taxation, but shall be payable
solely out of Pledged Revenues and the other moneys pledged under the
Indenture. In making the agreements, provisions, and covenants set forth in
the Indenture and this Agreement, the Authority has not obligated itself
except with respect to the Project and the application of the Pledged
Revenues and the other moneys pledged under the Indenture. All covenants,
stipulations, promises, agreements, and obligations of the Authority
contained herein shall be deemed to be covenants, stipulations, promises,
agreements, and obligations of the Authority and not of any member, officer,
agent, or employee thereof in his or her individual capacity. No recourse
shall be had for the payment of the principal of or of the interest on the
Notes, for the performance of any obligation hereunder, or for any claim
based thereon or hereunder against any such member, officer, agent or
employee or against any natural person executing the Notes. No such member,
officer, agent, employee, or natural person is or shall become personally
liable for any such payment, performance, or other claim, and in no event
shall any monetary or deficiency judgment be sought or secured against any
such member, officer, agent, employee, or other natural person for any such
payment, performance or other claim.
SECTION 6.13 COMPLIANCE WITH RULE 144A. If at any time the
Borrower is not subject to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 as amended, the Borrower shall make available to any
Noteholder upon request (and, upon such Noteholder's request, to the Trustee
and the Authority), the information required, at the times required, by Rule
144A to enable resales to be made pursuant to Rule 144A, which on the date
hereof is the following information (which shall be reasonably current in
relation to the date of any resale in reliance upon Rule 144A): a very brief
statement of the nature of the business of the Borrower and the products and
services it offers; and the Borrower's most recent balance sheet and profit
and loss and retained earnings statements, and similar financial statements
for such part of the two preceding fiscal years as the Borrower has been in
operation (the financial statements should be audited to the extent
reasonably available); the requirements that the information be "reasonably
current" will be presumed to be satisfied if (a) the balance sheet is as of a
date less than 16 months before the date of resale, the statements of profit
and loss and retained earnings are for the 12 months preceding the date of
such balance sheet, and if such balance sheet is not as of a date less than 6
months before the date of resale, it shall be accompanied by additional
statements of profit and loss and retained earnings for the period from the
date of such balance sheet to a date less than 6 months before the date of
resale; and (b) the statement of the nature of the Borrower's business and
its products and services offered is as of a date within 12 months prior to
the date of resale.
To enable the Trustee to deliver a notice to investors to those
Holders requesting the same under clause (b) of paragraph 2 of Section 14.01
of the Indenture, and the corresponding provision of the legend on the Notes
required by Section 14.02 of the Indenture, the Borrower shall use its best
efforts to furnish to the Trustee an appropriate form thereof upon any change
of law or practice described in Section 8.02(2)(a) of the Indenture or upon
the Trustee's request.
ARTICLE VII
MODIFICATION OF THE PROJECT; PAYMENT OF NOTES
SECTION 7.1 MODIFICATION OF THE PROJECT. The Borrower may not without
the written consent of the Authority modify the Project in any way.
SECTION 7.2 REFERENCE TO NOTES INEFFECTIVE AFTER NOTES PAID.
(a) Upon payment in full of the Notes (or provision for payment thereof
in accordance with the provisions of the Indenture) and all fees,
reimbursement payments and charges of the Trustee and the Authority provided
herein, all references in this Agreement to the Notes, the Trustee, and the
Authority shall be ineffective, and, subject to the provisions of Section 4.1
hereof, neither the Trustee, the Authority, nor any of the Noteholders, shall
thereafter have any rights hereunder, saving and excepting those that shall
have theretofore vested.
(b) For the purpose of this Agreement, the Notes shall be deemed fully
paid if:
(i) there are on deposit with the Trustee sufficient moneys to pay
all amounts due or to become due to the Authority and the Trustee
hereunder; and
(ii) all of the Outstanding Notes shall be deemed to have been
paid within the meaning of Section 9.01 of the Indenture.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 EVENTS OF DEFAULT DEFINED.
(a) The following shall be "Events of Default" under this Agreement,
and the terms "events of default" or "default" shall mean, whenever they are
used in this Agreement, any one or more of the following events:
(i) failure by the Borrower to pay, or cause to be paid, any Loan
Payments under Section 4.2 hereof, or Additional Payments specified
in Section 4.3(b) hereof, at the times specified herein;
(ii) failure by the Borrower to observe and perform any covenant,
condition or agreement on its part to be observed or performed
(other than as referred to in Section 8.1(a)(i) hereof) for a
period of thirty (30) days after written notice, specifying such
failure, requesting that it be remedied, and stating that it is a
notice of default, has been given to the Borrower by the Trustee
(except in the case of Unassigned Issuer's Rights) or by the
Authority, unless the Trustee (except in the case of Unassigned
Issuer's Rights) shall agree in writing to an extension of such
time prior to its expiration (or, in the case of Unassigned
Issuer's Rights, the Authority shall agree in writing to an
extension of such time prior to its expiration, or to a
modification or waiver of any covenant, condition or agreement in
or referred to in this Agreement constituting a part of Unassigned
Issuer's Rights); provided, however, if said failure be such that
it cannot be corrected within the applicable period, it shall not
constitute an Event of Default if corrective action is instituted
by the Borrower within the applicable period and diligently pursued
until the failure is corrected, but only, with respect to
covenants, conditions and agreements not included in Unassigned
Issuer's Rights, if such failure is corrected within ninety (90)
days after the written notice of default related thereto unless the
Trustee shall agree in writing to an extension of such time prior
to its expiration; and/or
(iii) the Borrower makes an assignment for the benefit of
creditors, files a petition in bankruptcy, is adjudicated insolvent
or bankrupt, petitions or applies to any tribunal for any receiver
of or any trustee for itself or any substantial part of its
property under any bankruptcy, insolvency, reorganization,
arrangement, or readjustment of debt law or statute or similar law
or statute of any jurisdiction, whether now or hereafter in effect;
or commences any proceeding relating to the Borrower, under any
bankruptcy, insolvency, reorganization, arrangement, or
readjustment of debt law or statute or similar law or statute of
any jurisdiction, whether now or hereafter in effect; or there is
commenced against the Borrower any such proceeding which remains
undismissed for a period of sixty (60) days; or the Borrower
indicates its consent to, approval of, or acquiescence in any such
proceeding or the appointment of any such receiver of or trustee
for the Borrower or any substantial part of its property; or the
Borrower suffers any such receivership or trusteeship to continue
undischarged or unstayed for a period of sixty (60) days; and/or
(iv) there shall occur an "Event of Default" specified in Section
7.01(a) or (b) of the Indenture; and/or
(v) there shall occur an acceleration of debt as a result of the
exercise of remedies under the Borrower Indenture or any Borrower
bank credit agreement; and/or
(vi) any representation or warranty made by the Borrower in this
Agreement, or any material representation or warranty made by the
Borrower in any instrument, other agreement, statement or
certificate furnished to the Issuer or the Trustee in connection
with this Agreement or the purchase of the Notes, proves untrue in
any material respect as of the date of the issuance or making
thereof; provided, however, if any of the facts upon which the
representations and warranties of the Borrower are based are
capable of correction or cure to conform to any such representation
or warranty, there shall be no Event of Default until passage of a
period of thirty (30) days after written notice, specifying such
failure and requesting that it be remedied, given to the Borrower
by the Trustee or the Holders of twenty-five percent (25%) in
aggregate principal amount of the Notes then Outstanding.
The declaration of an Event of Default under clause (iii) of
subsection (a) above, and the exercise of remedies upon any such declaration,
shall be subject to any applicable limitations of federal bankruptcy law
affecting or precluding that declaration or exercise during the pendency of
or immediately following any bankruptcy, liquidation or reorganization
proceedings.
(b) Paragraph (ii) of the foregoing Section 8.1(a) is subject to the
following limitations: if by reason of force majeure the Borrower is unable
in whole or in part to carry out the agreements on its part herein contained,
other than the obligations on the part of the Borrower contained in Sections
4.2, 4.3 and 6.5 hereof, the Borrower shall not be deemed in default during
the continuance of such inability. The term "force majeure" as used herein
shall mean, without limitation, the following: Acts of God; strikes,
lockouts, or other industrial disturbances; acts of public enemies; orders of
any kind of governmental authority or any of their departments, agencies or
officials, or any civil or military authority; insurrections; riots;
landslides; earthquakes; fires; storms; droughts; floods; explosions;
breakage; malfunction or accident to facilities, machinery, transmission
pipes, or canals; or any other cause or event not reasonably within the
control of the Borrower. The Borrower agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the Borrower from carrying
out this Agreement to the extent that such remedy is reasonably within the
ability of the Borrower; provided that the settlement of strikes, lockouts,
and other industrial disturbances shall be left entirely within the
discretion of the Borrower, and the Borrower shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by acceding
to the demands of the opposing party or parties.
SECTION 8.2 REMEDIES ON DEFAULT.
(a) Whenever any Event of Default referred to in Section 8.1 hereof
shall have happened and be continuing, the Authority or the Trustee may take
any one or more of the following remedial steps (except that the Trustee
shall have no right to enforce Unassigned Issuer's Rights):
(i) The Authority or the Trustee as provided in the Indenture may
declare an amount equal to the unpaid principal amount of the
Project Note Portion of the Notes and the interest accrued thereon
to the date of such declaration to be immediately due and payable,
whereupon the same shall become immediately due and payable, and
which amount the Borrower hereby agrees to pay or cause to be paid;
and/or
(ii) The Authority or the Trustee may declare an amount equal to
the unpaid principal amount of the Loan and the interest accrued
thereon to the date of such declaration to be immediately due and
payable, whereupon the same shall become immediately due and
payable, and which amount the Borrower hereby agrees to pay or
cause to be paid; and/or
(iii) The Authority or the Trustee may take whatever action at
law or in equity may appear necessary or desirable to collect the
payments and other amounts then due and thereafter to become due or
to enforce performance and observance of any obligation, agreement,
or covenant of the Borrower under this Agreement.
(b) Any amounts collected pursuant to action taken under this Section
shall be paid into the Note Fund or the Capital Reserve Fund, as required by
the Indenture, and applied in accordance with the provisions of the Indenture
or, if all of the Notes and other amounts due hereunder have been fully paid
(or provision for payment thereof has been made in accordance with the
provisions of the Indenture), to the Borrower (except, with respect to the
last $21,191,940 of principal of and interest on the Notes Outstanding, to
the Authority).
(c) Except to the extent of any such collection, no action taken
pursuant to this Section shall relieve the Borrower from such of the
Borrower's obligations pursuant to Sections 4.2, 4.3 and 6.5 hereof which
shall survive any such action, and the Authority or the Trustee may take
whatever action at law or in equity as may appear necessary and desirable to
collect all amounts then due and thereafter to become due and/or to enforce
the performance and observance of any obligation, agreement or covenant of
the Borrower hereunder (except that the Trustee shall have no right to
enforce Unassigned Issuer's Rights).
SECTION 8.3 NO REMEDY EXCLUSIVE; TRUSTEE AND NOTEHOLDERS DEEMED THIRD
PARTY BENEFICIARIES. No remedy herein conferred upon or reserved to the
Authority is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise
any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may be expedient.
In order to entitle the Issuer or the Trustee to exercise any remedy reserved
to it in this Article, it shall not be necessary to give any notice, other
than such notice as may be herein expressly required. Subject to any
applicable restriction on enforcement contained in the Indenture, such rights
and remedies as are given the Authority hereunder shall also extend to the
Trustee, and the Trustee and the Noteholders shall be deemed third party
beneficiaries of all covenants and agreements herein contained, whether
described as rights of the Trustee or Holders or as rights of the Authority,
except in the case of the Noteholders as to the rights of the Trustee or any
Authenticating Agent or Paying Agent for its own account, and except in each
and every such case Unassigned Issuer's Rights.
SECTION 8.4 NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the event
any agreement contained in this Agreement should be breached by either party
and thereafter waived by the other party or the Trustee, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive
any other breach hereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES.
(a) All notices, certificates, or other communications hereunder shall
be sufficiently given and shall be deemed given when (i) mailed by first
class mail or by overnight courier, (ii) faxed and immediately confirmed by
first class mail, or (iii) delivered, postage prepaid, or by overnight
courier addressed as follows:
(i) IF TO THE AUTHORITY:
If by registered or certified mail, to:
Finance Authority of Maine
Post Office Box 949
Augusta, ME 04332-0949
(Attention: Chief Executive Officer)
Telephone Number: (207) 623-3263
Fax Number: (207) 623-0095
and
If by overnight courier, to:
Finance Authority of Maine
83 Western Avenue
Augusta, ME 04330-7226
(Attention: Chief Executive Officer)
Telephone Number: (207) 623-3263
Fax Number: (207) 623-0095
(ii) IF TO THE BORROWER, TO:
Bangor Hydro-Electric Company
33 State Street
P.O. Box 932
Bangor, ME 04402-0932
(Attention: Treasurer)
Telephone Number: (207) 945-5621
Fax Number: (207) 990-6954
(iii) IF TO THE TRUSTEE, TO:
First Fidelity Bank
10 State House Square
Corporate Trust - CB 5845
Hartford, CT 06103-3698
Telephone Number: (203) 247-1353
Fax Number: (203) 247-1356
Wire Transfer Instructions:
ABA #031201467
FIRST FIDELITY
A/C #0666249910
For Further Credit to:
FAME BANGOR HYDRO NOTE FD
(b) Duplicate copies of each notice, certificate, or other
communication given hereunder by the Authority, the Trustee or the Borrower
to any of the others, shall also be given to all of the others, except that
in the case of notices relating solely to Unassigned Issuer's Rights, no
notice need be sent to the Trustee.
(c) The Authority, the Borrower and the Trustee may, by notice given to
all parties hereto or to the Indenture, designate any further or different
addresses to which subsequent notices, certificates, or other communications
shall be sent.
SECTION 9.2 FILING.
(a) Financing statements shall be filed with respect to the pledge of
the Trust Estate effected by the Indenture.
(b) The parties agree that all necessary continuation statements shall
be filed by the Trustee, at the expense of the Borrower, within the time
prescribed by the Uniform Commercial Code - Secured Transactions of the
State.
SECTION 9.3 BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding upon the Authority, its successors and assigns, the
Borrower, and the permitted successors and assigns of the Borrower.
SECTION 9.4 SEVERABILITY. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
SECTION 9.5 AMOUNTS REMAINING IN THE NOTE FUND. It is agreed by the
parties hereto that any amounts remaining in the Note Fund after payment in
full of the Notes (or provision for payment thereof having been made in
accordance with the provisions of the Indenture), all other amounts due
hereunder and the fees, charges, and expenses of the Trustee and the Paying
Agents in accordance with the Indenture, shall belong to and be paid to the
Authority by the Trustee as overpayments.
SECTION 9.6 AMENDMENTS, CHANGES AND MODIFICATIONS.
(a) This Agreement may not be amended, changed, modified, altered, or
terminated without in each instance the prior written consent of both parties
hereto and (except in the case of Unassigned Issuer's Rights) the Trustee.
(b) No obligation is imposed on the Authority by this Section 9.6 to
enter into any amendment, and no amendment is permitted hereunder which would
result in the breach of the Authority's agreements in the Indenture.
SECTION 9.7 EXECUTION OF COUNTERPARTS. This agreement may be executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
SECTION 9.8 LAW GOVERNING CONSTRUCTION OF AGREEMENT. This Agreement
shall be deemed to be a contract made under the laws of the State and for all
purposes shall be governed by and construed in accordance with the laws of
the State applicable to contracts made and to be performed entirely within
the State.
SECTION 9.9 ASSIGNMENT OF AGREEMENT OR SECOND MORTGAGE BONDS. Except
as specifically permitted herein, the Borrower may not assign its rights,
interests or obligations hereunder or under the Second Mortgage Bonds or
other Financing Documents without the express prior written approval of the
Authority and the Trustee.
SECTION 9.10 FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. The
Authority and the Borrower agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for correcting any inadequate or incorrect description of the
Project or for carrying out the intention of or facilitating the performance
of this Agreement and the Financing Documents.
SECTION 9.11 PAYMENTS DUE ON NON-BUSINESS DAYS. If any payment of
moneys hereunder is due on a date other than a Business Day (the "due date"),
that payment need not be made on the due date, but may be made on the next
succeeding Business Day with the same force and effect as if that payment
were made on the due date, and in such case no interest shall accrue for the
period from such due date.
IN WITNESS WHEREOF, the FINANCE AUTHORITY OF MAINE has executed this
Agreement by causing these presents to be signed in its name and behalf by
its Chief Executive Officer and BANGOR HYDRO-ELECTRIC COMPANY has executed
this Agreement by causing these presents to be signed in its name and behalf
by its duly authorized officer, and the same to be attested by its Secretary,
all being done as of the day and year first hereinabove written.
FINANCE AUTHORITY OF MAINE
[SEAL] By /s/ Timothy P. Agnew
------------------------
Timothy P. Agnew
Chief Executive Officer
BANGOR HYDRO-ELECTRIC COMPANY
[SEAL] By /s/ Robert S. Briggs
--------------------------
Robert S. Briggs
President
Attest:
/s/ Frederick S. Samp
-----------------------
Frederick S. Samp
Clerk
EXHIBIT A
ADDITIONAL COVENANTS OF BORROWER
1. Commencing with Fiscal Year 1996, the Borrower is prohibited from making
common stock dividends and/or distributions in any fiscal year in excess
of 70% of earnings applicable to common stock. The Borrower may, at its
discretion, place additional restrictions on dividends and
distributions. Any waiver of the prohibition must be approved in
writing by the Chief Executive Officer of the Authority.
2. The Borrower must furnish a signed copy of a Commitment Letter from the
Chemical Bank Group ("Chemical") in form and substance satisfactory to
the Authority. The loan(s) from Chemical must close prior to or
contemporaneously with the Loan.
3. The Borrower shall not redeem any stock except pursuant to existing
mandatory redemption provisions. The foregoing will not prevent the
Borrower from purchasing stock on the open market pursuant to any
existing dividend reinvestment plan.
4. The Borrower must promptly notify the Authority of the occurrence of any
of the following: (a) the institution of, or any development or
determination in, any litigation, arbitration proceeding or governmental
proceeding which is adverse to the Borrower or any Subsidiary and which
is material to the Borrower and its Subsidiaries as a whole, (b) the
occurrence of a Reportable Event a 30-day notice of which must be filed
with the Pension Benefit Guaranty Corporation ("PBGC") pursuant to PBGC
Regulation Section 2615.3 under, or the institution of steps by the
Borrower or any Significant Subsidiary to withdraw from, or the
institution of any steps to terminate, any employee benefit plan
maintained by the Borrower or any Significant Subsidiary, or (c) any
Subsidiary becoming, or ceasing to be, a Significant Subsidiary. For
purposes of subsection (a) above, "material" includes, but is not
limited to any claim or action with a demand of $5,000,000 or greater.
Such notice must be in writing and must describe the matter and the
steps being taken by the Borrower or the Subsidiary affected with
respect thereto.
5. The Borrower must provide the Authority with copies of each filing and
report made by the Borrower or any Subsidiary with or to the Securities
and Exchange Commission (other than registration statements that have
not become effective under the Securities Act of 1933, filings and
reports with respect to dividend reinvestment, employee benefits, or
other similar plans, and filings and reports pertaining to sales of or
other transactions in securities of the Borrower or any Subsidiary by
persons other than the Borrower or such Subsidiary), and of each
communication from the Borrower or any Subsidiary to public
shareholders generally, promptly upon the filing or making thereof. The
Borrower must meet periodically with the Authority at the Authority's
request to provide information on financial conditions (whether or not
included in such filings) and any other issue raised by the Authority.
6. The Borrower must furnish the Authority with such information and
statements pertaining to the business or the financial condition of the
Borrower as may be reasonably required from time to time.
7. The Borrower must furnish the Authority, prior to the original issuance
of the Notes, signed copies of agreements it has negotiated with Babcock
- Ultrapower West Enfield and Babcock - Ultrapower Jonesboro.
8. The Borrower must furnish, prior to the original issuance of the Notes,
the final signed order of the Maine Public Utilities Commission.
9. The Borrower will observe and comply in all material respects with all
laws, regulations, ordinances, rules, and orders (including without
limitation those relating to zoning, land use, environmental protection,
air, water and land pollution, wetlands, health, equal opportunity,
minimum wages, worker's compensation and employment practices) of any
federal, state, municipal or other governmental authority except during
any period during which the Borrower at its expense and in its name
shall be in good faith contesting its obligations to comply therewith.
10. The Borrower acknowledges that its Certificate of Organization
("Certificate") and By-laws are its only corporate governance documents.
The Borrower must comply with all conditions of its Certificate. The
Borrower shall make no changes to its Certificate without providing
prior notification to the Authority.
11. The Borrower must provide to the Authority its Regulatory Update when
each is distributed or any successor internal publication and such other
information regarding pending or anticipated filings as the Authority
may reasonably request.
12. The Borrower may not create, incur, assume or permit to exist any
mortgage, lien, charge, security interest or other encumbrance on any
property or asset of the Borrower, except the Borrower Indenture,
Permitted Liens and Prior Liens, each as defined in the Borrower
Indenture.
13. The Borrower must apply Loan proceeds only in accordance with the "Use
of Proceeds" on page 1 of the Commitment dated June 22, 1995 from the
Authority to the Borrower.
14. The Borrower is to promptly notify the Authority of any material adverse
change in its business operations or financial condition occurring
either before or after the closing of the Loan.
15. Enforcement actions of the Authority may include but shall not be
limited to any action the Authority may deem necessary or desirable
before the Maine Public Utilities Commission, or any other
administrative body, to reasonably assure payment of the Loan and
compliance with the Financing Documents.
16. The Borrower must pay all costs and expenses incurred by the Authority
in connection with the issuance of the Notes and servicing of the Loan
and Notes. This will include costs and expenses of employees of the
Authority including in-house counsel in processing servicing requests
during the term of the Loan.
17. The Borrower agrees, unless it is legally precluded, that it will file
for appropriate rate relief from the Maine Public Utilities Commission
in the event it is unable to make any payments or perform any financial
obligation under the Loan Agreement.
18. The Borrower agrees that it will give to the Authority prompt notice of
any material default under its 1936 Indenture (as defined in the
Borrower Indenture) or any other credit agreement with any financing
institution while any portion of the Loan remains outstanding.
19. The Borrower hereby waives any objection to the Authority's standing in
any matter in which the Borrower or any subsidiary may be a party before
the Maine Public Utilities Commission.
20. The Borrower must not incur any additional debt in excess of
$15,000,000. Current and future borrowings on the revolving credit
facility with Chemical closing concurrently with this Loan do not
constitute new debt.
21. The Borrower may not incur additional debt in excess of $15,000,000
unless (a) such debt is refunding debt, which does not increase the
Borrower's aggregate level of debt or (b) the issuance of such debt does
not reduce the Debt Service Coverage (as defined below) below the lesser
of (i) the debt service coverage prior to the issuance of new debt or
(ii) 1.3x or (c) the Chief Executive Officer of the Authority provides
written consent.
For the purpose of this covenant, Debt Service Coverage means: earnings
before income taxes + interest for the previous 12 months + depreciation
for the previous 12 months + amortization for the previous 12 months
(less or plus extraordinary [see footnote at end of Exhibit A] income or
losses) divided by: interest for the previous 12 months + principal
payments for the previous 12 months + the projected 12 months of principal
and interest for the proposed new debt.
22. All first mortgage bonds of the Borrower pledged to secure the loans
made by Chemical which are released from the security interest of
Chemical will be assigned by Chemical to the Trustee of the Borrower
Indenture for the benefit of the holders of the bonds issued thereunder.
23. If there shall be a conflict between the terms of the Loan Agreement and
the Borrower Indenture, the terms of the Loan Agreement shall control.
Footnote:
Extraordinary is defined as a nonrecurring occurrence that must be explained
by note on the financial statements or in a filing. Earnings are adjusted by
adding or subtracting the extraordinary occurrence.
EXHIBIT C
LOAN PRINCIPAL
LIQUIDATION TOTAL NOTE
NOTE PRINCIPAL LOAN OF CAPITAL PRINCIPAL
PAYMENT DATE PRINCIPAL RESERVE FUND REPAYMENTS
7/1/98 $ 12,300,000 $ 0 $ 12,300,000
7/1/99 13,100,000 0 13,100,000
7/1/00 14,000,000 0 14,000,000
7/1/01 15,100,000 0 15,100,000
7/1/02 16,100,000 0 16,100,000
7/1/03 17,200,000 0 17,200,000
7/1/04 17,008,060 1,391,940 18,400,000
7/1/05 0 19,800,000 19,800,000
Total $104,808,060 $126,000,000
EXECUTION COPY
CREDIT AGREEMENT
Dated as of
June 30, 1995
among
Bangor Hydro-Electric Company,
The Banks Named Herein,
Chemical Bank,
as Administrative Agent,
and
Fleet Bank of Maine and The First National Bank of Boston,
as Co-Agents
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . 1
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . 14
ARTICLE II
THE COMMITMENTS . . . . . . . . . . . . . . 14
SECTION 2.1 REVOLVING CREDIT LOANS . . . . . . . . . . . . . . . . . 14
SECTION 2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING . . . . . . . . 15
SECTION 2.3 REVOLVING CREDIT NOTES . . . . . . . . . . . . . . . . . 15
SECTION 2.4 SWING LINE COMMITMENT. . . . . . . . . . . . . . . . . . 16
SECTION 2.5 COMMITMENT FEE . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.6 OPTIONAL TERMINATION OR REDUCTION OF REVOLVING CREDIT
COMMITMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.7 TERM LOANS.. . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.8 TERM NOTES . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.9 PROCEDURE FOR TERM LOAN BORROWING. . . . . . . . . . . . 19
SECTION 2.10 OPTIONAL PREPAYMENTS. . . . . . . . . . . . . . . . . . 19
SECTION 2.11 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS . . . . 20
SECTION 2.12 COMPUTATION OF INTEREST AND FEES. . . . . . . . . . . . 21
SECTION 2.13 INTEREST RATE AND PAYMENT DATES . . . . . . . . . . . . 21
SECTION 2.14 CONVERSION OPTIONS. . . . . . . . . . . . . . . . . . . 21
SECTION 2.15 INABILITY TO DETERMINE INTEREST RATE. . . . . . . . . . 22
SECTION 2.16 PRO RATA TREATMENT AND PAYMENTS.. . . . . . . . . . . . 23
SECTION 2.17 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.18 REQUIREMENTS OF LAW.. . . . . . . . . . . . . . . . . . 24
SECTION 2.19 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE III
LETTERS OF CREDIT. . . . . . . . . . . . . . 26
SECTION 3.1 L/C COMMITMENT.. . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. . . . . . . 26
SECTION 3.3 COMMISSIONS AND OTHER CHARGES. . . . . . . . . . . . . . 27
SECTION 3.4 L/C PARTICIPATIONS.. . . . . . . . . . . . . . . . . . . 27
SECTION 3.5 REIMBURSEMENT OBLIGATION OF THE COMPANY. . . . . . . . . 28
SECTION 3.6 OBLIGATIONS ABSOLUTE.. . . . . . . . . . . . . . . . . . 29
SECTION 3.7 LETTER OF CREDIT PAYMENTS. . . . . . . . . . . . . . . . 29
SECTION 3.8 APPLICATION. . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IV
CONDITIONS TO EXTENSIONS OF CREDIT. . . . . . . . . . 30
SECTION 4.1 EACH EXTENSION OF CREDIT . . . . . . . . . . . . . . . . 30
SECTION 4.2 FIRST LOAN . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.3 SPECIFIED LETTER OF CREDIT . . . . . . . . . . . . . . . 32
ARTICLE V
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 32
SECTION 5.1 CORPORATE EXISTENCE AND POWER. . . . . . . . . . . . . . 32
SECTION 5.2 CORPORATE AUTHORIZATION; NON-CONTRAVENTION. . . . . . . 33
SECTION 5.3 BINDING EFFECT . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.4 FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . 33
SECTION 5.5 LEGAL AND REGULATORY PROCEEDINGS . . . . . . . . . . . . 33
SECTION 5.6 GOVERNMENTAL AUTHORIZATION . . . . . . . . . . . . . . . 33
SECTION 5.7 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.8 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.9 COMPLIANCE WITH ERISA. . . . . . . . . . . . . . . . . . 34
SECTION 5.10 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.11 PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.12 NO DEFAULTS, VIOLATIONS, ETC. . . . . . . . . . . . . . 35
SECTION 5.13 RESTRICTIONS ON COMPANY . . . . . . . . . . . . . . . . 35
SECTION 5.14 PUBLIC UTILITY HOLDING COMPANY ACT. . . . . . . . . . . 35
ARTICLE VI
COVENANTS. . . . . . . . . . . . . . . . 35
SECTION 6.1 INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.2 PAYMENT OF TAXES; PRESERVATION OF CORPORATE EXISTENCE
AND FRANCHISES; MAINTENANCE OF PROPERTIES; COMPLIANCE WITH
LAWS; MAINTENANCE OF INSURANCE . . . . . . . . . . . . . . . . . 37
SECTION 6.3 LIMITATION ON DEBT . . . . . . . . . . . . . . . . . . . 38
SECTION 6.4 INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.5 NEGATIVE PLEDGE. . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.6 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. . . . . . . 41
SECTION 6.7 CONSOLIDATED TOTAL DEBT RATIO. . . . . . . . . . . . . . 41
SECTION 6.8 CONSOLIDATED FIXED CHARGE RATIO. . . . . . . . . . . . . 41
SECTION 6.9 MAINTENANCE OF NET WORTH . . . . . . . . . . . . . . . . 42
SECTION 6.10 LIMITATION ON DIVIDENDS, ETC. . . . . . . . . . . . . . 42
SECTION 6.11 STATUS. . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.12 AMENDMENTS TO SECOND MORTGAGE BONDS, ETC. . . . . . . . 42
SECTION 6.13 INTEREST RATE PROTECTION. . . . . . . . . . . . . . . . 43
SECTION 6.14 LIMITATION ON OPTIONAL PREPAYMENTS OF CERTAIN DEBT. . . 43
SECTION 6.15 RIGHTS OF INSPECTION. . . . . . . . . . . . . . . . . . 43
SECTION 6.16 MATTERS OF ENVIRONMENTAL CONCERN. . . . . . . . . . . . 43
ARTICLE VII
DEFAULTS . . . . . . . . . . . . . . . . 44
SECTION 7.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . 44
SECTION 7.2 NOTICE OF EVENT OF DEFAULT . . . . . . . . . . . . . . . 46
ARTICLE VIII
THE ADMINISTRATIVE AGENT . . . . . . . . . . . . 46
SECTION 8.1 APPOINTMENT. . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.2 DELEGATION OF DUTIES . . . . . . . . . . . . . . . . . . 47
SECTION 8.3 EXCULPATORY PROVISIONS . . . . . . . . . . . . . . . . . 47
SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT . . . . . . . . . . . . 47
SECTION 8.5 NOTICE OF EVENT OF DEFAULT . . . . . . . . . . . . . . . 48
SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS . . 48
SECTION 8.7 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. . . . . 49
SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT . . . . . . . . . . . . . 49
SECTION 8.10 CO-AGENTS . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX
MISCELLANEOUS. . . . . . . . . . . . . . . 50
SECTION 9.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 9.2 NO WAIVERS; CUMULATIVE REMEDIES. . . . . . . . . . . . . 50
SECTION 9.3 EXPENSES; DOCUMENTARY TAXES. . . . . . . . . . . . . . . 50
SECTION 9.4 ADJUSTMENTS. . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.5 AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . 51
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
BANKS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE X. . . . . . . . . . . . . . . . 54
SECTION 10.1 COUNTERPARTS; EFFECTIVENESS . . . . . . . . . . . . . . 55
ARTICLE XI. . . . . . . . . . . . . . . . 55
SECTION 11.1 SECTION HEADINGS. . . . . . . . . . . . . . . . . . . . 55
ARTICLE XII . . . . . . . . . . . . . . . 55
SECTION 12.1 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE XIII . . . . . . . . . . . . . . . 55
SECTION 13.1 SUBMISSION TO JURISDICTION; WAIVERS . . . . . . . . . . 55
SCHEDULE I Commitment Schedule
SCHEDULE II Address Schedule
EXHIBIT A-1 Form of Revolving Credit Note
EXHIBIT A-2 Form of Swing Line Note
EXHIBIT B Form of Term Note
EXHIBIT C Closing Certificate
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E-1 Opinion to be Delivered by General Counsel
of Company
EXHIBIT E-2 Opinion of Winthrop, Stimson
EXHIBIT E-3 Opinion of Eaton, Peabody
EXHIBIT F Form of Pledge Agreement
EXHIBIT G List of Subsidiaries of Company
EXHIBIT H List of Guarantees
EXHIBIT I 1994 Audited Financial Statement of the Company
(from the Company's 1994 Annual Report on
Form 10-K)
CREDIT AGREEMENT dated as of June 30, 1995 among Bangor
Hydro-Electric Company, a Maine corporation (the "COMPANY"), the several
banks from time to time parties to this Agreement (individually, a "BANK" and
collectively, the "BANKS"), Chemical Bank, as administrative agent for the
Banks, and Fleet Bank of Maine and The First National Bank of Boston, as co-
agents (in such capacity, the "CO-AGENTS").
The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 (A) DEFINITIONS. The following
terms, as used herein, have the following meanings:
"ADMINISTRATIVE AGENT": Chemical Bank, together with its
affiliates, as the arranger of the Commitments and as the agent for the
Banks under this Agreement and the other Loan Documents.
"AGGREGATE OUTSTANDING REVOLVING EXTENSIONS OF CREDIT": as to
any Revolving Credit Bank at any time, an amount equal to the sum of (a)
the aggregate principal amount of all Revolving Credit Loans made by
such Bank then outstanding, (b) such Bank's Revolving Credit Commitment
Percentage of the L/C Obligations then outstanding, and (c) such Bank's
Revolving Credit Commitment Percentage of the aggregate principal amount
of all Swing Line Loans then outstanding.
"AGREEMENT": this Credit Agreement, as amended, supplemented
or modified from time to time.
"APPLICABLE BASE RATE MARGIN": with respect to each Base Rate
Loan at any date, the applicable percentage per annum set forth below
based upon the Status on such date:
Level I Level II Level III Level IV Level V
Status Status Status Status Status
------- -------- --------- -------- -------
0.00% 0.25% 0.75% 1.00% 1.50%
"APPLICABLE EURODOLLAR MARGIN": with respect to each
Eurodollar Loan at any date, the applicable percentage per annum set
forth below based upon the Status on such date:
Level I Level II Level III Level IV Level V
Status Status Status Status Status
------- -------- --------- -------- -------
0.75% 1.25% 1.75% 2.00% 2.50%
"APPLICATION": an application, in such form as the Issuing
Bank may specify from time to time, requesting the Issuing Bank to open
a Letter of Credit.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT": an Assignment and
Acceptance Agreement, substantially in the form of Exhibit D.
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Revolving
Credit Bank, at a particular time, an amount equal to the excess, if
any, of (a) the amount of such Bank's Revolving Credit Commitment at
such time over (b) such Bank's Aggregate Outstanding Revolving
Extensions of Credit at such time; PROVIDED, that in calculating any
Bank's Aggregate Outstanding Revolving Extensions of Credit for the
purpose of determining such Bank's Available Revolving Credit Commitment
pursuant to Section 2.5, the aggregate unpaid principal amount of Swing
Line Loans then outstanding shall be deemed to be zero.
"BASE RATE": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "PRIME RATE" shall mean the
rate of interest per annum publicly announced from time to time by
Chemical Bank as its prime rate in effect at its principal office in New
York City (the Prime Rate not being intended to be the lowest rate of
interest charged by Chemical Bank in connection with extensions of
credit to debtors); "BASE CD RATE" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the
CD Reserve Percentage and (b) the CD Assessment Rate; "THREE-MONTH
SECONDARY CD RATE" shall mean, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on
such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal
Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in
New York City received at approximately 10:00 A.M., New York City time,
on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing
selected by it; "CD ASSESSMENT RATE" shall mean, for any day, the annual
assessment rate in effect on such day which is payable by a member of
the Bank Insurance Fund maintained by the FDIC classified as
well-capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.3(d) (or any successor provision) to the FDIC for the
FDIC's insuring time deposits at offices of such institution in the
United States; "CD RESERVE PERCENTAGE" shall mean, for any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board)
in respect of new non-personal time deposits in Dollars having a
maturity of 30 days or more; and "FEDERAL FUNDS EFFECTIVE RATE" shall
mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day which is a Business Day, the average of
the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Base CD Rate or the
Federal Funds Effective Rate, or both, for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Base Rate shall be
determined without regard to clause (b) or (c), or both, of the first
sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD
Rate, the CD Reserve Percentage, the CD Assessment Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate, the CD Reserve Percentage, the CD Assessment Rate or
the Federal Funds Effective Rate, respectively.
"BASE RATE LOANS": loans hereunder at such time as they are
being made and/or being maintained at a rate of interest based upon the
Base Rate (including Swing Line Loans).
"BOARD": the Board of Governors of the Federal Reserve System
(or any successor).
"BORROWING DATE": any Business Day specified in a notice
pursuant to Section 2.2, 2.4 or 2.9 as a date on which the Company
requests the relevant Banks to make Revolving Credit Loans, Swing Line
Loans or Term Loans, as the case may be, hereunder.
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"CAPITAL STOCK": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a
Person (other than a corporation), and any and all warrants or options
to purchase any of the foregoing.
"CASH": with respect to the Company, the sum of (i) cash on
hand and all money in demand deposit or similar accounts; and (ii)
Temporary Cash Investments.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL BONDS": as defined in Section 4.2(b).
"COMMISSION": the Public Utilities Commission of the State of
Maine.
"Commitment": as to each Bank, the sum of the Term Loan
Commitment and the Revolving Credit Commitment of such Bank.
"COMMITMENT FEE RATE": for any day, the rate per annum set
forth below opposite the Status in effect on such day:
Commitment Fee
Status Rate
---------------- --------------
Level I Status 0.250%
Level II Status 0.375%
Level III Status 0.500%
Level IV Status 0.500%
Level V Status 0.625%
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 414(b) or (c) of the Code.
"COMPANY'S 1994 FORM 10-K": the Company's annual report on Form
10-K for 1994, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
"COMPANY'S FORM 10-Q": the Company's quarterly reports on Form
10-Q, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended.
"CONSOLIDATED ADJUSTED EBIT": for any period, Consolidated Net
Income for such period (a) PLUS, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income
for such period, the sum of (i) total income tax expense and (ii)
interest expense, amortization or writeoff of debt discount and debt
issuance costs and commissions, discounts and other fees and charges
associated with Debt (including the Loans) and (b) MINUS, to the extent
included in Consolidated Net Income for such period, the amount which
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": for any period, (a) total cash
interest expense (including that attributable to capital lease
obligations) of the Company and its Subsidiaries for such period with
respect to all outstanding Debt of the Company and its Subsidiaries,
including, without limitation, all commissions, discounts and other fees
and charges owed with respect 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 which would appear in
accordance with GAAP on a statement of income of the Company and its
consolidated Subsidiaries for such period opposite the heading
"Allowance for borrowed funds used during construction" (or any similar
item).
"CONSOLIDATED FIXED CHARGE RATIO": for any period, the ratio of
(a) Consolidated Adjusted EBIT for such period to (b) Consolidated Fixed
Charges for such period.
"CONSOLIDATED NET INCOME": for any period, the net income (or
loss) of the Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; PROVIDED that there shall be excluded (a)
the income (or deficit) 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 deficit) 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 is actually received by the Company or such Subsidiary in
the form of dividends or similar 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": at any date of determination, with
respect to any Person, (a) the stated capital of the common stock of
such Person PLUS (b) additional paid-in capital in respect of such
common stock PLUS (c) retained earnings (or minus accumulated deficit)
of such Person, determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION": at any date of determination,
the sum of (a) Consolidated Total Debt at such date and (b) the
aggregate of all amounts which would appear in accordance with GAAP on a
balance sheet of the Company and its consolidated Subsidiaries at such
date opposite the headings "Common stock investment," "Preferred stock"
and "Preferred stock subject to mandatory redemption" (or any similar
items).
"CONSOLIDATED TOTAL DEBT": at any date of determination, the
aggregate principal amount of all Debt which would appear in accordance
with GAAP on a balance sheet of the Company and its consolidated
Subsidiaries at such date.
"CONSOLIDATED TOTAL DEBT RATIO": at any date of determination, the
ratio of (a) Consolidated Total Debt at such date to (b) Consolidated
Total Capitalization at such date.
"DEBT": at any date, as to any Person, (a) all indebtedness or
other obligations of such Person for borrowed money, for letters of
credit opened for the account of such Person, or for the deferred
purchase price of property or services, or with respect to obligations
pursuant to capitalized leases, (b) all indebtedness or other
obligations of any other Person for borrowed money or for the deferred
purchase price of property or services, the payment or collection of
which such Person has guaranteed (except by reason of endorsement for
collection and endorsements in the ordinary course of business) or in
respect of which such Person is liable, contingently or otherwise,
including, without limitation, liability by way of agreement to
purchase, to provide funds for payment, to supply funds to or otherwise
to invest in such other Person, or otherwise to assure a creditor
against loss, and (c) all indebtedness or other obligations of any other
Person for borrowed money or for the deferred purchase price of property
or services secured by (or for which the holder of such indebtedness has
an existing right, contingent or otherwise, to be secured by) any
mortgage, deed of trust, pledge, lien, security interest or other charge
or encumbrance upon or in property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such indebtedness
or obligations. It is understood that Interest Rate Protection
Agreements and commodities hedge agreements shall not constitute Debt
for the purposes of this Agreement.
"DEFAULT": any of the events specified in Section 7.1, whether or
not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DISCLOSURE DOCUMENTS": as defined in Section 5.4(a).
"DOLLARS" and "$": dollars in lawful currency of the United States
of America.
"DOMESTIC LENDING OFFICE": initially, the office of each Bank
designated as such in Schedule II hereto; thereafter, such other office
of such Bank, if any, located within the United States which shall be
making or maintaining Base Rate Loans.
"EFFECTIVE DATE": June 30, 1995.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended.
"EURODOLLAR LENDING OFFICE": initially, the office of each Bank
designated as such in Schedule II hereto; thereafter, such other office
of such Bank, if any, which shall be making or maintaining Eurodollar
Loans.
"EURODOLLAR LOANS": loans hereunder at such time as they are made
and/or being maintained at a rate of interest based on the LIBO Rate.
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
made by the Revolving Credit Banks or the Term Loan Banks, as the case
may be, the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"EVENT OF DEFAULT": as defined in Section 7.1.
"EXCHANGE ACT": the Securities Exchange Act of 1934, as amended,
including the regulations promulgated thereunder, from time to time.
"EXISTING CREDIT AGREEMENT": as defined in Section 4.2(d).
"FAME LOAN AGREEMENT": the Loan Agreement dated as of June 1,
1995 between the Company and the Finance Authority of Maine.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time; provided, that all
computations determining compliance with Section 6, including
definitions used therein, shall utilize generally accepted accounting
principles in effect at the time of the preparation of, and in
conformity with those used to prepare, the financial statements of the
Company in respect of the fiscal year ended December 31, 1994 delivered
pursuant to Section 5.4(a).
"GENERAL AND REFUNDING MORTGAGE INDENTURE": The General and
Refunding Mortgage Indenture and Deed of Trust dated as of June 1, 1995
between the Company and Chemical Bank, as trustee.
"GUARANTEE": as to any Person, any obligations, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt
or lease payments of any other Person or otherwise in any manner
assuring the holder of any Debt or lease of any other Person against
loss (whether by agreement to keep-well, to purchase assets, goods or
services, or to take-or-pay or otherwise). The term "guarantee" used as
a verb has a correlative meaning.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the last
day of each March, June, September and December, commencing on the first
of such days to occur after a Base Rate Loan is made or Eurodollar Loans
are converted to Base Rate Loans, (b) as to any Eurodollar Loan, in
respect of which the Company has selected an Interest Period of one, two
or three months, the last day of such Interest Period and (c) as to any
Eurodollar Loan in respect of which the Company has selected a longer
Interest Period than the periods described in clause (b), each day which
is three months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period.
"INTEREST PERIOD": (a) initially, the period commencing on the
Borrowing Date or the conversion date, as the case may be, with respect
to each Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Company in its notice of borrowing as
provided in Section 2.2 or 2.9 or its notice of conversion as provided
in Section 2.14; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to each Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Company by
irrevocable notice to the Administrative Agent not less than three
Working Days prior to the last day of the then current Interest Period
with respect to such Eurodollar Loan;
PROVIDED THAT, the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day which is not a Working Day, that Interest Period
shall be extended to the next succeeding Working Day unless the result
of such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Working Day;
(B) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date;
(C) if the Company shall fail to give notice as provided above,
the Company shall be deemed to have selected a Base Rate Loan to replace
the affected Eurodollar Loan;
(D) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Working Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Working Day of a
calendar month; and
(E) the Company shall select Interest Periods so as not to require
a payment or prepayment of any Eurodollar Loan during an Interest Period
for such Loan.
"INTEREST RATE PROTECTION AGREEMENT": any interest rate protection
agreement, interest rate swap, interest rate cap or other interest rate
hedge arrangement.
"INVESTMENT": any investment in any Person, whether by means of
share purchase, loan, capital contribution or otherwise.
"ISSUING BANK": Chemical Bank, in its capacity as issuer of any
Letter of Credit.
"L/C COMMITMENT": $5,000,000.
"L/C FEE PAYMENT DATE": the last day of each March, June,
September and December.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters
of Credit which have not then been reimbursed pursuant to Section
3.5(a).
"L/C PARTICIPANTS": the collective reference to all Revolving
Credit Banks other than the Issuing Bank.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LEVEL I STATUS": exists at any date if, at such date, the Company
has a long-term senior secured debt rating (whether or not published) of
BBB or better by S&P AND, unless the Company is then unrated by Moody's,
Baa2 or better by Moody's.
"LEVEL II STATUS": exists at any date if, at such date, Level I
Status does not exist and the Company has a long-term senior secured
debt rating (whether or not published) of BBB- or better by S&P AND,
unless the Company is then unrated by Moody's, Baa1 or better by
Moody's.
"LEVEL III STATUS": exists at any date if, at such date, neither
Level I Status nor Level II Status exists and the Company has a long-
term senior secured debt rating (whether or not published) of BB+ or
better by S&P AND, unless the Company is then unrated by Moody's, Ba1 or
better by Moody's.
"LEVEL IV STATUS": exists at any date if, at such date, neither
Level I Status, Level II Status nor Level III Status exists and the
Company has a long-term senior secured debt rating (whether or not
published) of BB or better by S&P AND, unless the Company is then
unrated by Moody's, Ba2 or better by Moody's.
"LEVEL V STATUS": exists at any date if, at such date, none of
Level I Status, Level II Status, Level III Status or Level IV Status
exists.
"LIBO RATE": with respect to each Interest Period pertaining to
Eurodollar Loans, the rate per annum at which the Administrative Agent's
Eurodollar Lending Office is offered Dollar deposits two Working Days
prior to the beginning of such Interest Period in the interbank
eurodollar market where the foreign currency and exchange operations of
such Eurodollar Lending Office are customarily conducted at 10:00 a.m.,
New York time, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount equal to the
amount of the Eurodollar Loan of the Administrative Agent to be
outstanding during such Interest Period, divided by (b) a number equal
to 1.00 minus the aggregate of the rates (expressed as a decimal
fraction) of reserve requirements current on the date two Working Days
prior to the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other governmental authority having
jurisdiction with respect thereto), as now and from time to time
hereafter in effect, dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Board) maintained by a member bank
of such System (the "EUROCURRENCY RESERVE REQUIREMENTS") (such LIBO Rate
to be adjusted to the nearest or next higher 1/100 of one percent).
"LIEN": with respect to any asset, (i) any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset or (ii) the interest of a vendor or lessor under any conditional
sale agreement, financing lease or other title retention agreement
relating to such asset.
"LOANS": any loan made by any Bank hereunder.
"LOAN AGREEMENT": the Loan Agreement dated as of December 1, 1983
between the Company and the Industrial Development Authority of the
State of New Hampshire, as such agreement may be amended from time to
time.
"LOAN DOCUMENTS": the collective reference to this Agreement, the
Notes, the Letters of Credit, the Applications, the Pledge Agreement,
the Mortgage, the Supplemental Indenture and the Collateral Bonds.
"MAINE YANKEE/MEPCO GUARANTEES": the obligations of the Company
with respect to its status as a stockholder and sponsor of Maine Yankee
Atomic Power Company ("MAINE YANKEE") and Maine Electric Power Company,
Inc. ("MEPCO"), as more particularly set forth in Exhibit H.
"MAJORITY BANKS": at a particular time, the holders of at least
51% of the sum of (a) the aggregate unpaid principal amount of the Term
Loans and (b) the aggregate Revolving Credit Commitments (or if the
Revolving Credit Commitments have been terminated, the Aggregate
Outstanding Revolving Extensions of Credit).
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole, or (b)
the validity or enforceability of (i) this Agreement or any of the other
Loan Documents or (ii) the rights or remedies of the Administrative
Agent or the Banks hereunder or thereunder.
"MOODY'S": Moody's Investors Service, Inc. and its successors.
"MORTGAGE": the Mortgage and Deed of Trust of the Company to City
Bank Farmers Trust Company (of which Citibank, N.A., a national banking
association, is the successor), as trustee, dated as of July 1, 1936, as
heretofore and hereafter supplemented and amended.
"NOTES": the collective reference to the Revolving Credit Notes,
the Swing Line Note and the Term Notes.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"PLAN": at any time, any employee benefit plan which is covered by
ERISA and in respect of which the Company or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENT": the Pledge Agreement to be executed and
delivered by the Company, substantially in the form of Exhibit F, as the
same may be amended, supplemented or otherwise modified from time to
time.
"PREFERRED STOCK": as defined in Section 6.10(b).
"PURCHASING BANKS": as defined in Section 9.6(c).
"REGISTER": as defined in Section 9.6(d).
"REIMBURSEMENT OBLIGATIONS": the obligation of the Company to
reimburse the Issuing Bank pursuant to Section 3.5(a) for amounts drawn
under Letters of Credit.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder.
"REQUIRED BANKS": at a particular time, the holders of at least
60% of the sum of (a) the aggregate unpaid principal amount of the Term
Loans and (b) the aggregate Revolving Credit Commitments (or, if the
Revolving Credit Commitments have been terminated, the Aggregate
Outstanding Revolving Extensions of Credit).
"REVOLVING CREDIT BANKS": each Bank which has a Revolving Credit
Commitment or which has made a Revolving Credit Loan.
"REVOLVING CREDIT COMMITMENT": as to any Bank, its obligation, if
any to make Revolving Credit Loans to, and/or issue or participate in
Letters of Credit issued on behalf of, the Company in an aggregate
amount not to exceed at any one time outstanding the amount set forth
opposite such Revolving Credit Bank's name in Schedule I under the
heading "Revolving Credit Commitment" or, in the case of any Bank that
is a Purchasing Bank, the amount of the assigning Bank's Revolving
Credit Commitment assigned to such Purchasing Bank pursuant to Section
9.6(c) (in each case as such amount may be adjusted from time to time as
provided herein).
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Revolving
Credit Bank, the percentage of the aggregate Revolving Credit
Commitments constituted by its Revolving Credit Commitment (or, if the
Revolving Credit Commitments have terminated, the percentage of the
aggregate amount of the Aggregate Outstanding Revolving Extensions of
Credit of all Revolving Credit Banks then constituted by such Bank's
Aggregate Outstanding Revolving Extensions of Credit (in each case
determined, in the case of clauses (b) and (c) of the definition
thereof, on the basis of the Revolving Credit Commitment Percentages in
effect immediately prior to such termination)).
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and
including the date hereof to but not including the Termination Date or
such earlier date as the Revolving Credit Commitments shall terminate as
provided herein.
"REVOLVING CREDIT NOTE": a note of the Company substantially in
the form of Exhibit A-1 hereto.
"SECOND MORTGAGE BONDS": the bonds issued pursuant to the General
and Refunding Mortgage Indenture.
"S&P": Standard & Poor's Ratings Group and its successors.
"SPECIFIED LETTER OF CREDIT" : any Letter of Credit issued for
the benefit of the trustee under the Loan Agreement.
"STATUS": the existence of Level I Status, Level II Status, Level
III Status, Level IV Status or Level V Status, as the case may be.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company.
"SUBSTANTIAL PART": with respect to any Person, refers to assets
sold, leased or otherwise transferred pursuant to any one or more
transactions (whether or not related) which, in the aggregate, represent
more than 10% of the total assets of such Person as of December 31,
1994.
"SUPPLEMENTAL INDENTURE": as defined in Section 4.2(b).
"SWING LINE COMMITMENT": the Swing Line Bank's obligation to make
Swing Line Loans pursuant to Section 2.4.
"SWING LINE BANK": as defined in Section 2.4(a).
"SWING LINE LOANS": as defined in Section 2.4(a).
"SWING LINE NOTE": as defined in Section 2.4(h).
"TEMPORARY CASH INVESTMENT": any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial
paper rated in the highest grade by a nationally recognized credit
rating agency or (iii) time deposits with, including certificates of
deposit issued by, any bank or trust company organized under the laws of
the United States or any state thereof and having capital, surplus and
undivided profits aggregating at least $500,000,000, PROVIDED in each
case that such Investment matures within one year from the date of
acquisition thereof by the Company or a Subsidiary.
"TERMINATION DATE": June 30, 2000.
"TERM LOAN BANK": each Bank which has a Term Loan Commitment or
which has made a Term Loan.
"TERM LOAN COMMITMENT": as to any Bank, the obligation of such
Bank, if any, to make Term Loans to the Company hereunder in an
aggregate principal amount not to exceed the amount set forth under the
heading "Term Loan Commitment" opposite such Bank's name on Schedule I,
or in the case of any Bank that is a Purchasing Bank, the amount of the
assigning Bank's Term Loan Commitment assigned to such Purchasing Bank
pursuant to Section 9.6(c) (in each case as such amount may be adjusted
from time to time as provided herein). The Term Loan Commitment of each
Term Loan Bank will automatically be terminated on the Effective Date
immediately after the making of any Term Loan by such Bank on such date.
"TERM LOAN PERCENTAGE": as to any Term Loan Bank at any time, the
percentage which (a) such Bank's Term Loan Commitment the outstanding
constitutes of (b) the aggregate Term Loan Commitments then outstanding.
"TERM NOTE": a note of the Company substantially in the form of
Exhibit B.
"TRANSFER EFFECTIVE DATE": as defined in each Assignment and
Acceptance Agreement.
"TRANSFEREE": as defined in Section 9.6(f).
"UNFUNDED VESTED LIABILITIES": with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market
value of all Plan assets allocable to such benefits, all determined as
of the then most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of the Company
or any Subsidiary to the PBGC or the Plan under Title IV of ERISA.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for
Documentary Credits (1993 Revisions), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"WORKING DAY": any day on which dealings in foreign currencies and
exchange between banks may be carried on in London, England, and in New
York, New York.
SECTION 0.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with GAAP.
(b) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the other Loan
Documents or any certificate or other document made or delivered pursuant
hereto or thereto.
ARTICLE II
THE COMMITMENTS
SECTION 2.1 REVOLVING CREDIT LOANS. (a) Subject to the terms and
conditions hereof, each Revolving Credit Bank severally agrees to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Company from time to
time during the Revolving Credit Commitment Period, so long as the Aggregate
Outstanding Revolving Extensions of Credit of such Bank shall at no time
exceed such Bank's Revolving Credit Commitment. During the Revolving Credit
Commitment Period, the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may be (i) Eurodollar Loans, (ii)
Base Rate Loans or (iii) a combination thereof, as determined by the Company
and notified to the Administrative Agent in accordance with Sections 2.2 and
2.14; PROVIDED that no revolving credit Eurodollar Loan shall be made after
the day that is one month prior to the Termination Date.
SECTION 2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Company
may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Working Day if the borrowing is a Eurodollar Loan or
on any Business Day if the borrowing is a Base Rate Loan; PROVIDED that the
Company shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to (a) 12:00 Noon (New
York City time) three Working Days prior to the requested Borrowing Date, in
the case of Eurodollar Loans and (b) 10:00 a.m. (New York City time) on the
requested Borrowing Date, in the case of Base Rate Loans, specifying (i) the
amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be a Eurodollar Loan or a Base Rate Loan or a combination
thereof, and (iv) if the borrowing is to be entirely or partly a Eurodollar
Loan, the length of the Interest Period for such Eurodollar Loan. Each
borrowing pursuant to the Revolving Credit Commitments shall be in an
aggregate principal amount of the lesser of (a) $3,000,000 or any larger
multiple of $1,000,000 and (b) the sum of the Available Revolving Credit
Commitments. Upon receipt of such notice from the Company the Administrative
Agent shall, on the Business Day on which such notice is received, notify
each Bank thereof. Each Revolving Credit Bank will make the amount of its
PRO RATA share of each borrowing available to the Administrative Agent for
the account of the Company at the office of the Administrative Agent set
forth in Schedule II hereto at 12:00 noon (in the case of the Eurodollar
Loans) or 2:00 p.m. (in the case of Base Rate Loans), New York City time, on
the Borrowing Date requested by the Company in funds immediately available to
the Administrative Agent as the Administrative Agent may direct. The
proceeds of all such Loans will then be made available to the Company by the
Administrative Agent by crediting the account of the Company specified by the
Company to the Administrative Agent.
SECTION 2.3 REVOLVING CREDIT NOTES. The Revolving Credit Loans
made by each Revolving Credit Bank pursuant hereto shall be evidenced by a
promissory note of the Company, substantially in the form of Exhibit A-1 with
appropriate insertions (a "REVOLVING CREDIT NOTE"), payable to the order of
such Bank, representing the obligation of the Company to pay the lesser of
(a) the amount of the Revolving Credit Commitment of such Bank and (b) the
aggregate unpaid principal amount of all Revolving Credit Loans made by such
Bank, with interest thereon as prescribed in Section 2.13. Each Revolving
Credit Bank is hereby authorized to record the date and amount of each
Revolving Credit Loan (or conversion) made by such Bank, and the date and
amount of each payment or prepayment of principal thereof, and, in the case
of Eurodollar Loans, the Interest Period and interest rate with respect
thereto, on the schedule annexed to and constituting a part of such Bank's
Revolving Credit Note, which recordation shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded, PROVIDED, HOWEVER,
that the failure of the holder of such Note to make any recordation, or any
error in such recordations, shall not affect the obligations of the Company
under such Note. Each Revolving Credit Note shall (a) be dated the Effective
Date, (b) be stated to mature on the Termination Date and (c) bear interest
for the period from the date thereof to the Termination Date on the unpaid
principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in Section 2.13.
SECTION 2.4 SWING LINE COMMITMENT. (a) Subject to the terms and
conditions hereof, Chemical Bank (in such capacity, the "SWING LINE BANK")
agrees to make available to the Company a portion of the credit otherwise
available under the Revolving Credit Commitments from time to time during the
Revolving Credit Commitment Period by making swing line loans ("SWING LINE
LOANS") to the Company in an aggregate principal amount not to exceed
$5,000,000 (notwithstanding that the Swing Line Loans outstanding at any
time, when aggregated with the Swing Line Bank's other outstanding revolving
extensions of credit hereunder, may exceed such Bank's Revolving Credit
Commitment then in effect). During the Commitment Period, the Company may
use the Swing Line Commitment by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof. All Swing Line Loans shall
at all times be Base Rate Loans.
(b) Whenever the Company desires that the Swing Line Bank make
Swing Line Loans under Section 2.4(a), it shall give the Swing Line Bank
irrevocable telephonic notice confirmed promptly in writing (which telephonic
notice must be received by the Swing Line Bank not later than 2:00 P.M., New
York City time, on the proposed Borrowing Date), specifying (a) the amount to
be borrowed and (b) the requested Borrowing Date. Each borrowing under the
Swing Line Commitment shall be in an amount equal to $100,000 or a whole
multiple of $100,000 in excess thereof. Not later than 4:00 P.M., New York
City time, on the Borrowing Date specified in a notice in respect of Swing
Line Loans, the Swing Line Bank shall make available to the Administrative
Agent for the account of the Company at the office of the Administrative
Agent specified in Schedule II hereto an amount in immediately available
funds equal to the amount of the Swing Line Loan to be made by the Swing Line
Bank. The proceeds of such Swing Line Loan will then be made available to
the Company on such Borrowing Date by the Administrative Agent crediting the
account of the Company on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Swing Line Bank and
in like funds as received by the Administrative Agent.
(c) The Swing Line Bank, at any time and from time to time in its
sole and absolute discretion may, and, at any time at which there shall be a
Swing Line Loan outstanding for more than five Business Days, the Swing Line
Bank shall, on behalf of the Company (which hereby irrevocably directs the
Swing Line Bank to act on its behalf), upon notice given by the Swing Line
Bank no later than 10:00 A.M., New York City time, on the relevant refunding
date, request each Revolving Credit Bank to make, and each Revolving Credit
Bank hereby agrees to make, a Revolving Credit Loan (which shall be a Base
Rate Loan), in an amount equal to such Revolving Credit Bank's Revolving
Credit Commitment Percentage of the aggregate amount of the Swing Line Loans
(the "REFUNDED SWING LINE LOANS") outstanding on the date of such notice, to
refund such Swing Line Loans. Each Revolving Credit Bank shall make the
amount of such Revolving Credit Loan available to the Administrative Agent at
its office set forth in Schedule II hereto in immediately available funds, no
later than 1:00 P.M., New York City time, on the date of such notice. The
proceeds of such Revolving Credit Loans shall be distributed by the
Administrative Agent to the Swing Line Bank and immediately applied by the
Swing Line Bank to repay the Refunded Swing Line Loans. Effective on the day
such Revolving Credit Loans are made, the portion of the Swing Line Loans so
paid shall no longer be outstanding as Swing Line Loans.
(d) The making of any Swing Line Loan hereunder shall be subject
to the agreement of the Swing Line Bank in its discretion to make such Swing
Line Loan, and, in any event, the satisfaction of the applicable conditions
precedent thereto set forth in Section 4. The Swing Line Bank shall notify
the Company of its election not to make Swing Line Loans hereunder.
(e) If, for any reason, Revolving Credit Loans may not be (as
determined by the Administrative Agent in its sole discretion), or are not,
made pursuant to Section 2.4(c) to repay Swing Line Loans as required by said
Section, then, effective on the date such Revolving Credit Loans would
otherwise have been made, each Revolving Credit Bank severally,
unconditionally and irrevocably agrees that it shall purchase a participating
interest in such Swing Line Loans ("UNREFUNDED SWING LINE LOANS") in an
amount equal to the amount of Revolving Credit Loans which would otherwise
have been made by such Bank pursuant to Section 2.4(c). Each Revolving
Credit Bank will immediately transfer to the Administrative Agent, in
immediately available funds, the amount of its participation (the "SWING LINE
PARTICIPATION AMOUNT"), and the proceeds of such participation shall be
distributed by the Administrative Agent to the Swing Line Bank in such amount
as will reduce the amount of the participating interest retained by the Swing
Line Bank in its Swing Line Loans to the amount of the Revolving Credit Loans
which were to have been made by it pursuant to Section 2.4(c).
(f) Whenever, at any time after the Swing Line Bank has received
from any Revolving Credit Bank such Bank's Swing Line Participation Amount,
the Swing Line Bank receives any payment on account of the Swing Line Loans,
the Swing Line Bank will distribute to such Bank its Swing Line Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Bank's participating interest was
outstanding and funded and, in the case of principal and interest payments,
to reflect such Bank's PRO RATA portion of such payment if such payment is
not sufficient to pay the principal of and interest on all Swing Line Loans
then due); PROVIDED, HOWEVER, that in the event that such payment received by
the Swing Line Bank is required to be returned, such Bank will return to the
Swing Line Bank any portion thereof previously distributed to it by the Swing
Line Bank.
(g) Each Revolving Credit Bank's obligation to make the Loans
referred to in Section 2.4(c) and to purchase participating interests
pursuant to Section 2.4(e) shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such Bank or
the Company may have against the Swing Line Bank, the Company or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 4; (iii) any adverse change in the condition
(financial or otherwise) of the Company; (iv) any breach of this Agreement or
any other Loan Document by the Company or any Bank; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
(h) The Swing Line Loans made by the Swing Line Bank pursuant
hereto shall be evidenced by a promissory note of the Company, substantially
in the form of Exhibit A-2 with appropriate insertions (the "SWING LINE
NOTE"), payable to the order of the Swing Line Bank, representing the
obligation of the Company to pay the amount of the Swing Line Commitment or,
if less, the unpaid principal amount of the Swing Line Loans. The Swing Line
Bank is authorized to record the date and amount of each Swing Line Loan made
by such Bank, and the date and amount of each payment or prepayment of
principal thereof, on the schedule annexed to and constituting a part of the
Swing Line Note, which recordation shall constitute PRIMA FACIE evidence of
the accuracy of the information so recorded, PROVIDED, HOWEVER, that the
failure of the holder of such Note to make any recordation, or any error in
such recordations, shall not affect the obligations of the Company under such
Note. The Swing Line Note shall (a) be dated the Effective Date, (b) be
stated to mature on the Termination Date, and (c) bear interest for the
period from the date thereof to the Termination Date on the unpaid principal
amount thereof from time to time outstanding at the applicable interest rate
per annum determined as provided in Section 2.13.
SECTION 2.5 COMMITMENT FEE. The Company will pay to the
Administrative Agent for the account of the Revolving Credit Banks a
commitment fee from and including the date hereof to the Termination Date,
computed at a per annum rate equal to the Commitment Fee Rate on the average
daily amount of the Available Revolving Credit Commitments during the period
for which payment is made. Such commitment fee shall be payable quarterly on
the last day of each March, June, September and December and on the
Termination Date or such earlier date as the Revolving Credit Commitments
shall terminate as provided herein, commencing on the first of such dates to
occur after the date hereof.
SECTION 2.6 OPTIONAL TERMINATION OR REDUCTION OF REVOLVING CREDIT
COMMITMENTS. The Company shall have the right, upon not less than five
Business Days' irrevocable notice to the Administrative Agent, to terminate
the Revolving Credit Commitments or, from time to time, reduce the amount of
the Revolving Credit Commitments, PROVIDED that (i) after giving effect to
any such reduction (together with any prepayment of Revolving Credit Loans
and Swing Line Loans made on the date of such reduction), the sum of the
Aggregate Outstanding Revolving Extensions of Credit of all Revolving Credit
Banks then outstanding shall not exceed the aggregate amount of the Revolving
Credit Commitments as then reduced and (ii) any such termination of the
Revolving Credit Commitments shall be accompanied by prepayment in full of
the Revolving Credit Loans and Swing Line Loans then outstanding hereunder,
together with accrued interest thereon to the date of such prepayment, the
termination of any Letter of Credit then outstanding, and the payment of any
unpaid commitment fee then accrued hereunder. Any such reduction shall be in
an amount of $5,000,000 or any larger multiple of $1,000,000 and shall reduce
permanently the amount of the Revolving Credit Commitments then in effect.
SECTION 2.7 TERM LOANS. Subject to the terms and conditions
hereof, each Term Loan Bank severally agrees to make a Term Loan to the
Company on the Effective Date in an amount not to exceed the amount of the
Term Loan Commitment of such Bank. The Term Loans may be (a) Eurodollar
Loans, (b) Base Rate Loans, (c) or a combination thereof, as determined by
the Company and notified to the Administrative Agent in accordance with
Sections 2.9 and 2.14; PROVIDED, that no term Eurodollar Loan shall be made
after the day that is one month prior to the Termination Date.
SECTION 2.8 TERM NOTES. The Term Loan made by each Term Loan Bank
pursuant hereto shall be evidenced by a promissory note of the Company,
substantially in the form of Exhibit B, with appropriate insertions therein
as to date and principal amount, payable to the order of such Bank and
representing the obligation of the Company to pay the lesser of (a) the
initial amount of the Term Loan of such Bank and (b) the unpaid principal
amount from time to time of such Bank's Term Loan, with interest thereon as
prescribed in Section 2.13. Each Term Loan Bank is hereby authorized to
record the date and amount of each Term Loan (or conversion) made by such
Bank, and the date and amount of each payment or prepayment of principal of
such Bank's Term Loan, and, in the case of Eurodollar Loans, the Interest
Period and interest rate with respect thereto, on the schedule annexed to and
constituting a part of its Term Note, and any such recordation shall
constitute PRIMA FACIE evidence of the accuracy of the information so
recorded; provided, however, that the failure of the holder of such Note to
make any recordation or any error in such recordations shall not effect the
obligations of the Company under such Note. Each Term Note shall (a) be
dated the Effective Date, (b) be stated to mature as provided in Section
2.11, and (c) bear interest for the period from the date thereof on the
unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 2.13.
SECTION 2.9 PROCEDURE FOR TERM LOAN BORROWING. The Company shall
give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to (a) 12:00 Noon (New York City
time) three Working Days prior to the Effective Date if the Term Loans are to
be initially Eurodollar Loans, or (b) 10:00 a.m. (New York City time) one
Business Day prior to the Effective Date if the Term Loans are to be
initially Base Rate Loans, requesting that the Term Loan Banks make the Term
Loans on the Effective Date and specifying (i) the amount of the borrowing,
not to exceed the aggregate amount of the Term Loan Commitments, and (ii)
whether the Term Loans are to be initially Eurodollar Loans or Base Rate
Loans or a combination thereof. Not later than 12:00 noon, New York City
time, on the Effective Date, each Term Loan Bank shall make available to the
Administrative Agent at its office specified in Schedule II hereto the amount
of such Bank's PRO RATA share of the borrowing in immediately available
funds. The proceeds of all such Term Loans will be made available to the
Company by the Administrative Agent at the office of the Administrative Agent
specified in Schedule II hereto by crediting the account of the Company on
the books of such office of the Administrative Agent with the aggregate of
the amount made available to the Administrative Agent by the Term Loan Banks
and in like funds as received by the Administrative Agent.
SECTION 2.10 OPTIONAL PREPAYMENTS. The Company may on the last
day of the relevant Interest Period if the Loans to be prepaid are in whole
or in part Eurodollar Loans, or at any time and from time to time if the
Loans to be prepaid are Base Rate Loans prepay such Loans, in whole or in
part, without premium or penalty, upon at least three Business Days'
irrevocable notice to the Administrative Agent, specifying (i) the date and
amount of prepayment; (ii) whether the prepayment is of Eurodollar Loans or
Base Rate Loans or a combination thereof; and (iii) if of a combination
thereof the amount of prepayment allocable to each. Upon receipt of such
notice the Administrative Agent shall, within one Business Day of the date
such notice is received, notify each Bank thereof. If such notice is given,
the Company shall make such prepayment and the payment amount specified in
such notice shall be due and payable on the date specified therein, together
with accrued interest to such date on the amount prepaid. Partial
prepayments of the Term Loans shall be applied to the installments of
principal thereof in the inverse order of maturity. Amounts prepaid on
account of the Term Loans may not be reborrowed. Partial prepayments shall
be in an aggregate principal amount of $1,000,000, or any multiple thereof
(or, in the case of Swing Line Loans, any whole multiple of $100,000);
PROVIDED, that at no time may any Eurodollar Tranche be outstanding after
such prepayment in an amount less than $3,000,000.
SECTION 2.11 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS . (a)
The Term Loans shall be repaid by the Company in annual installments on the
dates listed below and in the aggregate amount for each such installment
listed opposite such dates below:
INSTALLMENT DATE AGGREGATE INSTALLMENT AMOUNT
---------------- ----------------------------
June 30, 1996 $12,000,000
June 30, 1997 $12,000,000
June 30, 1998 $12,000,000
June 30, 1999 $12,000,000
June 30, 2000 $12,000,000
(b) The Revolving Credit Commitments shall be automatically and
permanently reduced on the dates listed below and in the aggregate amount for
each such reduction listed opposite such dates below:
DATE AGGREGATE COMMITMENT REDUCTION
---------------- ------------------------------
December 31, 1995 $1,000,000
June 30, 1996 $2,000,000
December 31, 1996 $3,000,000
If, after giving effect to any reduction of the Revolving Credit Commitments
pursuant to this paragraph, the sum of the Aggregate Outstanding Revolving
Extensions of Credit of all Revolving Credit Banks exceeds the aggregate
Revolving Credit Commitments after giving effect to such reduction, the
Company shall, without notice or demand, immediately repay the Revolving
Credit Loans and the Swing Line Loans in an aggregate principal amount equal
to such excess, together with interest accrued to the date of such prepayment
and any amounts payable under Section 2.19. To the extent that, after giving
effect to any prepayment of the Loans required by the preceding sentence, the
sum of the Aggregate Outstanding Revolving Extensions of Credit of all
Revolving Credit Banks exceeds the aggregate Revolving Credit Commitments
then in effect, the Company shall, without notice or demand, immediately cash
collateralize the then outstanding L/C Obligations in an amount equal to such
excess upon terms reasonably satisfactory to the Administrative Agent.
SECTION 2.12 COMPUTATION OF INTEREST AND FEES. (a) Interest (other
than interest based on the Prime Rate) and commitment fees shall be
calculated on the basis of a 360-day year for the actual days elapsed; and
interest based on the Prime Rate shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Company and the
Banks of each determination of a LIBO Rate. Any change in the interest rate
on a Loan resulting from a change in the Base Rate or the Eurocurrency
Reserve Requirements shall become effective as of the opening of business on
the day on which such change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective. The Administrative Agent shall as soon
as practicable notify the Company and the Banks of the effective date and the
amount of each such change.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Company and the Banks in the absence of manifest error.
SECTION 2.13 INTEREST RATE AND PAYMENT DATES. (a) The Eurodollar
Loans shall bear interest for each Interest Period with respect thereto on
the unpaid principal amount thereof at a rate per annum equal to the LIBO
Rate determined for each such Interest Period in accordance with the terms
hereof plus the Applicable Eurodollar Margin.
(b) The Base Rate Loans shall bear interest on the unpaid
principal amount thereof at a rate per annum equal to the Base Rate plus the
Applicable Base Rate Margin.
(c) If all or a portion of the principal amount of any Eurodollar
Loan shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such Loan shall be converted to a Base Rate Loan
on the last day of the Interest Period then in effect with respect thereto.
Any overdue principal amount of any Eurodollar Loan or Base Rate Loan or
overdue commitment fee pursuant to Section 2.5 shall bear interest at a rate
per annum which is 2% above the rate which would otherwise be applicable
pursuant to Section 2.13(a) or (b) (or, in the case of overdue commitment
fees, 2% above the rate specified in Section 2.13(b)) from the date of such
non-payment until paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date.
SECTION 2.14 CONVERSION OPTIONS. (a) The Company may elect from
time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, PROVIDED that any such conversion of Eurodollar Loans shall be
made only on the last day of an Interest Period with respect thereto. The
Company may elect from time to time to convert Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent at least three Working Days' prior
irrevocable notice of such election. Upon receipt of such notice, the
Administrative Agent shall within one Business Day of the date such notice is
received, notify each Bank thereof. All or any part of outstanding
Eurodollar Loans or Base Rate Loans may be converted as provided herein,
PROVIDED that (i) partial conversions shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof, and (ii) no Loan may be
converted into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing; PROVIDED, FURTHER, that at no time may any
Eurodollar Tranche be outstanding after such conversion in an amount less
than $3,000,000.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Company with the applicable notice provisions contained in Section 2.14(a);
PROVIDED, that no Eurodollar Loan may be continued as such when any Default
or Event of Default has occurred and is continuing, but such Loans shall be
automatically converted to a Base Rate Loan on the last day of the Interest
Period then in effect with respect thereto; the Administrative Agent shall
notify the Banks promptly that such automatic conversion will occur.
(c) Each continuation of or conversion into a Eurodollar Loan
shall constitute a representation and warranty by the Company as of the date
of such continuation or conversion, as the case may be, that no Default or
Event of Default has occurred and is continuing.
SECTION 2.15 INABILITY TO DETERMINE INTEREST RATE. In the event
that:
(i) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Company) that by
reason of circumstances affecting the interbank eurodollar market,
adequate and reasonable means do not exist for ascertaining the LIBO
Rate applicable pursuant to Section 2.13(a) for any Interest Period; or
(ii) the Administrative Agent shall have received notice prior to
the first day of such Interest Period from Banks constituting the
Majority Banks that the interest rate determined pursuant to Section
2.13(a) for such Interest Period does not accurately reflect the cost to
such Banks (as conclusively certified by such Banks) of making or
maintaining their affected Loans during such Interest Period,
with respect to (a) a proposed Loan that the Company has requested be made as
a Eurodollar Loan, (b) a Eurodollar Loan that will result from the requested
conversion of a Base Rate Loan into a Eurodollar Loan or (c) the continuation
of Eurodollar Loans beyond the expiration of the then current Interest Period
with respect thereto, the Administrative Agent shall forthwith give notice of
such determination, confirmed in writing, to the Company and the Banks at
least one day prior to, as the case may be, the requested Borrowing Date for
such Eurodollar Loan, the conversion date of such Base Rate Loan or the last
day of such Interest Period. If such notice is given (x) any requested
Eurodollar Loan shall be made as a Base Rate Loan, (y) any Base Rate Loan
that was to have been converted to a Eurodollar Loan shall be continued as a
Base Rate Loan, and (z) any outstanding Eurodollar Loan shall be converted,
on the last day of the then current Interest Period with respect thereto, to
a Base Rate Loan. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loan shall be made nor shall the Company have
the right to convert a Base Rate Loan to a Eurodollar Loan.
SECTION 2.16 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing
of Loans (other than Swing Line Loans) by the Company hereunder shall be
made, each payment by the Company on account of any commitment fee hereunder
shall be allocated by the Administrative Agent, and any reduction of the
Commitments shall be allocated by the Administrative Agent, PRO RATA
according to the respective Term Loan Percentages or Revolving Credit
Commitment Percentages, as the case may be, of the relevant Banks. Each
payment (including each prepayment) by the Company on account of principal of
and interest on the Term Loans shall be allocated by the Administrative Agent
PRO RATA according to the respective outstanding principal amounts of such
Term Loans then held by the Term Loan Banks. Each payment (including each
prepayment) by the Company on account of principal of and interest on any
Revolving Credit Loans shall be allocated by the Administrative Agent PRO
RATA according to the respective outstanding principal amounts of such
Revolving Credit Loans then held by the Revolving Credit Banks.
(b) All payments (including prepayments) to be made by the Company
on account of principal, interest and fees shall be made without set off or
counterclaim and shall be made to the Administrative Agent on behalf of the
Banks at the Administrative Agent's office located at 270 Park Avenue, New
York, New York 10017, in lawful money of the United States of America and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Banks promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the Eurodollar Loans) becomes
due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate
during such extension. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Working Day, the maturity thereof shall be
extended to the next succeeding Working Day (and interest thereon shall be
payable at the then applicable rate during such extension) unless the result
of such extension would be to extend such payment into another calendar month
in which event such payment shall be made on the immediately preceding
Working Day.
(c) Unless the Administrative Agent shall have been notified in
writing by any Bank prior to a Borrowing Date that such Bank will not make
the amount which would constitute its PRO RATA share of the borrowing on such
date available to the Administrative Agent, the Administrative Agent may
assume that such Bank has made such amount available on such Borrowing Date
and the Administrative Agent may, in reliance upon such assumption, make
available to the Company a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such Borrowing Date,
such Bank shall pay to the Administrative Agent upon the demand of the
Administrative Agent, an amount equal to the product of (i) the Federal Funds
Effective Rate, TIMES (ii) the amount of such Bank's PRO RATA share of such
borrowing, TIMES (iii) a fraction the numerator of which is the number of
days that elapse from and including such Borrowing Date to the date on which
such Bank's PRO RATA share of such borrowing shall have become immediately
available to the Administrative Agent and the denominator of which is 365. A
certificate of the Administrative Agent submitted to any Bank with respect to
any amounts owing under this Section 2.16(c) shall be conclusive, absent
manifest error. If such Bank's PRO RATA share is not in fact made available
to the Administrative Agent by such Bank within three Business Days of such
Borrowing Date, the Administrative Agent shall be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate
Loans hereunder, on demand, from the Company.
SECTION 2.17 TAXES. All payments made by the Company under this
Agreement shall be made free and clear of, and without reduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental authority, agency or instrumentality excluding,
in the case of the Administrative Agent and each Bank, net income and
franchise taxes imposed on the Administrative Agent or such Bank by the
jurisdiction under the laws of which such agent or such Bank is organized or
any political subdivision or taxing authority thereof or therein, or by any
jurisdiction in which such Bank's Domestic Lending Office or Eurodollar
Lending Office, as the case may be, is located or any political subdivision
or taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, deductions, charges or withholdings being hereinafter called
"TAXES"). If any Taxes are required to be withheld from any amounts payable
to the Administrative Agent or any Bank hereunder or under the Notes, the
amounts so payable to the Administrative Agent or such Bank shall be
increased to the extent necessary to yield to the Administrative Agent or
such Bank (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement
and the Notes. If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, the Company
shall indemnify the Administrative Agent and the Banks for any incremental
taxes, interest or penalties that may become payable by any of them as a
result of any such failure. The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
SECTION 2.18 REQUIREMENTS OF LAW. (a) In the event that any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any
central bank or other governmental authority, agency or instrumentality:
(i) does or shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Note, and Letter of
Credit, any Application or any Loans made hereunder, or change the basis
of taxation of payments to such Bank of principal, commitment fee,
interest or any other amount payable hereunder (except for changes in
the rate of tax on the overall net income of such Bank);
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank which are not otherwise
included in the determination of the LIBO Rate hereunder;
(iii) does or shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank
of making, renewing or maintaining advances or extensions of credit or
issuing or participating in Letters of Credit or to reduce any amount
receivable hereunder then, in any such case, the Company shall promptly pay
such Bank, upon its demand, any additional amounts necessary to compensate
such Bank for such additional cost or reduced amount receivable which such
Bank deems to be material as determined by such Bank with respect to this
Agreement, the Note or the Loans made hereunder. If a Bank becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Company, through the Administrative Agent, of the event by reason
of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted by a Bank,
through the Administrative Agent, to the Company shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of
this Agreement and payment of the Loans.
(b) In the event that any Bank shall have determined that the
adoption of any law, rule or regulation regarding capital adequacy, or any
change therein, or in the interpretation or application thereof or compliance
by any Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) from any central bank or other governmental
authority, agency or instrumentality, in any case, made subsequent to the
date hereof, does or shall have the effect of reducing the rate of return on
such Bank's capital as a consequence of its obligation hereunder or under any
Letter of Credit to a level below that which such Bank could have achieved
but for such adoption, change or compliance (taking into consideration such
Bank's policies with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, after submission by such Bank to
the Company (with a copy to the Administrative Agent) of a written request
therefor, the Company shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction.
SECTION 2.19 INDEMNITY. The Company agrees to indemnify each Bank
and to hold such Bank harmless from any loss or expense which such Bank may
sustain or incur as a consequence of (a) default by the Company in payment of
the principal amount of or interest on the Eurodollar Loans of such Bank,
including, but not limited to, any such loss or expense arising from interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain its Eurodollar Loans hereunder, (b) default by the Company in making
a borrowing, conversion or continuation after the Company has given a notice
in accordance with Section 2.2, 2.9 or 2.14 hereof, (c) default by the
Company in making any prepayment after the Company has given a notice in
accordance with Section 2.10 hereof or (d) the making of a prepayment of a
Eurodollar Loan on a day which is not the last day of an Interest Period with
respect thereto, including, but not limited to, any such loss or expense
arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its Eurodollar Loans hereunder. This
covenant shall survive termination of this Agreement and payment of the
Loans.
ARTICLE III
LETTERS OF CREDIT
SECTION 3.1 L/C COMMITMENT.
(a) Subject to the terms and conditions hereof, the Issuing Bank,
in reliance on the agreements of the other Banks set forth in Section 3.4(a),
agrees to issue letters of credit ("LETTERS OF CREDIT") for the account of
the Company on any Business Day during the Revolving Credit Commitment Period
in such form as may be approved from time to time by the Issuing Bank;
PROVIDED that the Issuing Bank shall not issue any Letter of Credit if, after
giving effect to such issuance, (1) the L/C Obligations would exceed the L/C
Commitment or (2) the Available Revolving Credit Commitment of any Revolving
Credit Bank would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be a standby letter of
credit issued to support obligations of the Company, contingent or
otherwise, acceptable to the Issuing Bank and
(ii) expire no later than the earlier of (x) one year after the
date of issuance thereof and (y) the Termination Date.
(c) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(d) The Issuing Bank shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
SECTION 3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.
The Company may from time to time request that the Issuing Bank
issue a Letter of Credit by delivering to the Issuing Bank at its address for
notices specified herein an Application therefor, completed to the
satisfaction of the Issuing Bank, and such other certificates, documents and
other papers and information as the Issuing Bank may request. Upon receipt of
any Application, the Issuing Bank will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
the Issuing Bank be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Issuing Bank and the Company.
The Issuing Bank shall furnish a copy of such Letter of Credit to the Company
promptly following the issuance thereof.
SECTION 3.3 COMMISSIONS AND OTHER CHARGES.
(a) The Company shall pay to the Administrative Agent, for the
account of the Revolving Credit Banks, a letter of credit commission with
respect to each Letter of Credit, computed for the period from the date of
issuance of such Letter of Credit to the expiration date of such Letter of
Credit at a rate per annum, calculated on the basis of a 360-day year, equal
to the Applicable Eurodollar Margin from time to time in effect on the
average daily aggregate amount available to be drawn under such Letter of
Credit during the period for which payment is made, and payable to the
Revolving Credit Banks (including the Issuing Bank in its capacity as a
Revolving Credit Bank) to be shared ratably among them in accordance with
their respective Revolving Credit Commitment Percentages. In addition to the
foregoing, the Company shall pay to the Issuing Bank, for its own account, a
fronting commission with respect to each Letter of Credit, computed for the
period from the date of issuance of such Letter of Credit to the expiration
date of such Letter of Credit at a rate per annum, calculated on the basis of
a 360-day year, equal to one-half of 1% on the average daily aggregate amount
available to be drawn under such Letter of Credit during the period for which
payment is made. Such commissions shall be payable in arrears on each L/C
Fee Payment Date to occur after the date of issuance of each Letter of Credit
and shall be nonrefundable.
(b) In addition to the foregoing commissions, the Company shall
pay or reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the L/C Participants all
commissions received by the Administrative Agent for their respective
accounts pursuant to this Section.
SECTION 3.4 L/C PARTICIPATIONS.
(a) The Issuing Bank irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce the Issuing Bank to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Bank, on the terms
and conditions hereinafter stated, for such L/C Participant's own account and
risk an undivided interest equal to such L/C Participant's Revolving Credit
Commitment Percentage in the Issuing Bank's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Bank thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Bank that, if a draft is paid under any Letter of
Credit for which the Issuing Bank is not reimbursed in full by the Company in
accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Bank upon demand at the Issuing Bank's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which
is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Bank pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Bank under any Letter of Credit is
paid to the Issuing Bank within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Bank on demand
an amount equal to the product of (1) such amount, times (2) the daily
average Federal Funds Effective Rate, as quoted by the Issuing Bank, during
the period from and including the date such payment is required to the date
on which such payment is immediately available to the Issuing Bank, times (3)
a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required
to be paid by any L/C Participant pursuant to Section 3.4(a) is not in fact
made available to the Issuing Bank by such L/C Participant within three
Business Days after the date such payment is due, the Issuing Bank shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum
applicable to Base Rate Loans hereunder. A certificate of the Issuing Bank
submitted to any L/C Participant with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), the Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Company or otherwise, including proceeds of collateral applied
thereto by the Issuing Bank), or any payment of interest on account thereof,
the Issuing Bank will distribute to such L/C Participant its pro rata share
thereof; PROVIDED, HOWEVER, that in the event that any such payment received
by the Issuing Bank shall be required to be returned by the Issuing Bank,
such L/C Participant shall return to the Issuing Bank the portion thereof
previously distributed by the Issuing Bank to it.
SECTION 3.5 REIMBURSEMENT OBLIGATION OF THE COMPANY.
(a) The Company agrees to reimburse the Issuing Bank on each date
on which the Issuing Bank notifies the Company of the date and amount of a
draft presented under any Letter of Credit and paid by the Issuing Bank for
the amount of (1) such draft so paid and (2) any taxes, fees, charges or
other costs or expenses incurred by the Issuing Bank in connection with such
payment. Each such payment shall be made to the Issuing Bank at its address
for notices specified herein in lawful money of the United States of America
and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Company under this Section (i) from the date the draft
presented under the affected Letter of Credit is paid to the date on which
the Company is required to pay such amounts pursuant to paragraph (a) above
at the rate which would then be payable on any outstanding Base Rate Loans
and (ii) thereafter until payment in full at the rate which would be payable
on any outstanding Base Rate Loans which were then overdue.
(c) Each drawing under any Letter of Credit shall constitute a
request by the Company to the Administrative Agent for a borrowing pursuant
to Section 2.2 of Base Rate Loans in the amount of such drawing. The
Borrowing Date with respect to such borrowing shall be the date of such
drawing.
SECTION 3.6 OBLIGATIONS ABSOLUTE.
(a) The Company's obligations under this Section 3 shall be
absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment which the Company may have
or have had against the Issuing Bank or any beneficiary of a Letter of
Credit.
(b) The Company also agrees with the Issuing Bank that the Issuing
Bank shall not be responsible for, and the Company's Reimbursement
Obligations under Section 3.5(a) shall not be affected by, among other
things, (1) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or (2) any dispute between or among the Company and any
beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or (3) any claims whatsoever of the Company
against any beneficiary of such Letter of Credit or any such transferee.
(c) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except
for errors or omissions caused by the Issuing Bank's gross negligence or
willful misconduct.
(d) The Company agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence of willful
misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Company and shall not result in any liability of the Issuing Bank to the
Company.
SECTION 3.7 LETTER OF CREDIT PAYMENTS.
If any draft shall be presented for payment under any Letter of
Credit, the Issuing Bank shall promptly notify the Company of the date and
amount thereof. The responsibility of the Issuing Bank to the Company in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are in conformity with such Letter of Credit. If an Event of
Default shall have occurred and be continuing, the Issuing Bank shall be
entitled to give notice to the trustee under the Loan Agreement that it has
terminated its obligations to honor "C Drawings" and "D Drawings" under the
Specified Letter of Credit.
SECTION 3.8 APPLICATION.
To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.
ARTICLE IV
CONDITIONS TO EXTENSIONS OF CREDIT
The obligations of each Bank to make each extension of credit
hereunder are subject to the satisfaction of the following conditions
precedent:
SECTION 4.1 EACH EXTENSION OF CREDIT.
In the case of the making of each Loan and the issuance of each
Letter of Credit (including the initial extensions of credit hereunder):
(a) the Administrative Agent (or in the case of any Letter of
Credit, the Issuing Bank) shall have received notice of such extension
of credit as required by Section 2.2, 2.4, 2.9 or 3.2;
(b) immediately prior to and after such extension of credit no
Default or Event of Default shall have occurred and be continuing; and
(c) each of the representations and warranties contained in this
Agreement shall be true and correct on and as of the date of such
extension of credit with the same effect as if made on and as of such
date.
Each borrowing by and issuance of a Letter of Credit on behalf of
the Company hereunder shall constitute a representation and warranty by the
Company as of the date of such extension of credit that (i) the conditions
set forth in this Section 4.1 have been satisfied and (ii) in the case of
each Loan, no more than $8,000,000 in Cash (excluding (x) Temporary Cash
Investments in an aggregate amount not to exceed $22,000,000 maintained
pursuant to the documentation governing the FAME Loan Agreement and (y) Cash
securing the letter of credit issued by Shawmut Bank referred to in Section
4.3) will be retained by the Company after three Business Days from the
relevant Borrowing Date.
SECTION 4.2 FIRST LOAN. In the case of the first Loan hereunder
(in addition to the conditions set forth in Section 4.1 hereof):
(a) the Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Company and each Bank, (ii) the Pledge Agreement, executed and delivered
by the Company, and (iii) for the account of each relevant Bank, a duly
executed Revolving Credit Note, Swing Line Note or Term Note complying
with the provisions of Section 2.3, 2.4(h) or 2.8;
(b) (i) the Administrative Agent and each of the Banks shall have
received a Supplemental Indenture (the "Supplemental Indenture") to the
Mortgage in form and substance satisfactory to it providing for the
issuance of First Mortgage Bonds (the "COLLATERAL BONDS") having an
aggregate principal amount of at least $115,000,000 and (ii) the
Administrative Agent shall have received a certificate evidencing each
Collateral Bond registered in the name of the Administrative Agent;
(c) the Administrative Agent shall have received, with a photocopy
for each Bank, an opinion each of (i) Frederick Samp, General Counsel of
the Company, dated the Effective Date, substantially in the form of
Exhibit E-1 hereto, (ii) Winthrop, Stimson, Putnam & Roberts, New York
counsel to the Company, dated the Effective Date, substantially in the
form of Exhibit E-2 hereto and (iii) Eaton, Peabody, Bradford & Veague,
special Maine counsel to the Administrative Agent, dated the Effective
Date, substantially in the form of Exhibit E-3 hereto, and covering such
additional matters relating to the transactions contemplated hereby as
any Bank may reasonably request;
(d) the Administrative Agent shall have received evidence in form
and substance satisfactory to it (i) of the termination and cancellation
of the commitment to lend thereunder of the banks that are parties to
the Credit Agreement, dated as of May 26, 1992, as amended from time to
time, among the Company, the banks named therein and Chemical Bank, as
administrative agent (the "EXISTING CREDIT AGREEMENT"), and (ii) that
all amounts of principal, interest and fees due and payable to such
banks thereunder shall have been paid in full (it being understood that,
without affecting any terms of the Existing Credit Agreement which
expressly survive the termination thereof, each Bank party to the
Existing Credit Agreement hereby waives any requirement of advance
notice of such termination contained therein and hereby agrees that the
Existing Credit Agreement and the commitments thereunder shall terminate
simultaneously with the satisfaction of the conditions set forth in this
Section 4.2);
(e) the Administrative Agent shall have received, with a photocopy
for each Bank, true and complete copies of the certificate of
incorporation and by-laws of the Company, certified as of the date of
the first borrowing, as complete and correct copies thereof by the
Secretary or an Assistant Secretary of the Company;
(f) the Administrative Agent shall have received, with a photocopy
for each Bank, a copy of the resolutions, in form and substance
satisfactory to the Banks, of the Board of Directors of the Company
authorizing (i) the execution, delivery and performance of the Loan
Documents and (ii) the extensions of credit contemplated hereunder,
certified by the Secretary or an Assistant Secretary of the Company,
which certificate shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded and are in full
force and effect;
(g) the Administrative Agent shall have received, with a photocopy
for each Bank, a certificate of the Secretary or an Assistant Secretary
of the Company, substantially in the form of Exhibit C, as to the
incumbency and signature of the officers signing any Loan Document, any
of the certificates required hereunder and any other document or
certificate delivered pursuant to the provisions of this Agreement,
together with evidence of the incumbency of such Secretary or Assistant
Secretary;
(h) the Administrative Agent shall have received, with a photocopy
for each Bank, a certified copy of the order from the Commission
referred to in Section 5.6;
(i) the Administrative Agent shall have received evidence
satisfactory to it that the Company has received gross proceeds of at
least $105,000,000 from the issuance of Debt secured by Second Mortgage
Bonds, on terms and conditions satisfactory to the Administrative Agent
and the Banks; and
(j) (i) concurrently with the making of the initial Loans, the
Company shall have paid in full all of its obligations under the
Purchase Agreements between the Company and each of Babcock-Ultrapower
Jonesboro ("Jonesboro") and Babcock-Ultrapower West Enfield ("West
Enfield"), each dated March 31, 1995 (the "Purchase Agreements") and the
aggregate amount so paid, together with transaction costs relating to
such Purchase Agreements, shall not exceed $180,000,000 and (ii) the
Administrative Agent shall have received satisfactory evidence of the
termination of the power purchase contracts between the Company and each
of Jonesboro and West Enfield and the Loan Agreement referred to in the
Purchase Agreements.
SECTION 4.3 SPECIFIED LETTER OF CREDIT. In the case of the
issuance of any Specified Letter of Credit, the Administrative Agent shall
have received evidence satisfactory to it of the termination of the Letter of
Credit issued by Shawmut Bank for the benefit of the trustee under the Loan
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Banks to enter
into this Agreement and make the extensions of credit provided for herein,
the Company represents and warrants to the Administrative Agent and each Bank
that:
SECTION 5.1 CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Maine and has all corporate power and all material
governmental licenses, permits, authorizations, consents, approvals and
franchises required to own and operate its properties and to carry on its
business as now conducted.
SECTION 5.2 CORPORATE AUTHORIZATION; NON-CONTRAVENTION. The
execution, delivery and performance by the Company of each Loan Document are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the certificate of
organization, as amended, or by-laws of the Company or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Company or result in the creation or imposition of any Lien on any asset of
the Company or any of its Subsidiaries (except as contemplated by the
Mortgage and the Pledge Agreement).
SECTION 5.3 BINDING EFFECT. Each Loan Document constitutes a
valid and binding obligation of the Company, enforceable in accordance with
its terms.
SECTION 5.4 FINANCIAL INFORMATION. (a) The balance sheet of the
Company as of December 31, 1994 and the related statements of income,
retained earnings and statement of cash flows for plant additions for the
fiscal year then ended (reported on by Coopers & Lybrand), copies of which
have been delivered to each of the Banks and are attached hereto as Exhibit
I, fairly present, in conformity with GAAP applied on a consistent basis, the
financial position of the Company as of such date and its results of
operations and statement of cash flows, for plant additions for such fiscal
year. The Company does not have any material liability, contingent or other,
not provided for or described in (i) the financial statements referred to in
this Section 5.4(a), (ii) the Company's 1994 Form 10-K or (iii) the Company's
report to stockholders for the first quarter of 1995 (collectively, the
"DISCLOSURE DOCUMENTS"). Copies of each of the Disclosure Documents have
been provided to each of the Banks.
(b) Except as set forth in the Disclosure Documents, since
December 31, 1994, there has been no development or event nor any prospective
development or event, which has had or could have a Material Adverse Effect.
SECTION 5.5 LEGAL AND REGULATORY PROCEEDINGS. Except as set forth
in the Disclosure Documents, there is no action, suit, proceeding or
investigation pending, or to the knowledge of the Company threatened, against
or affecting the Company or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, an adverse decision
which might materially and adversely affect the business, financial position
or results of operations of the Company or which in any manner questions the
validity of any Loan Document. Except as set forth in the Disclosure
Documents, since December 31, 1994, there has been no materially adverse
development or determination (interim or final) in any such action, suit,
proceeding or investigation.
SECTION 5.6 GOVERNMENTAL AUTHORIZATION. Except for the order of
the Commission authorizing the entering into, execution, delivery and
performance of the Loan Documents, no approval, consent or authorization of
or filing with any governmental or public regulatory body or authority is
required in connection with the execution, delivery and performance of any
Loan Document. On or prior to the first borrowing hereunder, the order of
the Commission authorizing the entering into, execution, delivery and
performance of the Loan Documents as aforesaid will have been obtained and a
true copy thereof will have been furnished to each of the Banks. On the date
of each subsequent extension of credit hereunder, such order will be in full
force and effect.
SECTION 5.7 TAXES. United States federal income tax returns of
the Company have been examined and closed through the fiscal year ended
December 31, 1988. The Company has filed all United States federal income
tax returns and all other material tax returns which are required to be filed
by it and has paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company. The charges, accruals and reserves on
the books of the Company in respect of taxes or other governmental charges
are adequate in the opinion of the Company.
SECTION 5.8 SUBSIDIARIES. Annexed hereto as Exhibit G is a
statement showing the names of all the Subsidiaries of the Company as of the
date of this Agreement, the amount of the capital stock of each and the
amount thereof owned by the Company, and the business of each. Each such
Subsidiary is a corporation duly organized and validly existing under the
laws of the State of Maine, and each has all requisite corporate power and
all material governmental licenses, permits, authorizations, consents,
approvals and franchises to conduct the business in which it is engaged and
to own and operate the properties used by it in such business. All shares of
each such Subsidiary owned by the Company have been duly and validly issued
and are fully paid and nonassessable, are free and clear of all Liens and
there are no outstanding options, warrants or other rights to purchase or
securities convertible into or exchangeable for shares of capital stock of
any such Subsidiary.
SECTION 5.9 COMPLIANCE WITH ERISA. The Company has satisfied the
minimum funding standards under ERISA with respect to its Plans and is in
compliance in all material respects with the presently applicable provisions
of ERISA.
SECTION 5.10 USE OF PROCEEDS. The proceeds of the Loans made
under this Agreement will be used by the Company for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any "margin stock" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System. The Company is not engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any such margin
stock within the meaning of such Regulation U.
SECTION 5.11 PROPERTIES. The Company and its Subsidiaries each
has good and sufficient title to all real property and all machinery and
equipment owned by it and owns or possesses adequate rights to use all real
property and all machinery and equipment necessary to the conduct of its
business, all free and clear of Liens other than Liens permitted by Section
6.5. The Company enjoys peaceful and undisturbed possession under all of its
leases with respect to materially important properties held under lease, and
all of such leases are in full force and effect.
SECTION 5.12 NO DEFAULTS, VIOLATIONS, ETC. The Company is not in
violation of its certificate of organization, as amended, or by-laws or in
violation of any law, ordinance, rule or regulation to which it is subject
which violations, individually or in the aggregate, would materially and
adversely affect the business, properties, operations, prospects or condition
(financial or other) of the Company, or in default in any material respect in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
indenture or loan agreement of the Company.
SECTION 5.13 RESTRICTIONS ON COMPANY. Except as set forth in the
Disclosure Documents, the Company is not a party or subject to any contract
or agreement, or any charter, by-law or other corporate restriction, or any
law, ordinance, rule or regulation or order, decree, judgment or license
which, individually or when aggregated, materially and adversely affects or
in the future may (so far as the Company can now reasonably foresee)
materially and adversely affect the business of the Company.
SECTION 5.14 PUBLIC UTILITY HOLDING COMPANY ACT. The Company is
exempt from the provisions of the Public Utility Holding Company Act of 1935
and the rules promulgated thereunder other than Section 9(a)(2) thereof, and
is not a "subsidiary" or an "affiliate" of any "holding company" as such
terms are defined in said act. The Company is not subject to any other law,
rule or regulation which in any way restricts its ability to incur Debt
pursuant to this Agreement.
ARTICLE VI
COVENANTS
The Company agrees that, so long as any Bank has any Commitment
hereunder, any Letter of Credit is outstanding, or any Loan or other amount
owing hereunder remains unpaid:
SECTION 6.1 INFORMATION. The Company will deliver to each of the
Banks:
(a) as soon as available and in any event within 100 days after
the end of each fiscal year, a balance sheet of the Company as of the
end of such fiscal year and the related statements of income, retained
earnings and statement of cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal
year, all reported on in a manner acceptable to the Securities and
Exchange Commission by Coopers & Lybrand or other independent public
accountants of nationally recognized standing; PROVIDED that if the
Company has any consolidated Subsidiaries, such financial statements
shall be prepared on a consolidated basis; and PROVIDED, FURTHER, that
such financial statements shall in any event include all figures
necessary to enable the Banks to determine whether the Company shall
have been in compliance with the requirements of Sections 6.7, 6.8, 6.9
and 6.10 as at the end of the fiscal period covered thereby;
(b) as soon as available and in any event within 50 days after the
end of each of the first three quarters of each fiscal year, a balance
sheet of the Company as of the end of such quarter and the related
statements of income, retained earnings and statement of cash flows for
such quarter and for the portion of the Company's fiscal year ended at
the end of such quarter, setting forth in each case in comparative form
the figures for the corresponding quarter and the corresponding portion
of the Company's previous fiscal year, all certified as to fairness of
presentation, generally accepted accounting principles and consistency
by the chief financial officer or the chief accounting officer of the
Company; PROVIDED that if the Company has any consolidated Subsidiaries,
such financial statements shall be prepared on a consolidated basis; and
PROVIDED, FURTHER, that such financial statements shall in any event
include all figures necessary to enable the Banks to determine whether
the Company shall have been in compliance with the requirements of
Sections 6.7, 6.8 and 6.9 as at the end of the fiscal period covered
thereby;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the chief accounting officer of the
Company (i) setting forth calculations in reasonable detail
demonstrating whether the Company was in compliance with the
requirements of Sections 6.3, 6.4, 6.5, 6.7, 6.8, 6.9, and 6.10 on the
date of such financial statements and (ii) stating whether there exists
on the date of such certificate any Default or Event of Default and, if
any Default or Event of Default then exists, setting forth the details
thereof and the action which the Company is taking with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements to the
effect that nothing has come to their attention to cause them to believe
that there existed on the date of such statements any Default or Event
of Default;
(e) forthwith upon the occurrence of any Default or Event of
Default, a certificate of the chief financial officer or the chief
accounting officer of the Company setting forth the details thereof and
the action which the Company is taking with respect thereto;
(f) promptly upon the mailing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly or
monthly reports which the Company shall have filed with the Securities
and Exchange Commission;
(g) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(h) if and when the Company or any Subsidiary gives or is required
to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA or knows
that the plan administrator of any Plan-has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC;
(i) promptly on every December 31, a projected balance sheet as of
the end of the next fiscal year and a projected statement of income,
retained earnings and cash flows for such fiscal year;
(j) forthwith upon the entering into of any commitment for
additional capacity for the generation or transmission of electric
energy in connection with a transaction requiring the approval of the
Commission (or which would require such approval but for specific
exception therefrom with respect to transactions with any "co-generator"
or "small power producer", as such terms are defined in Chapter 172 of
Title 35 of the Maine Revised Statutes), notice of such commitment,
together with a brief description of the nature thereof, the amount
thereof and the approximate dates on which expenditures under such
commitment are to be made and any changes in any of the foregoing upon
the effectiveness thereof;
(k) promptly upon the Company's knowledge thereof, notice of (1)
any material amendment of the terms of any joint ownership agreement,
joint venture, partnership, plant construction or similar agreement or
arrangement for the ownership, construction or operation of electric
generating facilities to which the Company is a party, and (2) any
material default by any party to such agreement or arrangement;
(l) (i) on or about June 30 and December 31 of each year, a letter
from S&P setting forth the Company's long-term senior secured debt
rating then in effect and (ii) within two Business Days after the
occurrence thereof, written notice of any change in Status; PROVIDED
that the failure to provide such notice shall not delay or otherwise
affect any change in the Applicable Base Rate Margin, the Applicable
Eurodollar Margin or the Commitment Fee Rate which is to occur upon a
change in Status pursuant to the terms of this Agreement; and
(m) from time to time such additional information regarding the
financial position or business of the Company as the Administrative
Agent, at the request of any Bank, may reasonably request.
SECTION 6.2 PAYMENT OF TAXES; PRESERVATION OF CORPORATE EXISTENCE
AND FRANCHISES; MAINTENANCE OF PROPERTIES; COMPLIANCE WITH LAWS; MAINTENANCE
OF INSURANCE. The Company will, and cause each Subsidiary to:
(a) pay and discharge promptly or cause to be paid and discharged
promptly all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any of its
properties, as well as all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon any of its
properties; PROVIDED, that the payment of any such tax, assessment,
charge, levy or claim shall not be required so long as the amount,
applicability or validity thereof shall be contested in good faith by
appropriate proceedings (or, in the case of any tax, assessment, charge
or levy, payment may be made without penalty) and the Company or such
Subsidiary, as the case may be, shall have set aside on its books such
reserves, if any, in respect thereof (segregated to the extent required
by generally accepted accounting principles) as shall be deemed to be
necessary and adequate in the judgment of (i) the Company or such
Subsidiary, as the case may be, and (ii) its independent public
accountants;
(b) subject to Section 6.6, do or cause to be done all things
necessary on its part to preserve and keep in full force and effect its
corporate existence and rights and its corporate and public utility
franchises, rights, licenses and permits necessary for the conduct of
its business; PROVIDED that the Company may terminate the corporate
existence of any Subsidiary or may terminate or abandon, or permit the
termination or abandonment of, any right, franchise, license or permit
if the termination or abandonment thereof is in the best interests of
the Company or the affected Subsidiary, in the opinion of the Company's
Board of Directors, and such termination or abandonment does not result
in a Default or Event of Default under this Agreement;
(c) maintain and keep, or cause to be maintained and kept, its
properties in good repair, working order and condition, and from time to
time make or cause to be made all necessary and proper repairs,
renewals, replacements and improvements so that the business carried on
in connection therewith may be properly and advantageously conducted at
all times;
(d) comply in all material respects with all applicable laws,
rules and regulations and orders of any governmental authority,
noncompliance with which would have a Material Adverse Effect, except
laws, rules, regulations or orders being contested in good faith; and
(e) maintain insurance with responsible and reputable insurers
covering all such properties and risks, and in such amounts as is
usually carried by companies engaged in similar businesses, similarly
situated and owning similar properties (including without limitation,
the ownership or operation of nuclear generating facilities).
SECTION 6.3 LIMITATION ON DEBT. The Company will not, nor will it
permit any Subsidiary to, incur, assume, guarantee or otherwise become or
remain liable for any Debt other than:
(a) Debt outstanding on the date hereof and described in the
Disclosure Documents and any refinancing thereof, having covenants and
maturities no less favorable to the Company than the Debt being
refinanced, which does not increase the principal amount of the Debt
being refinanced;
(b) Debt described in Section 4.2(i) in an aggregate principal
amount not to exceed $126,000,000;
(c) Debt outstanding on the Effective Date incurred pursuant to
the Loan Agreement;
(d) Guarantees of the Company of the indebtedness of others, as
set forth in Exhibit H, but only to the extent and upon the terms
indicated;
(e) (i) Debt outstanding under this Agreement, the Notes or the
Collateral Bonds and (ii) L/C Obligations; or
(f) Any unsecured Debt not otherwise permitted by this Section 6.3
in an aggregate principal amount not to exceed at any one time the sum
of (i) $5,000,000 plus (ii) an amount equal to 50% of the aggregate
amount of any reductions in the Revolving Credit Commitments made
pursuant to Section 2.6 or 2.11.
SECTION 6.4 INVESTMENTS. Neither the Company nor any Subsidiary
will make or acquire any Investment in any Person other than:
(a) Temporary Cash Investments;
(b) Investments in Persons who are principally engaged, or who
propose principally to engage, in the generation or transmission of
electricity or in water storage development, PROVIDED that the aggregate
amount expended pursuant to this paragraph (b) shall not exceed
$20,000,000 during the term of this Agreement;
(c) Investments in Persons for the purpose of promoting the sale,
installation and maintenance of products that consume electricity,
PROVIDED that the aggregate amount expended pursuant to this paragraph
(c) shall not exceed $5,000,000 during the term of this Agreement; and
(d) Investments in Persons participating in the implementation of
demand side measures pursuant to the rules and regulations now or
hereafter promulgated by the Commission, provided that any such
Investments shall not in the aggregate exceed $2,000,000 principal
amount at any time outstanding to all such Persons or in the aggregate
exceed $1,000,000 principal amount at any time outstanding to any
Person.
SECTION 6.5 NEGATIVE PLEDGE. Neither the Company nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement and reflected in
the Disclosure Documents and not otherwise permitted by this Section
6.5, PROVIDED that the aggregate of all Debt or other obligations
secured by all such Liens does not at any time exceed $500,000;
(b) Liens existing on any property at the time of acquisition
thereof by the Company or any Subsidiary or Liens on property of a
corporation existing at the time such corporation becomes a Subsidiary
and in each case not created in connection with or in contemplation of
such acquisition or event, as the case may be, whether or not assumed;
PROVIDED that in each case such Lien shall apply and attach only to the
property originally subject thereto and improvements constructed
thereon;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the purchase price of such
asset, PROVIDED that such Lien attaches to such asset concurrently with
or within 90 days after the acquisition thereof, PROVIDED FURTHER that
the aggregate amount of all Debt or other obligations secured by all
such Liens permitted by this clause (c) shall not at any time exceed
$2,000,000;
(d) Liens for the sole purpose of extending, renewing or replacing
(or successively extending, renewing or replacing) in whole or in part
the Debt secured by any Lien permitted by clauses (a), (b) and (c) of
this Section 6.5; PROVIDED that the principal amount of Debt secured
thereby shall not exceed the principal amount of Debt so secured at the
time of such extension, renewal or replacement, and that such extension,
renewal or replacement Lien shall be limited to all or a part of the
property which secured the Debt so extended, renewed or replaced (plus
improvements on such property);
(e) Liens for taxes, fees, assessments or governmental charges not
yet due and delinquent or being contested in good faith by appropriate
proceedings and Liens resulting from or incurred with respect to legal
proceedings being contested in good faith by appropriate proceedings;
(f) Liens securing the claims of mechanics, laborers, workmen,
repairmen, materialmen, suppliers, carriers, warehousemen, landlords or
vendors not yet due and delinquent, or being contested in good faith by
appropriate proceedings;
(g) deposits to secure the performance of obligations (other than
obligations for the payment of borrowed money) incurred in the ordinary
course of business;
(h) banker's Liens arising by operation of law and other banker's
possessory Liens arising in the ordinary course of business otherwise
than for the purpose of securing obligations for the payment of borrowed
money (including, without limitation, obligations arising from drafts
accepted representing extensions of credit to or for the benefit of the
Company);
(i) Liens created by the Mortgage securing bonds issued under and
in accordance with the requirements of the Mortgage as such Mortgage may
be amended from time to time, PROVIDED, HOWEVER, no such amendment or
supplement thereof shall without the consent of all of the Banks amend
or supplement the Mortgage (1) to include categories of property or
property interests of the Company not already included pursuant to the
terms of such Mortgage as in effect on the date hereof, or (2) to permit
the Company to withdraw "Deposited Cash" or execute "Bonds" in excess of
75% of the amount by which the actual cost or fair value (whichever is
lower) of "property additions" shall exceed "property retirements", as
set forth in Section 27 of the Mortgage as in effect on the date hereof.
For purposes of this Section 6.5(i) only, "Deposited Cash", "Bonds",
"property additions" and "property retirements" shall have the
respective definition of such terms as defined in the Mortgage on the
date hereof;
(j) Liens incurred in connection with equipment or vehicle
financing leases having an aggregate purchase cost to the lessors not to
exceed $5,000,000;
(k) minor defects and irregularities in the title (including
easements, rights of way, restrictions or other similar nonmonetary
charges) to any real property of the Company or any Subsidiary which
have no material adverse effect on the use or disposition thereof by the
Company or such Subsidiary;
(l) Liens created pursuant to the General and Refunding Mortgage
Indenture;
(m) Liens created by the Pledge Agreement; and
(n) Liens in respect of the Cash collateral referred to in Section
4.1.
SECTION 6.6 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The
Company will not, other than as described below, (i) consolidate with or
merge with or into any other Person or (ii) sell, lease or otherwise transfer
all or a Substantial Part of its assets during the term of this Agreement.
The Company will not permit any Subsidiary to consolidate with, merge with or
into or transfer all or a Substantial Part of its assets to any Person other
than the Company or a wholly owned Subsidiary, PROVIDED that assets having an
aggregate book value of up to $500,000 may be so transferred during the term
of this Agreement.
SECTION 6.7 CONSOLIDATED TOTAL DEBT RATIO. The Company shall not
permit the Consolidated Total Debt Ratio at any time during any period set
forth below to be higher than the ratio set forth opposite such period below:
PERIOD RATIO
---------------------------------- -----------
Effective Date to and
including - 12/31/95 0.77 to 1.0
1/1/96 to and including - 12/31/96 0.75 to 1.0
1/1/97 to and including - 12/31/97 0.72 to 1.0
1/1/98 to and including - 12/31/98 0.68 to 1.0
1/1/99 and thereafter 0.65 to 1.0
SECTION 6.8 CONSOLIDATED FIXED CHARGE RATIO. The Company shall
not permit the Consolidated Fixed Charge Ratio for any period of four
consecutive fiscal quarters of the Company ending during any period set forth
below to be less than the ratio set forth opposite such period below:
PERIOD RATIO
------------------------ -----------
Effective Date to and 1.25 to 1.0
including 9/30/96
Thereafter 1.5 to 1.0
SECTION 6.9 MAINTENANCE OF NET WORTH. The Company shall not
permit Consolidated Net Worth of the Company at any time during any period
set forth below to be less than the amount set forth opposite such period
below:
PERIOD AMOUNT
---------------------------------------- ------------
Effective Date to and including 6/30/96 $ 95,000,000
7/1/96 to and including 6/30/97 $100,000,000
7/1/97 to and including 6/30/98 $105,000,000
7/1/98 and thereafter $110,000,000
SECTION 6.10 LIMITATION ON DIVIDENDS, ETC. (a) During any
fiscal year of the Company commencing after December 31, 1995, the Company
shall not declare or pay any dividend (other than dividends payable solely in
common stock of the Company) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of common stock of the Company or any warrants or options to purchase
any such common stock, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether
in cash or property or in obligations of the Company or any Subsidiary.
Notwithstanding the foregoing, the Company may pay dividends in respect of
its common stock in any fiscal year in an aggregate amount not to exceed 70%
of earnings applicable to common stock for such fiscal year.
(b) The Company shall not issue any Capital Stock (other than
common stock) ("PREFERRED STOCK") after the Effective Date except for
Preferred Stock the proceeds of which are used to refinance other Preferred
Stock or Debt having covenants and maturities no less favorable to the
Company than the Preferred Stock or Debt being refinanced.
SECTION 6.11 STATUS. Promptly upon request by the Administrative
Agent or any Bank, the Company shall obtain from S&P in writing the Company's
long-term senior secured debt rating and disclose such rating to the
Administrative Agent or such Bank, as the case may be.
SECTION 6.12 AMENDMENTS TO SECOND MORTGAGE BONDS, ETC. The
Company shall not amend, supplement or otherwise modify, or consent to any
amendment, supplement or other modification to, (a) the General and Refunding
Mortgage Indenture, the Second Mortgage Bonds, the FAME Loan Agreement or any
agreement entered into by the Company in connection therewith (provided that
the foregoing shall not prohibit (i) the issuance of any supplemental
indenture in respect of the General and Refunding Mortgage Indenture for the
sole purpose of providing for the issuance of refinancing Debt expressly
permitted by Section 6.3 or (ii) modifications to the General and Refunding
Mortgage Indenture made for the sole purpose of perfecting under applicable
law the Liens contemplated thereby) or (b) the terms of any Preferred Stock.
SECTION 6.13 INTEREST RATE PROTECTION. Within 120 days after the
Effective Date, the Company shall enter into an Interest Rate Protection
Agreement in respect of the entire principal amount of the Term Loans
effective through June 30, 2000 which Interest Rate Protection Agreement
shall have terms and conditions reasonably satisfactory to the Administrative
Agent (and in any event, in the case of a cap, shall protect the Company
against any increase in the eurodollar rate by more than 1-1/2% above the
eurodollar rate in effect on the Effective Date).
SECTION 6.14 LIMITATION ON OPTIONAL PREPAYMENTS OF CERTAIN DEBT.
The Company shall not make any optional payment or prepayment on or
redemption, purchase or defeasance of (a) any Second Mortgage Bond, (b) any
Debt under the FAME Loan Agreement or (c) any Preferred Stock.
SECTION 6.15 RIGHTS OF INSPECTION. The Company shall permit the
Administrative Agent at all reasonable times and upon reasonable notice, to
examine the books and records of the Company with respect the Company's
business generally, and the Company shall furnish the Administrative Agent
with such information, statements and certificates as may reasonably be
required from time to time.
SECTION 6.16 MATTERS OF ENVIRONMENTAL CONCERN. The Company
covenants that (a) except in compliance with applicable environmental laws,
or, if known or if it becomes known to the Company, as disclosed pursuant to
the Exchange Act, it has not discharged, dumped, installed, stored, used,
treated, transported, disposed or maintained, and shall neither discharge,
dump, install, store, use, treat, transport, dispose or maintain toxic,
hazardous, or radioactive substances, materials or wastes, including, without
limitation, all of the following; (i) asbestos in any form; (ii) urea
formaldehyde foam insulation, (iii) transformers or other equipment which
contain dielectric fluid containing any level or polychlorinated biphenyls or
(iv) any other chemical, material or substance which is prohibited, limited
or regulated by any federal, state, county, regional, local or other
governmental authority or which, even if not so regulated, to the knowledge
of the Company poses substantial hazard to health and safety (all of which
are referred to collectively herein as ("HAZARDOUS SUBSTANCES"), except such
non-compliance as would not have a material adverse effect on the Company or
its financial condition, and (b) the Company is not the subject of any
existing, pending or threatened investigation or inquiry by, or any remedial
order or obligation issued by or at the behest of, any governmental authority
under any law, rule or regulation pertaining to health or the environment
which would have a material adverse effect on the Company or its financial
condition except (i) during any period during
which the Company at its own expense and in its name shall be in good faith
contesting its obligation to company therewith or (ii) as described in
filings made pursuant to the Exchange Act.
ARTICLE VII
DEFAULTS
SECTION 7.1 EVENTS OF DEFAULT. If one or more of the following
events ("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Company shall fail to pay when due any principal of or
interest on any Loan, any commitment fee or any Reimbursement Obligation;
(b) the Company shall fail to observe or perform any covenant
contained in Section 6.1(e), any of Sections 6.3 through 6.12,
inclusive, Section 6.14 or Section 3 or 4 of the Pledge Agreement;
(c) the Company shall fail to observe or perform any covenant or
agreement contained in this Agreement or any other Loan Document (other
than those covered by clauses (a) or (b) above) for 10 days after
written notice thereof has been given to the Company by the
Administrative Agent or the Majority Banks;
(d) any representation, warranty, certification or statement made
by the Company in this Agreement or in the Pledge Agreement or in any
certificate, financial statement or other document delivered pursuant to
this Agreement shall prove to have been materially incorrect when made;
(e) the Company or any Subsidiary shall fail to make any payment
in respect of any Debt (other than the Loans) when due or within any
applicable grace period;
(f) the Company or any Subsidiary shall fail to observe or perform
any covenant or agreement contained in any agreement or instrument
relating to any of its Debt within any applicable grace period if the
effect of such failure is to accelerate, or to permit the holder of such
Debt or any other Person to accelerate, the maturity of such Debt;
(g) an involuntary case or other proceeding shall be commenced
against the Company or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property,
and such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 60 days; or an order for relief shall be
entered against the Company or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(h) the Company or any Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take
any corporate action to authorize any of the foregoing;
(i) there shall be commenced against the Company or any of its
Subsidiaries any case or other proceeding seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal for a period of 60 days;
(j) the Company or any Subsidiary or a Commonly Controlled Entity
shall fail to pay when due an amount or amounts aggregating in excess of
$100,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
Plans having aggregate Unfunded Vested Liabilities in excess of $500,000
shall be filed under Title IV of ERISA by the Company, any Subsidiary, a
Commonly Controlled Entity, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to administer
any such Plan or Plans or a proceeding shall be instituted by a
fiduciary of any such Plan or Plans to enforce Section 515 of ERISA and
such proceeding shall not have been dismissed within 30 days thereafter;
or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
(k) a final judgment or order (from which all appeals have been
taken and determined or as to which all time for the taking of appeals
has lapsed) for the payment of money in excess of $500,000 shall be
rendered against the Company or any Subsidiary and such judgment or
order shall continue unsatisfied and in effect for a period of 60 days;
or
(l) (i) a judgment creditor shall obtain possession of any
material portion of the mortgaged property (the "Mortgaged Property")
referred to in the Mortgage by any means, including, without limitation,
levy, distraint, replevin or self-help, (ii) any foreclosure or other
remedial action in respect of or affecting the Mortgaged Property shall
be commenced by or on behalf of the holders of the Second Mortgage Bonds
or the trustee under the General and Refunding Mortgage Indenture, (iii)
any material portion of the Mortgaged Property shall be taken by eminent
domain or condemnation, (iv) the Mortgage shall cease to be in full
force and effect or the Company shall disavow its obligations thereunder
or shall contest the validity or enforceability thereof, (v) the trustee
under the Mortgage (the "First Mortgage Trustee") shall cease, in
respect of any material portion of the Mortgaged Property, to have a
valid and perfected first priority security interest therein, (vi) the
security interest of the First Mortgage Trustee in any material portion
of the Mortgaged Property shall otherwise become impaired or
unenforceable, or (vii) any provision of the Mortgage, the Supplemental
Indenture or the Collateral Bonds shall be amended, supplemented, waived
or otherwise modified in any respect except to the extent expressly
permitted by the Pledge Agreement;
then, and in every such event and at any time thereafter during the
continuance of any such event, the Administrative Agent shall, if requested
by the Majority Banks, by notice to the Company terminate the Commitments and
they shall thereupon be terminated, and the Administrative Agent shall, if
requested by the Majority Banks, by notice to the Company declare the Loans
(together with accrued interest thereon) and all other amounts outstanding
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder), and the
Loans and such amounts shall thereupon become, due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company; PROVIDED that in the case of the occurrence of
any event described in the foregoing clauses (g) and (h) with respect to the
Company, the Loans and all amounts outstanding hereunder (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall become due and payable forthwith without the
requirement of any such notice, and without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Company shall at such time deposit in a cash collateral
account opened by the Administrative Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. Amounts held in
such cash collateral account shall be applied by the Administrative Agent to
the payment of drafts drawn under such Letters of Credit, and the unused
portion thereof after all such Letters of Credit shall have expired or been
fully drawn upon, if any, shall be applied to repay other obligations of the
Company owing to the Administrative Agent and the Banks hereunder and under
the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Company owing to the
Administrative Agent and the Banks hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Company (or such other Person as
may be lawfully entitled thereto).
SECTION 7.2 NOTICE OF EVENT OF DEFAULT. The Administrative Agent
shall give notice to the Company under Section 7.1(c) promptly upon being
requested to do so by the Majority Banks and shall thereupon notify all
holders of Notes thereof.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.1 APPOINTMENT. Each Bank who may, from time
to time, be party to this Agreement, hereby irrevocably designates and
appoints the Administrative Agent as agent of such Bank under this Agreement
and the other Loan Documents, and each such Bank hereby irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement or any other Loan Document, the
Administrative Agent shall have not any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care.
SECTION 8.3 EXCULPATORY PROVISIONS. Neither the Administrative
Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates, shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except for its or such Person's
own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Banks for any recitals, statements, representations or
warranties made by the Company or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Documents or for any failure of the Company
to perform its obligations hereunder or thereunder. Neither the
Administrative Agent nor any Co-Agent shall be under any obligation to any
Bank to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the Company.
SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying,
upon any Note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including without
limitation, counsel to the Company), independent accountants and other
experts selected by them. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with them. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Majority
Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under the Loan Documents in accordance with a
request of the Majority Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Banks and all
future holders of the Notes.
SECTION 8.5 NOTICE OF EVENT OF DEFAULT. The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Event of Default hereunder unless it receives notice from a Bank or the
Company referring to this Agreement, describing such Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, it shall give notice thereof to
the Banks. The Administrative Agent shall take such action with respect to
such Event of Default as shall be reasonably directed by the Majority Banks.
SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS.
Each Bank expressly acknowledges that neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of the Company, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Bank. Each Bank represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Company and made its own decision to
make its loans hereunder and enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports
and other documents expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property, financial and
other condition or creditworthiness of the Company which may come into the
possession of such Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION. The Banks agree to indemnify the
Administrative Agent, in its capacity as administrative agent (to the extent
not reimbursed by the Company and without limiting the obligation of the
Company to do so), ratably according to the respective amounts of their
Revolving Credit Commitments (or, if the Revolving Credit Commitments have
been terminated, their Aggregate Outstanding Revolving Extensions of Credit)
and Term Loans outstanding on the date on which indemnification is sought
(or, if indemnification is sought after the date on which the Loans shall
have been paid in full, ratably in accordance with the foregoing amounts
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement, or any
documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted by the Administrative
Agent under or in connection with any of the foregoing; PROVIDED that no Bank
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Administrative Agent's
gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.
SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Company as though
such Administrative Agent were not the Administrative Agent hereunder. With
respect to its loans made or renewed by it and any Note issued to it and with
respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though it were not the
Administrative Agent, and the terms "Bank" and "Banks" shall include the
Administrative Agent in its individual capacity.
SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign upon 10 days' notice to the Banks. If the Administrative
Agent shall resign, then the Majority Banks shall appoint from among the
Banks a successor administrative agent for the Banks which successor agent or
administrative agent shall be approved by the Company (which approval shall
not be unreasonably withheld), whereupon such successor administrative agent
shall succeed to the rights, powers and duties of the Administrative Agent
and the term "Administrative Agent" shall mean such successor administrative
agent effective upon the appointment and approval of such successor
administrative agent, whereupon the former Administrative Agent's rights,
powers and duties hereunder shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to this Agreement, or any holders of the Notes. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, as the
case may be, the provisions of this Article VIII shall inure to the successor
administrative agent's benefit as to any actions taken or omitted to be taken
by it while under this Agreement.
SECTION 8.10 CO-AGENTS. No Co-Agent in its capacity as such shall
have any rights, duties or responsibilities hereunder, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against any Co-Agent in its capacity as such.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES. All notices, requests and other
communications provided for herein shall be in writing (including bank wire,
telex, telegram, telecopy or similar writing) and shall be given:
(a) if to any party hereto, to it at its address or telex or
telecopy number set forth on Schedule II hereof; and
(b) if to any holder of a Note, other than a Bank, to it at the
address or telex or telecopy number of the original payee thereof or at
the address or telex or telecopy number or any subsequent holder if
notice of the transfer of such Note and the name and the address or
telex or telecopy number of such subsequent holder shall have been given
to the Administrative Agent and the Company;
or in any of the foregoing cases at such other address or telex or telecopy
number as such party or subsequent holder may hereafter specify for the
purpose by notice to the Administrative Agent and the Company. Each such
notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by mail, 72
hours after such letter, is deposited in the mails with first class postage
prepaid, addressed as aforesaid, (iii) if given by telecopy, when such
telecopy is received or (iv) if given by any other means, when delivered at
the address specified in this Section; PROVIDED that notices to the
Administrative Agent or any Bank under Article II or III shall not be
effective until received.
SECTION 9.2 NO WAIVERS; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Administrative Agent
or any Bank, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
SECTION 9.3 EXPENSES; DOCUMENTARY TAXES. The Company agrees (a)
to pay or reimburse the Administrative Agent for all of its out-of-pocket
costs and expenses incurred in connection with the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith, and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, the fees and disbursements
of counsel to the Administrative Agent, (b) to pay or reimburse each Bank and
the Administrative Agent for all their costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, fees and disbursements of counsel to the Administrative
Agent and to the several Banks, (c) to pay, indemnify, and to hold each Bank
and the Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect
of, this Agreement, the other Loan Documents and any such other documents,
and (d) to pay, indemnify, and hold each Bank and the Administrative Agent
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents (all the foregoing in this
clause (d), collectively, the "indemnified liabilities"), PROVIDED, that the
Company shall have no obligation hereunder to the Administrative Agent or any
Bank with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Administrative Agent or such Bank, as
the case may be. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
SECTION 9.4 ADJUSTMENTS. Except to the extent that this Agreement
specifies that optional or mandatory prepayments or repayments are to be
allocated to the Revolving Credit Loans, Swing Line Loans or Term Loans, as
the case may be, if any Bank (a "BENEFITTED BANK") shall at any time receive
any payment of all or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-
off, pursuant to events or proceedings of the nature referred to in clause
(g) or (h) of Section 7.1, or otherwise) in a greater proportion than any
such payment to and collateral received by any other Bank, if any, in respect
of such other Bank's Loans, or interest thereon, such benefitted Bank shall
purchase for cash from the other Banks such portion of each such other Bank's
Loan, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Bank to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks; PROVIDED, HOWEVER, that if all or
any portion of such excess payment or benefits is thereafter recovered from
such benefitted Bank, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. The Company agrees that each Bank so purchasing a portion of
another Bank's Loan may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if
such Bank were the direct holder of such portion.
SECTION 9.5 AMENDMENTS AND WAIVERS. Any provision of this
Agreement, the Pledge Agreement or the Notes may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Company
and the Majority Banks (and, if the rights or duties of the Administrative
Agent are affected thereby, by the Administrative Agent); PROVIDED that no
such amendment or waiver shall, unless signed by all the Banks, (a)(i)
increase or extend the Commitment of any Bank, (ii) reduce the principal of
or rate of interest on the Loans or reduce any commitment fees or Letter of
Credit commissions hereunder or (iii) postpone the date fixed for any payment
of principal of or interest on the Loans or any commitment fees or Letter of
Credit commissions hereunder (it being understood that amendments or waivers
of the provisions of Section 2.11(b) shall not be subject to the requirements
of this proviso), (b) change the percentage of the Commitments and the
extensions of credit which shall be required for the Banks to take any action
hereunder, (c) amend or modify the provisions of this Section or (d) release
any substantial portion of the Collateral (as defined in the Pledge
Agreement) except (i) to the extent expressly contemplated by the
Supplemental Indenture and the Pledge Agreement and (ii) any release of
Collateral Bonds to the extent the aggregate principal amount thereof exceeds
the sum of the aggregate Revolving Credit Commitments and the outstanding
principal amount of the Term Loans.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
BANKS. (a) This Agreement shall be binding upon and inure to the benefit of
the Company, the Banks, the Administrative Agent, all future holders of the
Notes, and their respective successors and assigns, except that the Company
may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or
other entities ("PARTICIPANTS") participating interests in any loan made
hereunder owing to such Bank, any Note held by such Bank, any Commitment of
such Bank or any other interest of such Bank hereunder. In the event of any
such sale by a Bank of participating interests to a Participant, such Bank's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any such Note for
all purposes under this Agreement and the Company and the Administrative
Agent shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement. The Company
agrees that if amount outstanding under this Agreement and the Notes are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed
to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as a Bank
under this Agreement or any Note; PROVIDED, that such right of setoff shall
be subject to the obligation of such Participant to share with the Banks, and
the Banks agree to share with such Participant, as provided in Section 9.4.
The Company also agrees that each Participant shall be entitled to the
benefits of Sections 2.17, 2.18, 2.19 and 9.3 with respect to its
participation in the Commitments and the Loans outstanding hereunder from
time to time; PROVIDED that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Bank would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant had no such transfer
occurred.
(c) Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to any Bank or any affiliate
thereof, and, with the consent of the Company and the Administrative Agent
(which in each case shall not be unreasonably withheld) to one or more
additional banks or financial institutions ("PURCHASING BANKS") all or any
part of its rights and obligations under this Agreement and the Notes,
pursuant to an Assignment and Acceptance Agreement, executed by such
Purchasing Bank, such transferor Bank (and, in the case of a Purchasing Bank
that is not then a Bank or an affiliate thereof, by the Company and the
Administrative Agent), and delivered to the Administrative Agent for its
acceptance and recording in the Register; PROVIDED that, except in the case
of an assignment of all of a Bank's interest under this Agreement and the
Notes, after giving effect to any such assignment, each of the assigning Bank
and the Purchasing Bank (together with any Bank which is an affiliate of such
assigning Bank or such Purchasing Bank, as the case may be) shall have Loans
and/or Commitments aggregating not less than $5,000,000. Any such assignment
need not be ratable as between the Revolving Credit Commitments and/or
Revolving Credit Loans and the Term Loan Commitments and/or Term Loans of the
assigning Bank. Upon such execution, delivery, acceptance and recording,
from and after the Transfer Effective Date determined pursuant to such
Assignment and Acceptance Agreement, (x) the Purchasing Bank thereunder shall
be a party hereto and, to the extent provided in such Assignment and
Acceptance Agreement, have the rights and obligations of a Bank hereunder
with a Commitment and/or Loans as set forth therein, and (y) the transferor
Bank thereunder shall, to the extent provided in such Assignment and
Acceptance Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance Agreement covering all or
the remaining portion of a transferor Bank's rights and obligations under
this Agreement, such transferor Bank shall cease to be a party hereto). Such
an Assignment and Acceptance Agreement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank and the resulting adjustments arising from
the purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Agreement and the Notes. On
or prior to the Transfer Effective Date determined pursuant to such
Assignment and Acceptance Agreement, the Company, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the
surrendered Revolving Credit Note and/or Term Note a new Revolving Credit
Note and/or Term Note, as the case may be, to the order of such Purchasing
Bank in an amount equal to the Revolving Credit Commitment and/or Term Loans
assumed by it pursuant to such an Assignment and Acceptance Agreement and, if
the transferor Bank has retained a Revolving Credit Commitment and/or Term
Loans hereunder, a new Note or Notes to the order of the Purchasing Bank in
an amount equal to the Revolving Credit Commitment and/or Term Loans retained
by it hereunder. Such new Notes shall be in the form of the Notes replaced
thereby. The Notes surrendered by the transferor Bank shall be returned by
the Administrative Agent to the Company marked "cancelled."
(d) The Administrative Agent shall maintain at its address
referred to in Schedule II hereto a copy of each Assignment and Acceptance
Agreement delivered to it and a register (the "REGISTER") for the recordation
of the names and addresses of the Banks and the Commitment of, and principal
amount of the Loans owing to, each Bank from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Company, the Administrative Agent and the Banks may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein
for all purposes of this Agreement. The Register shall be available for
inspection by the Company or any Bank at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment Acceptance Agreement
executed by a transferor Bank and a Purchasing Bank (and, in the case of a
Purchasing Bank that is not then a Bank or an affiliate thereof, by the
Company and the Administrative Agent) together with payment by or on behalf
of the transferor Bank or the Purchasing Bank (as agreed between them) to the
Administrative Agent of a registration and processing fee of $2,500, the
Administrative Agent shall (i) promptly accept such an Assignment and
Acceptance Agreement (ii) on the Transfer Effective Date determined pursuant
thereto record the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and the Company.
(f) The Company authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "TRANSFEREE") and any prospective
Transferee any and all financial information in such Bank's possession
concerning the Company and its affiliates which has been delivered to such
Bank by or on behalf of the Company pursuant to this Agreement or which has
been delivered to such Bank by or on behalf of the Company in connection with
such Bank's credit evaluation of the Company and its affiliates prior to
becoming a party to this Agreement.
(g) If, pursuant to this Section, any interest in this Agreement
or any Note is transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any State thereof,
the transferor Bank shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Bank (for
the benefit of the transferor Bank, the Administrative Agent and the Company)
that under applicable law and treaties no taxes will be required to be
withheld by the Administrative Agent, the Company or the transferor Bank with
respect to any payments to be made to such Transferee in respect of the
Loans, (ii) to furnish to the transferor Bank (and, in the case of any
Purchasing Bank registered in the Register, the Administrative Agent and the
Company) either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein such Transferee claims entitlement to
complete exemption from U.S. federal withholding tax on all interest payments
hereunder) and (iii) to agree (for the benefit of the transferor Bank, the
Administrative Agent and the Company) to provide the transferor Bank (and, in
the case of any Purchasing Bank registered in the Register, the
Administrative Agent and the Company) a new Form 4224 or Form 1001 upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee, and to comply from
time to time with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Bank of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
ARTICLE X
SECTION 10.1 COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall be effective when signed by the
Administrative Agent and the Company and the Administrative Agent has
received telecopy or telephonic confirmation of the signing of this Agreement
from each of the Banks. A set of the copies of this Agreement signed by all
the parties hereto shall be lodged with the Company and the Administrative
Agent.
ARTICLE XI
SECTION 11.1 SECTION HEADINGS. The Section headings in this
Agreement are inserted for convenience only and shall not be part of this
instrument.
ARTICLE XII
SECTION 12.1 GOVERNING LAW. This Agreement and the rights and
obligations of the parties under this Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New
York.
ARTICLE XIII
SECTION 13.1 SUBMISSION TO JURISDICTION; WAIVERS. (a) The Company
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Loan Document, or for
recognition and enforcement of any judgment in respect thereof, to the
nonexclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Company at its address set forth in Schedule II or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
(b) The Company, the Administrative Agent and each Bank hereby
irrevocably and unconditionally waive trial by jury in any legal action or
proceeding relating to this Agreement or any other Loan Document and for any
counterclaim therein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY
By:________________________________
Title:
CHEMICAL BANK, as Administrative Agent and as a
Bank
By:________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By:________________________________
Title:
THE BANK OF NEW YORK
By:________________________________
Title:
FLEET BANK OF MAINE
By:________________________________
Title:
KEY BANK
By:________________________________
Title:
SHAWMUT BANK, N.A.
By:________________________________
Title:
TORONTO-DOMINION BANK
By:________________________________
Title:
Total
Banks Allocation Revolver 47.83% Term Loan 52.17%
- ---------------- ------------ ------------- -------------
Chemical Bank $21,000,000 10,043,478.27 10,956,521.73
Bank of Boston 18,000,000 8,608,695.65 9,391,304.35
Fleet Bank 18,000,000 8,608,695.65 9,391,304.35
Toronto-Dominion 18,000,000 8,608,695.65 9,391,304.35
Shawmut Bank 15,000,000 7,173,913.04 7,826,086.96
Bank of New York 15,000,000 7,173,913.04 7,826,086.96
Key Bank 10,000,000 4,782,608.70 5,217,391.30
------------ ------------ ------------
$115,000,000 55,000,000 $60,000,000
SCHEDULE II
ADDRESS SCHEDULE
Bangor Hydro-Electric Company
33 State Street
Bangor, Maine 04401
Attention: Robert Weiser
Telecopy: (207) 990-6990
Chemical Bank, as Administrative Agent
and as a Bank
Domestic and Eurodollar
Lending Office:
270 Park Avenue, 8th Floor
New York, New York 10017
Attention: Utilities Group
Telecopy: (212) 270-2555
The Bank of New York
Domestic and Eurodollar
Lending Office:
One Wall Street, 19th Floor
New York, New York 10286
Attention: John Hall
Telecopy: (212) 635-7923
The First National Bank of Boston
Domestic and Eurodollar
Lending Office:
Energy & Utilities Division
100 Federal Street - 15th Floor
Boston, MA 02110
Attention: Michael Kane
Telecopy: (617) 434-3652
Fleet Bank of Maine
Domestic and Eurodollar
Lending Office:
80 Exchange Street
Bangor, Maine 04401
Attention: Chuck Osgood
Telecopy: (207) 941-6023
Key Bank
Domestic and Eurodollar
Lending Office:
One Monument Square, 4th Floor
Portland, Maine 04104
Attention: Richard McNaughton
Telecopy: (207) 776-7624
Shawmut Bank, N.A.
Domestic and Eurodollar
Lending Office:
One Federal Street
Boston, Massachusetts 02211
Attention: John Rafferty
Telecopy: (617) 292-2619
The Toronto-Dominion Bank
Domestic and Eurodollar
Lending Office:
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Neva Nesbitt
Telecopy: (713) 951-9921
` Exhibit A-1 to the
Credit Agreement
------------------
FORM OF REVOLVING CREDIT NOTE
$______________ New York, New York
June ___, 1995
FOR VALUE RECEIVED, the undersigned, Bangor Hydro-Electric Company, a
Maine corporation (the "COMPANY"), hereby unconditionally promises to pay to
the order of _______________ (the "BANK") at the office of Chemical Bank,
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in immediately available funds, on the
Termination Date the principal amount of (a) ____________ DOLLARS ($_______),
or, if less, (b) the aggregate unpaid principal amount of all Revolving
Credit Loans made by the Bank to the Company pursuant to Section 2.1 of the
Credit Agreement, as hereinafter defined. The Company further agrees to pay
interest in like money at such office on the unpaid principal amount hereof
from time to time outstanding at the rates and on the dates specified in
Section 2.13 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof the date and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each conversion of
all or a portion thereof and, in the case of Eurodollar Loans, the length of
each Interest Period with respect thereto. Each such endorsement shall
constitute PRIMA FACIE evidence of the accuracy of the information endorsed.
The failure to make any such endorsement or any error in any such endorsement
shall not affect the obligations of the Company in respect of the Revolving
Credit Loans.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of June ___, 1995 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
Company, the Bank, the other banks and financial institutions from time to
time parties thereto and Chemical Bank, as administrative agent, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to
prepayment in whole or in part as provided in the Credit Agreement. This
Note is secured as provided in the Loan Documents. Reference is hereby made
to the Loan Documents for a description of the properties and assets in which
a security interest has been granted, the nature and extent of the security,
the terms and conditions upon which the security interests were granted and
the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit
Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
BANGOR HYDRO-ELECTRIC COMPANY
By:_______________________________
Name:
Title:
Schedule A
To Revolving Credit Note
------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
|---------------------------------------------------------------------------|
| |AMOUNT OF| AMOUNT | AMOUNT OF | AMOUNT OF | UNPAID | |
|DATE|BASE RATE| CONVERTED | PRINCIPAL | BASE RATE | PRINCIPAL | NOTATION|
| | LOANS | TO BASE |OF BASE RATE| LOANS CON- | BALANCE OF| MADE BY |
| | | RATE LOANS |LOANS REPAID| VERTED TO | BASE RATE | |
| | | | | EURODOLLAR | LOANS | |
| | | | | LOANS | | |
|----|---------|------------|------------|------------|-----------|---------|
| | | | | | | |
|____|_________|____________|____________|____________|___________|_________|
| | | | | | | |
| | | | | | | |
|____|_________|____________|____________|____________|___________|_________|
| | | | | | | |
| | | | | | | |
|____|_________|____________|____________|____________|___________|_________|
Schedule B
To Revolving Credit Note
------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
|---------------------------------------------------------------------------|
| |AMOUNT OF |AMOUNT |INTEREST |AMOUNT OF|AMOUNT OF |UNPAID |NOTATION|
|DATE|EURODOLLAR|CONVERTED| PERIOD |PRINCIPAL|EURODOLLAR|PRINCIPAL|MADE BY |
| | LOANS |TO EURO- |AND LIBO |OF EURO- |LOANS CON-|BALANCE | |
| | | DOLLAR |RATE WITH| DOLLAR |VERTED TO |OF EURO- | |
| | | LOANS |RESPECT | LOANS |BASE RATE |DOLLAR | |
| | | | THERETO | REPAID | LOANS | LOANS | |
|----|----------|---------|---------|---------|----------|---------|--------|
| | | | | | | | |
|____|__________|_________|_________|_________|__________|_________|________|
| | | | | | | | |
| | | | | | | | |
|____|__________|_________|_________|_________|__________|_________|________|
| | | | | | | | |
| | | | | | | | |
|____|__________|_________|_________|_________|__________|_________|________|
Exhibit A-2 to the
CREDIT AGREEMENT
------------------
FORM OF SWING LINE NOTE
$_____________ New York, New York
June ___, 1995
FOR VALUE RECEIVED, the undersigned, Bangor Hydro-Electric Company, a
Maine corporation (the "COMPANY"), hereby unconditionally promises to pay to
the order of _____________ (the "BANK") at the office of Chemical Bank,
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in immediately available funds, on the
Termination Date the principal amount of (a) ____________ DOLLARS
($________), or, if less, (b) the aggregate unpaid principal amount of all
Swing Line Loans made by the Bank to the Company pursuant to Section 2.4 of
the Credit Agreement, as hereinafter defined. The Company further agrees to
pay interest in like money at such office on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified
in Section 2.13 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof the date and amount of each
Swing Line Loan made pursuant to the Credit Agreement and the date and amount
of each payment or prepayment of principal thereof. Each such endorsement
shall constitute PRIMA FACIE evidence of the accuracy of the information
endorsed. The failure to make any such endorsement or any error in any such
endorsement shall not affect the obligations of the Company in respect of the
Swing Line Loans.
This Note (a) is the Swing Line Note referred to in the Credit Agreement
dated as of June ___, 1995 (as amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), among the Company, the Bank, the
other banks and financial institutions from time to time parties thereto and
Chemical Bank, as administrative agent, (b) is subject to the provisions of
the Credit Agreement and (c) is subject to prepayment in whole or in part as
provided in the Credit Agreement. This Note is secured as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has
been granted, the nature and extent of the security, the terms and conditions
upon which the security interests were granted and the rights of the holder
of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit
Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
BANGOR HYDRO-ELECTRIC COMPANY
By: _________________________________
Name:
Title:
Schedule A
To Swing Line Note
------------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
|---------------------------------------------------------------------------|
| |AMOUNT OF BASE| AMOUNT OF | UNPAID PRINCIPAL | NOTATION MADE BY |
| DATE | RATE LOANS | PRINCIPAL | BALANCE OF BASE | |
| | | OF BASE RATE | RATE LOANS | |
| | | LOANS REPAID | | |
|-------|--------------|--------------|------------------|------------------|
| | | | | |
|_______|______________|______________|__________________|__________________|
| | | | | |
| | | | | |
|_______|______________|______________|__________________|__________________|
| | | | | |
| | | | | |
|_______|______________|______________|__________________|__________________|
Exhibit B to the
Credit Agreement
----------------
FORM OF TERM NOTE
$_________ New York, New York
June ___, 1995
FOR VALUE RECEIVED, the undersigned, Bangor Hydro-Electric Company, a
Maine corporation (the "COMPANY"), hereby unconditionally promises to pay to
the order of _____________ (the "BANK") at the office of Chemical Bank,
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in immediately available funds, the principal
amount of _______________ DOLLARS ($_________), or, if less, the unpaid
principal amount of the Term Loan made by the Bank pursuant to Section 2.7 of
the Credit Agreement, as hereinafter defined. The principal amount hereof
shall be paid in the amounts and on the dates specified in Section 2.11 of
such Credit Agreement. The Company further agrees to pay interest in like
money at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in Section 2.13 of such
Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof the date and amount of the
Term Loan and the date and amount of each payment or prepayment of principal
with respect thereto, each conversion of all or a portion thereof, and in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute PRIMA FACIE evidence of the
accuracy of the information endorsed. The failure to make any such
endorsement or any error in any such endorsement shall not affect the
obligations of the Company in respect of such Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit
Agreement dated as of June ___, 1995 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among the Company, the
Bank, the other banks and financial institutions from time to time parties
thereto and Chemical Bank, as administrative agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to prepayment in whole
or in part as provided in the Credit Agreement. This Note is secured as
provided in the Loan Documents. Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security the terms
and conditions upon which the security interests were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit
Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
BANGOR HYDRO-ELECTRIC COMPANY
By:
__________________________________
Name:
Title:
Schedule A
To Term Loan Note
------------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
|---------------------------------------------------------------------------|
| |AMOUNT OF| AMOUNT | AMOUNT OF | AMOUNT OF | UNPAID | |
|DATE|BASE RATE| CONVERTED | PRINCIPAL | BASE RATE | PRINCIPAL | NOTATION|
| | LOANS | TO BASE |OF BASE RATE| LOANS CON- | BALANCE OF| MADE BY |
| | | RATE LOANS |LOANS REPAID| VERTED TO | BASE RATE | |
| | | | | EURODOLLAR | LOANS | |
| | | | | LOANS | | |
|----|---------|------------|------------|------------|-----------|---------|
| | | | | | | |
|____|_________|____________|____________|____________|___________|_________|
| | | | | | | |
| | | | | | | |
|____|_________|____________|____________|____________|___________|_________|
| | | | | | | |
| | | | | | | |
|____|_________|____________|____________|____________|___________|_________|
Schedule B
To Term Loan Note
------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
|---------------------------------------------------------------------------|
| |AMOUNT OF |AMOUNT |INTEREST |AMOUNT OF|AMOUNT OF |UNPAID |NOTATION|
|DATE|EURODOLLAR|CONVERTED| PERIOD |PRINCIPAL|EURODOLLAR|PRINCIPAL|MADE BY |
| | LOANS |TO EURO- |AND LIBO |OF EURO- |LOANS CON-|BALANCE | |
| | | DOLLAR |RATE WITH| DOLLAR |VERTED TO |OF EURO- | |
| | | LOANS |RESPECT | LOANS |BASE RATE |DOLLAR | |
| | | | THERETO | REPAID | LOANS | LOANS | |
|----|----------|---------|---------|---------|----------|---------|--------|
| | | | | | | | |
|____|__________|_________|_________|_________|__________|_________|________|
| | | | | | | | |
| | | | | | | | |
|____|__________|_________|_________|_________|__________|_________|________|
| | | | | | | | |
| | | | | | | | |
|____|__________|_________|_________|_________|__________|_________|________|
Exhibit C to the
Credit Agreement
----------------
FORM OF CLOSING CERTIFICATE
Pursuant to Sections 4.2(e), (f), (g) and (h) of the Credit
Agreement, dated as of June 30, 1995 (the "CREDIT AGREEMENT") (unless
otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement), among
Bangor-Hydro-Electric Company, a Maine corporation (the "COMPANY"), the
several Banks from time to time parties thereto, Chemical Bank, as
Administrative Agent, and Fleet Bank of Maine and The First National Bank of
Boston, as Co-Agents, the undersigned ____________ of the Company hereby
certifies as follows:
1. The representations and warranties of the Company
contained in any Loan Document or in any certificate, document or
financial or other statement furnished by or on behalf of the Company
pursuant to or in connection with any Loan Document are true and correct
on and as of the date hereof with the same effect as if made on the date
hereof;
2. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to any
extensions of credit to occur on the date hereof;
3. No more than $8,000,000 in Cash (excluding (i) Temporary
Cash Investments in an aggregate amount not to exceed $22,000,000
maintained pursuant to the documentation governing the FAME Loan
Agreement and (ii) cash securing the letter of credit issued by Shawmut
Bank, N.A. referred to in Section 4.3 of the Credit Agreement) will be
retained by the Company after three Business Days from the Borrowing
Date;
4. Frederick Samp is and at all times since
_____________________ 19__, has been the duly elected and qualified
Clerk of the Company and the signature set forth on the signature line
for such officer below is such officer's true and genuine signature;
and the undersigned Clerk of the Company hereby certifies as follows:
5. There are no liquidation or dissolution proceedings
pending or to my knowledge threatened against the Company, nor to my
knowledge has any other event occurred affecting or threatening the
corporate existence of the Company;
6. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maine;
7. Attached hereto as Exhibit A is a complete and correct
copy of resolutions duly adopted by the Board of Directors (or a duly
authorized committee thereof) of the Company on _________, 19__; such
resolutions have not in any way been amended, modified, revoked or
rescinded and have been in full force and effect since their adoption to
and including the date hereof and are now in full force and effect; such
resolutions are the only corporate proceedings of the Company now in
force relating to or affecting the matters referred to therein;
8. Attached hereto as Exhibit B is a complete and correct
copy of the by-laws of the Company as in effect at all times since
_________________, 19__ to and including the date hereof; and attached
hereto as Exhibit C is a true and complete copy of the certificate of
incorporation of the Company as in effect at all times since
___________________, 19__ to and including the date hereof;
8. Attached hereto as Exhibit D is a complete and correct
copy of the order of the Commission described in Section 5.6 of the
Credit Agreement; and
9. The following persons are now duly elected and qualified
officers of the Company holding the offices indicated next to their
respective names below, and such officers have held such offices with
the Company at all times since ________________, 19__ to and including
the date hereof, and the signatures appearing opposite their respective
names below are the true and genuine signatures of such officers, and
each of such officers is duly authorized to execute and deliver on
behalf of the Company each Loan Document to which it is a party and any
certificate or other document to be delivered by the Company pursuant to
such Loan Documents:
Name Office Signature
________________ ______________ _____________________
________________ ______________ _____________________
IN WITNESS WHEREOF, the undersigned have hereto set our names.
----------------------- --------------------------
Title: _____________
Title: Clerk
Date: June , 1995
Exhibit D to the
Credit Agreement
----------------
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of June ___, 1995
(as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among Bangor Hydro-Electric Company (the "COMPANY"), the
Banks named therein and Chemical Bank, as administrative agent for the Banks
(in such capacity, the "ADMINISTRATIVE AGENT"). Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
(the "ASSIGNOR") and (the
"ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as
of the Transfer Effective Date (as defined below), an interest (the "ASSIGNED
INTEREST") specified on Schedule 1 in and to the Assignor's rights and
obligations under the Credit Agreement with respect to those credit
facilities contained in the Credit Agreement as are set forth on Schedule 1
(individually, an "ASSIGNED FACILITY"; collectively, the "ASSIGNED
FACILITIES"), in a principal amount for each Assigned Facility as set forth
on Schedule 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document
or with respect to the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other Loan
Document or any other instrument or document furnished pursuant thereto,
other than that the Assignor has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and
clear of any such adverse claim; (b) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Company, any of its Subsidiaries or any other obligor or the performance or
observance by the Company, any of its Subsidiaries or any other obligor of
any of their respective obligations under the Credit Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto
or thereto; and (c) attaches any Note or Notes held by it evidencing the
Assigned Facilities and (i) requests that the Administrative Agent, upon
request by the Assignee, exchange the attached Note or Notes for a new Note
or Notes payable to the Assignee and (ii) if the Assignor has retained any
interest in the Assigned Facility, requests that the Administrative Agent
exchange the attached Note or Notes for a new Note or Notes payable to the
Assignor, in each case in amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Transfer Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 5.4(a) thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance;
(c) agrees that it will, independently and without reliance upon the
Assignor, the Administrative Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the
Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d) appoints and authorizes
the Administrative Agent to take such action as Administrative Agent on its
behalf and to exercise such powers and discretion under the Credit Agreement,
the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are incidental thereto; and
(e) agrees that it will be bound by the provisions of the Credit Agreement
and will perform in accordance with its terms all the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Bank including, if it is organized under the laws of a jurisdiction outside
the United States, its obligation pursuant to Section 2.17 of the Credit
Agreement.
4. The effective date of this Assignment and Acceptance shall be
, 19 (the "TRANSFER EFFECTIVE DATE"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent
for acceptance by it and recording by the Administrative Agent pursuant to
the Credit Agreement, effective as of the Transfer Effective Date (which
shall not, unless otherwise agreed to by the Administrative Agent, be earlier
than five Business Days after the date of such acceptance and recording by
the Administrative Agent).
5. Upon such acceptance and recording, from and after the Transfer
Effective Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignee whether such amounts have accrued prior to the
Transfer Effective Date or accrue subsequent to the Transfer Effective Date.
The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Transfer
Effective Date or with respect to the making of this assignment directly
between themselves.
6. From and after the Transfer Effective Date, (a) the Assignee shall be
a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Bank
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT, DATED AS OF JUNE __, 1995,
AMONG
BANGOR HYDRO-ELECTRIC COMPANY,
THE BANKS NAMED THEREIN
AND
CHEMICAL BANK, AS ADMINISTRATIVE AGENT FOR THE BANKS (IN SUCH CAPACITY, THE
"ADMINISTRATIVE AGENT")
- -----------------------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Transfer Effective Date of Assignment:
Credit
Facility Assigned
- -----------------
Principal
Amount Assigned
- ---------------
Commitment Percentage
Assigned*
- ----------------------------
$______________
___._______________%
[Name of Assignee]
By____________________________
Name:
Title:
[Name of Assignor]
By____________________________
Name:
Title:
Accepted for Recordation in the
Register:
Chemical Bank, as
Administrative Agent
By
_____________________________
Name:
Title:
Consented To:
Bangor Hydro-Electric Company
By
______________________________
Name:
Title:
Chemical Bank, as
Administrative Agent
By____________________________
Name:
Title:
[Consents required only to the
extent specified in Section
9.6(c) of the Credit
Agreement]
* Footnote: Calculate the Commitment Percentage that is assigned to at least
15 decimal places and show as a percentage of the aggregate commitments of
all Lenders.
Exhibit E-1 to the
Credit Agreement
------------------
BANGOR HYDRO-ELECTRIC COMPANY LETTERHEAD
June 30, 1995
Chemical Bank, as Administrative Agent
270 Park Avenue
New York New York 10017
And each of the Banks parties to the Credit Agreement
referred to below
Ladies and Gentlemen:
I am General Counsel and Clerk of Bangor Hydro-Electric Company, a Maine
corporation (the "COMPANY"), and I have acted as counsel for the Company in
connection with (a) the Credit Agreement, dated as of June 30, 1995 (the
"CREDIT AGREEMENT"), among the Company, the banks parties thereto (the
"BANKS") and Chemical Bank, as administrative agent for the Banks (in such
capacity, the "ADMINISTRATIVE AGENT"), and (b) the other Loan Documents
referred to in the Credit Agreement which have been executed by the Company
on or prior to the date hereof.
This opinion is furnished to you pursuant to Section 4.2(c) of the
Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
In arriving at this opinion,
(a) I have examined and relied on the originals, or copies certified or
otherwise identified to my satisfaction, of each of (1) the Credit Agreement,
(2) the Pledge Agreement, (3) the Supplemental Indenture dated as of June 29,
1995 (the "SUPPLEMENTAL INDENTURE") to the Mortgage and Deed of Trust dated
as of July 1, 1936, from the Company to City Bank Farmers Trust Company
(Citibank, N.A., successor), as trustee, as amended and supplemented (the
"1936 MORTGAGE"), (4) the Bonds of the Collateral Series due 2000 (the
"COLLATERAL BONDS") issued pursuant to the Supplemental Indenture and the
1936 Mortgage, and (5) the Notes executed and delivered by the Company on the
date hereof (the "NOTES", and together with the Credit Agreement, the Pledge
Agreement, the Supplemental Indenture, and the Collateral Bonds being
hereinafter referred to collectively as the "TRANSACTION DOCUMENTS"); and
(b) I have examined such corporate documents and records of the Company
and such other instruments and certificates of public officials, officers and
representatives of the Company and other Persons as I have deemed necessary
or appropriate for the purposes of this opinion.
In rendering this opinion, I have assumed, with your permission, without
independent investigation or inquiry, (a) the authenticity of all documents
submitted to me as originals, (b) the genuineness of all signatures on all
documents that I have examined (other than those of officers of the Company),
(c) the due execution and delivery of the Supplemental Indenture, and the due
authentication of the Collateral Bonds, by the trustee under the 1936
Mortgage and (d) the conformity to authentic originals of documents submitted
to me as certified, conformed or photostatic copies.
When my opinion with respect to the existence or absence of facts is
stated "to the best of my knowledge," I have made reasonable and diligent
investigation of the subject matters of such opinion and have no reason to
believe that there exist any facts or other information that would render
such opinion incomplete or incorrect.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Company (a) is duly organized, validly existing and in
good standing under the laws of the State of Maine, (b) has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged and (c) is duly qualified as a
foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except to the
extent that the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect.
2. The Company has the corporate power and authority, and the
legal right, to make, deliver and perform its obligations under the
Credit Agreement and each of the other Transaction Documents, to borrow
under the Credit Agreement and to issue, deliver and pledge to the
Administrative Agent the Collateral Bonds. The Company has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of the Credit Agreement, to grant the security interests
contemplated by the Pledge Agreement, to authorize the issuance,
delivery and pledge to the Administrative Agent of the Collateral Bonds
pursuant to the Supplemental Indenture and the Pledge Agreement and to
authorize the execution, delivery and performance of the Credit
Agreement and the other Transaction Documents. Except for consents,
authorizations, approvals, notices and filings as have been obtained or
made, as the case may be, and are now in full force and effect, no
consent or authorization of, approval by, notice to, filing with or
other act by or in respect of, any governmental authority or any other
Person is required in connection with the borrowings under the Credit
Agreement or with the execution, delivery, performance, validity or
enforceability of the Credit Agreement and the other Transaction
Documents or the perfection of the security interests created by the
Pledge Agreement or the issuance, delivery and pledge of the Collateral
Bonds pursuant to the Supplemental Indenture and the Pledge Agreement.
3. Each of the Credit Agreement and the other Transaction
Documents has been duly executed and delivered on behalf of the Company
and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting
creditors' rights generally and by general equitable principles.
4. The Collateral Bonds (a) are outstanding for all purposes of
the 1936 Mortgage, (b) do not constitute Company-owned Bonds for any
purposes of the 1936 Mortgage and (c) are entitled, subject to the terms
of the Pledge Agreement, to the benefits of the security afforded by the
1936 Mortgage.
5. The execution and delivery of the Credit Agreement and the
other Transaction Documents, the performance by the Company of its
obligations thereunder, the consummation of the transactions
contemplated thereby, the compliance by the Company with any of the
provisions thereof, the borrowings under the Credit Agreement and the
use of proceeds thereof, all as provided therein, (a) will not violate,
or constitute a default under, (i) any law, rule or regulation, (ii) the
Certificate of Organization or By-laws of the Company or (iii) to the
best of my knowledge, any contractual obligation of the Company or of
any of its Subsidiaries and (b) will not result in, or require, the
creation or imposition of any Lien on any of its or their respective
properties or revenues, except the security interests created pursuant
to the Pledge Agreement and the 1936 Mortgage.
6. To the best of my knowledge, no litigation, investigation or
proceeding of or before any arbitrator or governmental authority is
pending or threatened by or against the Company or any of its
Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Agreement or any of the other
Transaction Documents, or (b) which could reasonably be expected to have
a Material Adverse Effect.
7. The Company is exempt from the provisions of the Public
Utility Holding Company Act of 1935 and the rules promulgated thereunder
except for Section 9 (a)(2) thereof. The Company is not subject to any
other law, rule or regulation under any federal or state statute or
regulation which limits its ability to incur Debt under the Credit
Agreement.
I am a member of the bar of the State of Maine and I express no
opinion as to the laws of any jurisdiction other than the laws of the
State of Maine and the federal laws of the United States of America.
Insofar as my opinion expressed in paragraphs (2) and (3) above involve
the laws of the State of New York, I have relied on the opinion, dated
the date hereof, of Winthrop, Stimson, Putnam & Roberts, a copy of which
you have been furnished concurrently herewith, and with your permission
I have not made any independent investigation of such laws. I have no
responsibility to advise you of changes in any of the foregoing which
may hereafter come to my attention.
I express no opinion with respect to the effect on the Transaction
Documents of Section 552 of the United States Bankruptcy Code (relating to
property acquired by the Company or any of its subsidiaries after the
commencement of a case under the United States Bankruptcy Code with respect
to such party) and Section 547 of the United States Bankruptcy Code (relating
to a security interest in such after-acquired property which serves to secure
antecedent debt).
This opinion is being furnished only to the addressees and is solely for
their benefit and the benefit of their participants and assigns in connection
with the above transaction. This opinion may not be relied upon for any
other purpose, or relied upon by any other person, firm or corporation for
any purpose, without my prior written consent.
Very truly yours,
Exhibit E-2 to the
Credit Agreement
------------------
WINTRHOP, STIMSON, PUTNAM & ROBERTS LETTERHEAD
June 30, 1995
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
And each of the Banks parties to the Credit Agreement
referred to below
Ladies and Gentlemen:
We have acted as special New York counsel to Bangor Hydro-
Electric Company, a Maine corporation (the "COMPANY"), in connection with (a)
the Credit Agreement, dated as of June 30, 1995 (the "CREDIT AGREEMENT"),
among the Company, the banks parties thereto (the "BANKS") and Chemical Bank,
as administrative agent for the Banks (in such capacity, the "ADMINISTRATIVE
AGENT"), and (b) the other Loan Documents referred to in the Credit Agreement
which have been executed by the Company on or prior to the date hereof.
This opinion is furnished to you pursuant to Section 4.2(c) of
the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
In arriving at this opinion,
(a) we have examined and relied on the originals, or copies
certified or otherwise identified to our satisfaction, of each of (1) the
Credit Agreement, (2) the Pledge Agreement, (3) the Supplemental Indenture
dated as of June 29, 1995 (the "SUPPLEMENTAL INDENTURE") to the Mortgage and
Deed of Trust, dated as of July 1, 1936, from the Company to City Bank
Farmers Trust Company (Citibank, N.A., successor), as trustee, as amended and
supplemented (the "1936 MORTGAGE") (4) the Bonds of the Collateral Series due
2000 (the "COLLATERAL BONDS") issued pursuant to the Supplemental Indenture
and the 1936 Mortgage, and (5) the Notes executed and delivered by the
Company on the date hereof (the "NOTES", and together with the Credit
Agreement, the Pledge Agreement, the Supplemental Indenture and the
Collateral Bonds, being hereinafter referred to collectively as the
"TRANSACTION DOCUMENTS"); and
(b) we have examined such corporate documents and records of
the Company and such other instruments and certificates of public officials,
officers and representatives of the Company and other Persons as we have
deemed necessary or appropriate for the purposes of this opinion.
In rendering this opinion, we have assumed, with your
permission, without independent investigation or inquiry, (a) the
authenticity of all documents submitted to us as originals, (b) the
genuineness of all signatures on all documents that we have examined and (c)
the conformity to authentic originals of documents submitted to us as
certified, conformed or photostatic copies.
We have also assumed for purposes of this opinion, that the
Transaction Documents are within the capacity and power of and have been
validly authorized, executed and delivered by each party to them (other than
the Company) and constitute legal, valid, binding and enforceable obligations
of all parties (other than the Company) under all applicable laws.
Based upon and subject to the foregoing, and to the exceptions
and qualifications hereinafter expressed, we are of the opinion that:
1. No consent or authorization of,
approval by, notice to, filing with or other act by or in
respect of, any New York or Federal governmental authority is
required to be obtained by the Company in connection with the
borrowings under the Credit Agreement or with the execution,
delivery, performance, validity or enforceability of the
Credit Agreement and the other Transaction Documents or the
issuance, delivery and pledge of the Collateral Bonds pursuant
to the Supplemental Indenture and the Pledge Agreement. The
execution and delivery of the Credit Agreement and the other
Transaction Documents, the performance by the Company of its
obligations thereunder, the consummation of the transactions
contemplated thereby, the compliance by the Company with any
of the provisions thereof, the borrowings under the Credit
Agreement and the use of proceeds thereof, all as provided
therein, will not violate any New York or Federal statute or
regulation.
2. Assuming due authorization, execution
and delivery thereof by the Company and the Banks, each of the
Credit Agreement, the Pledge Agreement and the Notes
constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
or other similar laws affecting creditors' rights generally
and by general equitable principles.
3. The Company is not an "investment
company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of
1940, as amended. The Company is exempt from the provisions
of the Public Utility Holding Company Act of 1935 and the
rules promulgated thereunder except for Section 9(a)(2)
thereof. The Company is not subject to any other law, rule or
regulation under any Federal or New York statute or regulation
which limits its ability to incur Debt under the Credit
Agreement.
4. After giving effect to the delivery
to the Administrative Agent of the certificates for the
Collateral Bonds, and assuming the continuous possession by
the Administrative Agent of the Collateral Bonds in the State
of New York, the security interest created in favor of the
Administrative Agent under the Pledge Agreement to secure the
obligations of the Company under the Credit Agreement
constitutes a valid, enforceable and perfected first priority
security interest in such Collateral Bonds and the proceeds
thereof subject to no other security interest. The opinion
contained in this paragraph (4) is subject to the following
qualifications:
(i) our opinion as to priority assumes that the Administrative
Agent and the Banks have taken the Collateral Bonds in good faith prior
to the date of delivery to the Collateral Agent of notice of any adverse
claim relating to such Collateral Bonds (all within the meaning of the
Uniform Commercial Code as in effect in the State of New York (the
"NYUCC"));
(ii) the priority of a security interest may be subject to
claims or liens in favor of the United States or any state or
any agency or instrumentality of any thereof which are given
priority by operation of law, including, without limitation, to
the extent they would be given priority by operation of law,
liens for the payment of federal, state and/or local taxes, liens
incurred in connection with unemployment insurance, social
security and similar insurance schemes and claims under the
federal priority statute (31 U.S.C. Section 3713);
(iii) the priority of a security interest may be subject to
a prior lien created under Section 364 of the Federal Bankruptcy Code; and
(iv) our opinion as to the priority of the security
interests in the Collateral Bonds as against any person who is a lien
creditor (as such term is defined in Article 9 of the NYUCC) is limited
(a) to the extent that Section 9-301(4) of the NYUCC is applicable, or
(b) to the extent that such person became a lien creditor before the
security interest of the Administrative Agent in the Collateral Bonds is
perfected.
This opinion is subject to the following further
qualifications:
(a) We are members of the Bar of the
State of New York and we do not hold ourselves out as being conversant
with, and express no opinion as to, the laws of the State of Maine or
any other jurisdiction other than the United States of America and the
State of New York. This opinion is limited to the laws, regulations,
documents and other agreements, contracts and instruments within the
scope of this opinion in effect on the date of this opinion, and we
express no opinion as to the possible application of laws of other
jurisdictions, unless they are specifically referred to herein, and we
have no responsibility to advise you of changes in any of the foregoing
which may hereafter come to our attention.
(b) We express no opinion with respect to
the rights of the Company in or title to or legal or beneficial
ownership of any of the mortgaged property that is subject to the lien
of the 1936 Mortgage.
(c) We express no opinion with respect to
the effect on the Transaction Documents of Section 552 of the United
States Bankruptcy Code (relating to property acquired by the Company or
any of its subsidiaries after the commencement of a case under the
United States Bankruptcy Code with respect to such party) and
Section 547 of the United States Bankruptcy Code (relating to a security
interest in such after-acquired property which serves to secure
antecedent debt).
(d) The continuation of a security
interest in proceeds is limited to the degree set forth in Sections 9-
306(2) and 9-306(4) of the NYUCC and the perfection of a security
interest in proceeds continues only upon compliance with the provisions
of Section 8-313 or 9-306(3) of the NYUCC, as applicable.
This opinion is being furnished only to the addressees and is
solely for their benefit and the benefit of their participants and assigns in
connection with the above transaction. This opinion may not be relied upon
for any other purpose, or relied upon by any other person, firm or
corporation for any purpose, without our prior written consent.
Very truly yours,
EATON, PEABODY, BRADFORD & VEAGUE, P.A. LETTERHEAD
June 30, 1995
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Each of the Banks Party to the Credit Agreement
Referred to Below
Ladies and Gentlemen:
We have been asked to render this limited opinion to Chemical Bank, as
Administrative Agent, in connection with the Credit Agreement dated as of
June 30, 1995 (the "Credit Agreement") among Bangor Hydro-Electric Company
(the "Company"), the banks which are parties thereto (the "Banks") and
Chemical Bank, as administrative agent for the Banks (in such capacity, the
"Administrative Agent").
The opinions expressed below are furnished to you pursuant to Section
4.2(c)(iii) of the Credit Agreement. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings
ascribed to them in the Credit Agreement.
In arriving at the opinions expressed below, we have examined
(a) unexecuted copies in the form furnished to us of each of (1)
the Credit Agreement, (2) the Pledge Agreement, (3) the Supplemental
Indenture dated as of June 29, 1995 (the "Supplemental Indenture") with
respect to the Mortgage, (4) the Bonds of the Collateral Series due 2000 (the
"Collateral Bonds") referred to in the Supplemental Indenture, and (5) the
Notes executed and delivered by the Company on the date hereof (the Credit
Agreement and such other documents being hereinafter referred to collectively
as the "Transaction Documents"); and
(b) such corporate documents and records of the Company and such other
instruments and certificates of public officials, officers and
representatives of the Company and other Persons as we have deemed necessary
or appropriate for the purposes of this opinion.
In rendering the opinions expressed below, we have assumed, with your
permission without independent investigation or inquiry, (a) the authenticity
of all documents submitted to us as originals, (b) the genuineness of all
signatures on all documents that we have examined, (c) the conformity to
authentic originals of documents submitted to us in the form of unexecuted
photostatic copies or telecopies, (d) that all Transaction Documents have
been duly executed, delivered and authenticated in substantively the form
furnished to us for review, and (e) that the liens created by the Mortgage
and the Pledge Agreement have been and remain duly perfected and that there
is no contractual arrangement altering their priority.
Based upon and subject to the foregoing, we are of the opinion that:
1. Except for (i) such consents, authorizations, approvals, notices
and filings as may be required in connection with orders or proceedings of
the Maine Public Utilities Commission and related statutes and regulations,
with respect to which we express no opinion, and (ii) such filings as may be
required to duly perfect the security interest created by the Pledge
Agreement in Collateral other than the Pledged Bonds, no consent or
authorization of, approval by, notice to, filing with or other act by or in
respect of, any governmental authority of the State of Maine is required in
connection with the borrowings under the Credit Agreement or with the
execution, delivery, performance, validity or enforceability of the Credit
Agreement and the other Transaction Documents or the perfection of the
security interests created by the Pledge Agreement or the issuance, delivery
and pledge of the Collateral Bonds pursuant to the Supplemental Indenture and
the Pledge Agreement.
2. Each of the Transaction Documents which is governed by the laws of
the State of Maine constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and to
general principles of equity, whether considered in a proceeding in equity or
at law. Notwithstanding the foregoing, we express no opinion as to the
enforceability of provisions of the Transaction Documents pursuant to which
(i) any party purports to waive the benefit of statutory and common law
rights, (ii) any party is purportedly granted the right to exercise remedies
without notice to the party with respect to whom the rights are to be
exercised or without benefit of legal process, or (iii) a party is
purportedly indemnified with respect to its own negligence or willful
misconduct. The enforceability of any provision purporting to entitle a
party to be reimbursed for attorneys fees and other costs may be subject to
judicial discretion.
3. The courts of the State of Maine will enforce those provisions in
the Transaction Documents which provide that the validity, construction and
enforceability of such documents will be governed by the laws of the State of
New York.
4. The Collateral Bonds (a) are outstanding for all purposes of the
Mortgage, (b) do not constitute Company-owned Bonds for any purposes of the
Mortgage, and (c) are entitled, subject to the terms of the Pledge Agreement,
to the substantive benefits of the security afforded by the Mortgage.
5. The execution and delivery of the Credit Agreement and the other
Transaction Documents, the performance by the Company of its obligations
thereunder, the consummation of the transactions contemplated thereby, the
compliance by the Company with any of the provisions thereof, the borrowings
under the Credit Agreement and the use of proceeds thereof, all as provided
therein, will not violate any law, rule or regulation of the State of Maine
or of any Maine governmental authority.
6. Under the laws of the State of Maine (a) the mortgage interest in
real estate and the security interest in personalty of the First Mortgage
Trustee in the Collateral created by the Mortgage has priority over the
mortgage interest in real estate and the security interest in personalty of
the Second Mortgage Trustee in the Collateral created by the General and
Refunding Mortgage Indenture; and (b) the exercise by the Second Mortgage
Trustee or holders of the Second Mortgage Bonds of rights in respect of the
Collateral pursuant to the General and Refunding Mortgage Indenture will not
extinguish or affect the priority of the mortgage interest and security
interest created by the Mortgage. As used in this paragraph, (i) "First
Mortgage Trustee" means the Trustee referred to in the Mortgage, (ii) "Second
Mortgage Trustee" means the Trustee referred to in the General and Refunding
Mortgage Indenture, and (iii) "Collateral" means the Mortgaged Property
referred to in the General and Refunding Mortgage Indenture (except to the
extent that such Mortgaged Property does not constitute mortgaged and pledged
property for the purposes of the Mortgage).
The opinions expressed in paragraphs 1 and 5 above are based solely upon
a review by us of those Maine statutes and regulations that a lawyer
exercising customary professional diligence would reasonably recognize as
being directly applicable to the transactions contemplated by the Transaction
Documents. Without limiting the generality of the foregoing, we express no
opinion with respect to orders or proceedings of the Maine Public Utilities
Commission or other statutes and regulations relating specifically to the
regulation of electric utilities. To the extent that we have opined as to
future conduct, such opinion is subject to future changes in applicable law
and regulation.
We have addressed only the laws of the State of Maine, and our opinion
is limited accordingly. We express no opinion as to the enforceability of
documents to the extent governed by the laws of jurisdictions other than the
State of Maine.
We do not undertake to advise you of any changes to the opinions
expressed herein resulting from matters which may hereafter be brought to our
attention.
We advise you that we have been separately engaged by Fleet Bank to
review on its behalf certain of the Transaction Documents. We also advise
that we perform legal services unrelated to the transactions contemplated by
the Transaction Documents on behalf of Fleet Bank, Key Bank and the Company.
This opinion is being furnished to the Banks party to the Credit
Agreement solely in connection with the transactions contemplated by the
Transaction Documents. It may not be relied upon by any other person or for
any other purpose without our expressed written consent.
Very truly yours,
EXHIBIT F
---------
BOND PLEDGE AND SECURITY AGREEMENT
BOND PLEDGE AND SECURITY AGREEMENT, dated as of June 30, 1995, made
by BANGOR HYDRO-ELECTRIC COMPANY, a Maine corporation (the "PLEDGOR"), to
CHEMICAL BANK, as Administrative Agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the banks (the "BANKS") parties to the Credit Agreement dated as
of June 30, 1995 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among the Pledgor, the Banks and the
Administrative Agent.
W I T N E S S E T H :
WHEREAS, the Pledgor has on the date hereof issued $115,000,000
principal amount of its First Mortgage Bonds (the "PLEDGED BONDS") pursuant
to a Supplemental Indenture, dated as of the date hereof, to the Mortgage and
Deed of Trust, dated as of July 1, 1936 (as amended, supplemented or
otherwise modified from time to time, the "MORTGAGE"), between the Pledgor
and Citibank, N.A. (as successor to City Bank Farmers Trust Company), as
trustee thereunder (the "FIRST MORTGAGE TRUSTEE"); and
WHEREAS, it is a condition precedent to the obligations of the
Banks to make the extensions of credit under the Credit Agreement that the
Pledgor shall have executed and delivered this Agreement, and delivered in
pledge the Pledged Bonds, to the Administrative Agent, on behalf of and for
the ratable benefit of the Banks;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Banks to enter into and make the extensions of credit provided for
under the Credit Agreement and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Pledgor hereby
agrees with the Administrative Agent on behalf of and for the ratable benefit
of the Banks as follows:
Section 1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement shall have such defined meanings when used
herein. As used herein:
"COLLATERAL" shall mean the Pledged Bonds and all other property at
any time pledged to the Administrative Agent hereunder (whether
described herein or not) and all income therefrom and proceeds thereof.
"FIRST MORTGAGE BONDS" shall mean any Bonds (including the Pledged
Bonds) issued pursuant to the Mortgage.
"OBLIGATIONS" shall mean the collective reference to the unpaid
principal of and interest on the Loans and all other obligations and
liabilities of the Pledgor to the Administrative Agent and the Banks
(including, without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans
and interest accruing at the then applicable rate provided in the Credit
Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
relating to the Pledgor, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the Letters of Credit, the
other Loan Documents or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Banks that are required
to be paid by the Pledgor pursuant to the terms of the Credit Agreement
or this Agreement or any other Loan Document).
"SECOND MORTGAGE TRUSTEE" shall mean the Trustee referred to in the
General and Refunding Mortgage Indenture.
"SPECIFIED MORTGAGE COLLATERAL" shall mean the Mortgaged Property
referred to in the General and Refunding Mortgage Indenture (except to
the extent that such Mortgaged Property does not constitute mortgaged
and pledged property for the purposes of the Mortgage).
Section 2. PLEDGE. The Pledgor hereby pledges, assigns,
hypothecates, transfers, and delivers to the Administrative Agent on behalf
of and for the ratable benefit of the Banks, and grants a security interest
to the Administrative Agent on behalf of and for the ratable benefit of the
Banks in, all the Pledged Bonds, fully registered in the name of the
Administrative Agent, together with all income and profits thereof, all
distributions thereon, all collateral security therefor, all other proceeds
thereof and all other rights and privileges pertaining thereto, all as
collateral security for the prompt and complete payment when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations.
Section 3. NO RIGHT TO MODIFY, ETC. The Pledgor shall not amend,
supplement or otherwise modify, or consent to any amendment, supplement or
other modification to, the terms of the Pledged Bonds or the other First
Mortgage Bonds (or any supplemental indenture issued in connection therewith)
or the Mortgage (provided that the foregoing shall not prohibit the issuance
of any supplemental indenture in respect of the Mortgage solely to the extent
necessary to provide for the issuance of refinancing Debt expressly permitted
by Section 6.3 of the Credit Agreement). The Pledgor shall not have the
right to optionally redeem the Pledged Bonds without the consent of the
Administrative Agent.
Section 4. NO DISPOSITION. Without the prior written consent of
the Administrative Agent, the Pledgor agrees that it will not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, nor will it create, incur or permit to exist any pledge,
lien, mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Collateral, or any interest therein,
or any proceeds thereof, except for the lien and security interest provided
for by this Agreement.
Section 5. AMENDMENTS, MODIFICATIONS AND WAIVERS WITH RESPECT TO
OBLIGATIONS. The Pledgor hereby consents that, without the necessity of any
reservation of rights against the Pledgor, and without notice to or further
assent by the Pledgor, any demand for payment of any of the Obligations made
by the Administrative Agent or the Banks may be rescinded by the
Administrative Agent or the Banks and any of the Obligations continued, and
the Obligations, or the liability of the Pledgor or any other party upon or
for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, refunded, extended, amended, modified, accelerated,
compromised, waived, surrendered, or released by the Administrative Agent or
any Bank and the Credit Agreement and any Loan Document or any other
documents delivered in connection therewith may be amended, modified,
supplemented or terminated in whole or in part, as the Banks may deem
advisable from time to time, and any collateral security at any time held by
the Banks for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released, all without the necessity of any reservation of
rights against the Pledgor and without notice to or further assent by the
Pledgor, which will remain bound hereunder, notwithstanding any such renewal,
extension, modification, acceleration, compromise, amendment, supplement,
termination, sale, exchange, waiver, surrender or release. Neither the
Administrative Agent nor the Banks shall have any obligation to protect,
secure, perfect or insure any other collateral security document or property
subject thereto at any time held as security for the Obligations. The
Pledgor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Bank upon this Agreement, and the Obligations,
and any of them, shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Agreement, and all dealings
between the Pledgor and the Administrative Agent and the Banks shall likewise
be conclusively presumed to have been had or consummated in reliance upon
this Agreement. The Pledgor waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Pledgor with
respect to the Obligations.
Section 6. RIGHTS OF THE BANKS AND THE ADMINISTRATIVE AGENT. (a)
ADMINISTRATIVE AGENT TO EXERCISE RIGHTS OF BONDHOLDER. The Administrative
Agent may, at all times, exercise all of the rights of a holder of First
Mortgage Bonds including, without limitation, (i) the right to demand and
receive payments of principal of and interest on the Pledged Bonds in
accordance with the terms thereof and of the Mortgage, (ii) the right to
attend or be represented by proxy at any meeting of bondholders under the
Mortgage, (iii) the right to vote the Pledged Bonds in accordance with the
terms of the Mortgage, (iv) the right to issue consents and waivers with
respect to the Pledged Bonds, as a holder of First Mortgage Bonds, under or
in connection with the Mortgage, (v) the right to issue any and all
instructions and requests for action to the First Mortgage Trustee under the
Mortgage which are permitted to a bondholder under the Mortgage and (vi) the
right to exercise all of the remedies provided in the Mortgage for holders of
bonds issued thereunder.
(b) OTHER REMEDIES. If an Event of Default shall have occurred
and be continuing, in addition to the rights granted to the Administrative
Agent under Section 6(a) hereof, the Administrative Agent, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or
upon the Pledgor or any other Person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, assign, give option or options to
purchase, contract to sell or otherwise dispose of and deliver said
Collateral, or any part thereof, in one or more parcels at public or private
sale or sales, at any exchange, broker's board or at any of the
Administrative Agent's offices or elsewhere upon such terms and conditions as
it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk, with the
right to the Administrative Agent or any Bank upon any such sale or sales,
public or private, to purchase the whole or any part of said Collateral so
sold, free of any right or equity of redemption in the Pledgor, which right
or equity is hereby expressly waived or released. The Administrative Agent
shall pay over the net proceeds received on the Pledged Bonds, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care, safekeeping or otherwise of any and all of the
Collateral or in any way relating to the rights of the Administrative Agent
hereunder, including reasonable attorneys' fees and legal expenses, ratably
to the Banks for application by them to the payment in whole or in part of
the Obligations in such order as each of the Banks may elect, the Pledgor
remaining liable for any deficiency remaining unpaid after such application,
and only after so paying over such net proceeds and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(l)(c) of the Uniform Commercial
Code, need the Administrative Agent account for the surplus, if any, to the
Pledgor. In addition to the rights and remedies granted to it in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to any of the Obligations, the Administrative Agent shall have all
the rights and remedies of a secured party under the Uniform Commercial Code
of the State of New York. The Pledgor further agrees to waive and agrees not
to assert any rights or privileges which it may acquire under Section 9-112
of the Uniform Commercial Code and the Pledgor shall be liable for the
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all amounts to which the Banks are entitled, and the
fees of any attorneys employed by the Administrative Agent to collect such
deficiency.
(c) LIMITED LIABILITY. Neither the Administrative Agent nor any
Bank shall be liable for failure to collect or realize upon the Obligations
or any collateral security or guarantee therefor, or any part thereof, or for
any delay in so doing nor shall any of them be under any obligation to take
any action whatsoever with regard thereto. Although the Administrative Agent
or its nominee may without notice exercise any and all rights, privileges or
options pertaining to any of the Pledged Bonds as if it were the absolute
owner thereof, the Administrative Agent shall have no duty to exercise any of
the aforesaid rights, privileges or options, shall not be responsible for any
failure to do so or delay in so doing and, in any event, may do so without
liability.
Section 7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGOR. The Pledgor represents and warrants that:
(a) the Pledged Bonds are subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option or other encumbrance or
any ownership interest whatsoever, except the lien and security interest
created by this Agreement;
(b) the pledge, assignment and delivery of the Pledged Bonds
pursuant to this Agreement, together with possession by the
Administrative Agent of the Pledged Bonds, creates a valid first lien on
and a perfected first priority security interest in such Pledged Bonds,
and the proceeds thereof, subject to no other pledge, lien, mortgage,
hypothecation, security interest, charge, option or encumbrance or to
any agreement purporting to grant to any third party a security interest
in the Pledged Bonds;
(c) the Pledged Bonds have been duly and validly issued and
authenticated, are in full force and effect and are entitled to all the
benefits provided by the Mortgage;
(d) the Pledged Bonds (i) are outstanding for all purposes of the
Mortgage and (ii) do not constitute "Company-owned" Bonds for any
purposes of the Mortgage;
(e) (i) the mortgage interest in real estate and security interest
in personalty of the First Mortgage Trustee in the Specified Mortgage
Collateral created by the Mortgage has priority over the mortgage
interest in real estate and the security interest in personalty of the
Second Mortgage Trustee in the Specified Mortgage Collateral created by
the General and Refunding Mortgage Indenture; and (ii) the exercise by
holders of Second Mortgage Bonds of rights in respect of the Specified
Mortgage Collateral pursuant to the General and Refunding Mortgage
Indenture will not extinguish or affect the priority of the mortgage
interest and security interest created by the Mortgage;
(f) the Mortgage has been duly recorded in all places where
required by law to preserve the lien thereof, and all filings required
under the Uniform Commercial Code as in effect in the State of Maine and
any other applicable jurisdiction to perfect and continue the perfection
of the lien thereof have been made and are in full force and effect;
(g) the Mortgage constitutes a valid and perfected first priority
security interest and lien upon the franchises held by the Pledgor and
substantially all of the Pledgor's utility plant as security for the
First Mortgage Bonds and the other obligations purported to be secured
by the Mortgage, subject, however, to the exceptions set forth in the
description of mortgaged properties in the Mortgage and in the deeds
referred to in such descriptions; and
(h) the Pledgor covenants and agrees that it will defend the
Administrative Agent's and the Banks' right, title and security interest
in and to the Pledged Bonds and the proceeds thereof against the claims
and demands of all Persons whomsoever.
Section 8. FURTHER ASSURANCES. The Pledgor agrees that at any
time and from time to time upon the written request of the Administrative
Agent, the Pledgor will execute and deliver such documents and do such
further acts and things as the Administrative Agent may reasonably request in
order to effect the purposes of this Agreement including, without limitation,
with respect to the filing or recordation hereof or any financing statements
with respect hereto. The Pledgor hereby authorizes the Administrative Agent,
to the extent permitted by applicable law, to make any such filings or
recordations without the signature of the Pledgor. All costs and expenses in
connection with any such actions and filings shall be payable by the Pledgor
on demand.
Section 9. THE ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-
FACT. The Pledgor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer thereof with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Pledgor and in the name of the
Pledgor or in its own name, to file any claims or take any action (in law or
equity or as otherwise deemed appropriate by the Administrative Agent) which
the Administrative Agent may deem necessary or desirable to accomplish the
purposes of this Agreement.
Section 10. INDEMNITY. The Pledgor shall pay, and save the
Administrative Agent and the Banks harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes and any and all recording and filing fees which
may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated by this
Agreement.
Section 11. REDELIVERY OF PLEDGED BONDS UPON PAYMENT OF THE
OBLIGATIONS. (a) If (i) the Pledgor makes a scheduled installment payment
in respect of the Term Loans and (ii) the Administrative Agent shall have
received the financial statements and certificates referred to in Sections
6.1(b) and (c) of the Credit Agreement in respect of the fiscal quarter of
the Company ending on the scheduled date of such installment, then, unless a
Default or Event of Default shall have occurred and be continuing, the
Administrative Agent shall forthwith assign and deliver to the Second
Mortgage Trustee, without recourse, representation or warranty, Pledged Bonds
having an aggregate principal amount equal to the amount of the Term Loan
installment so paid.
(b) No later than ninety-one days after final payment in full of
the Obligations and the termination of the Commitments, the Administrative
Agent shall return to the Pledgor any Pledged Bonds not previously assigned
pursuant to paragraph (a) above, without recourse, representation or
warranty.
Section 12. REINSTATEMENT. This Agreement and the pledge created
hereby and the obligations of the Pledgor with respect to the Pledged Bonds
shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Obligations is rescinded
or must otherwise be restored or returned by the Administrative Agent or any
Bank upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Pledgor or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee, custodian or similar
officer for, the Pledgor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
Section 13. SEVERABILITY. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 14. NO WAIVER; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor the Banks shall by any act, delay, omission or
otherwise be deemed to have waived any of its or their rights or remedies
hereunder or under the Pledged Bonds and no waiver shall be valid unless in
writing, signed by the Administrative Agent on behalf of the Banks, and then
only to the extent therein set forth. A waiver by the Administrative Agent
of any right or remedy hereunder or under the Pledged Bonds on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or the Banks would otherwise have on any future
occasion. No failure to exercise nor any delay in exercising on the part of
the Administrative Agent or the Banks, any right, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under the Pledged
Bonds preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided or
under the Pledged Bonds are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by
law.
Section 15. AUTHORITY OF AGENT. The Pledgor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise
or non-exercise by the Administrative Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting
or arising out of this Agreement shall, as between the Administrative Agent
and the Banks, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Pledgor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Banks with
full and valid authority so to act or refrain from acting, and the Pledgor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
Section 16. SECTION HEADINGS. The section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
Section 17. WAIVERS, AMENDMENTS; APPLICABLE LAW. None of the
terms or provisions of this Agreement may be waived, altered, modified or
amended except by an instrument in writing, duly executed by the
Administrative Agent on behalf of the Banks. This Agreement and all
obligations of the Pledgor hereunder shall be binding upon the successors and
assigns of the Pledgor, and shall, together with the rights and remedies of
the Administrative Agent hereunder, inure to the benefit of the
Administrative Agent, the Banks and their respective successors and assigns.
This Agreement shall be governed by, and be construed and interpreted in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered as of the day and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY
By:___________________________
Title:
EXHIBIT G
LIST OF SUBSIDIARIES OF
BANGOR HYDRO-ELECTRIC COMPANY
Voting Percentages
of Securities owned
State of directly or through
Incorporation Subsidiary
------------- -------------------
East Branch Improvement
Company Maine 60%
Godfrey's Falls Dam
Company Maine 100%
The Sawtelle Brook
Dam and Improvement
Company Maine 100%
Sebois Dam Company Maine 100%
Pleasant River Gulf
Improvement Company Maine 100%
Northeastern Company Maine 100%
Eastern Development
Company Maine 100%
Penobscot Hydro Co., Inc. Maine 100%
Bangor Var Company, Inc. Maine 100%
East Branch Improvement Company is a water storage subsidiary,
operating on the East Branch of the Penobscot River. The capital stock of
this subsidiary consists of 3,029 25/100 shares of the par value of $100
each, of which the Company owns 1,817 55/100 shares, the balance being owned
by Great Northern Paper Company.
Godfrey's Falls Dam Company has a capital stock consisting of 114
shares of $50 par value each, all of which are owned by East Branch
Improvement Company. Ownership has been acquired to permit future water
storage development in the East Branch Basin.
The Sawtelle Brook Dam and Improvement Company has 42 shares of
its capital stock outstanding. Each of these shares is of the par value of
$100, and all are owned by East Branch Improvement Company. This subsidiary
controls certain dams and water rights in the basin of the East Branch of the
Penobscot River and was acquired to permit future water storage development
in the East Branch Basin.
Sebois Dam Company is a Maine corporation organized to improve the
navigation of certain of the Sebois waters which enter the Piscataquis River.
It has the right to maintain dams for the driving of logs and lumber. It is
presently an inactive corporation and has no income.
Pleasant River Gulf Improvement Company is a corporation organized
under Maine law. It is a water improvement company authorized by its charter
to erect and maintain dams and to improve the flow of water in the West
Branch of the Piscataquis River in Maine for the purpose of making the West
Branch floatable and facilitating the driving of logs and lumber upon the
same. It is presently an inactive corporation and has no income.
Northeastern Company is an inactive corporation organized under
Maine law. It was acquired to hold certain real and personal properties
useful at the time of the acquisition thereof in the conduct of the business
of Bangor Hydro-Electric Company. Its holdings have since been disposed of,
and at the present time it has outstanding three shares of capital stock of
the par value of $100 each, all of which are owned by Bangor Hydro-Electric
Company.
Eastern Development Company is an inactive corporation organized
under Maine law. It was organized to acquire and hold certain properties for
ultimate transfer to Bangor Hydro-Electric Company. All holdings have been
disposed of and the corporation has no present assets or liabilities.
Penobscot Hydro Co., Inc. is a 50% joint venturer in the ownership
and operation of a hydro-electric project in West Enfield, Maine.
Bangor Var Co., Inc. is a 50% joint venturer in the ownership and
operation of a static var compensator in Chester, Maine. A static var
compensator is electrical equipment constructed in connection with the
Hydro-Quebec Phase 2 Project, and all its capital and operating costs are
supported by the participants in that Project.
EXHIBIT H
TRANSACTIONS POSSIBLY
CONSTRUED AS "GUARANTEES"
1. Contractual obligations of the Company with respect to its
status as a stockholder and sponsor of Maine Yankee Atomic Power Company
("MAINE YANKEE") and as a stockholder of Maine Electric Power Company, Inc.
("MEPCO") and a participant in MEPCO's transmission support agreements.
2. Obligations of the Company in connection with the
decommissioning of Maine Yankee, including contractual obligations with
respect to the payment of the Company's share of the costs of
decommissioning, contractual obligations with respect to contribution among
sponsors in the event of the imposition of joint and several liability for
the safe and proper decommissioning of Maine Yankee, and obligations imposed
by law or regulation.
3. Contractual obligations of the Company with respect to its
participation in the Hydro-Quebec Phase 1 interconnection as set forth in a
letter of the Company dated April 11, 1983, previously furnished to the Bank.
4. Contractual obligations of the Company with respect to its
participation in the Hydro-Quebec Phase 2 project as set forth in a letter of
the Company dated January 16, 1986, previously furnished to the Bank.
5. Contractual obligations of the Company under a Capital Support
Agreement dated January 29, 1987 with lenders in connection with the
financing of the hydro-electric project in West Enfield, Maine.
EXHIBIT I HAS BEEN PROVIDED SEPARATELY
FINANCE AUTHORITY OF MAINE
Taxable Electric Rate Stabilization Revenue Notes Series 1995A
(Bangor Hydro-Electric Company)
PURCHASE CONTRACT
PURCHASE CONTRACT dated as of June 28, 1995 ("Purchase Contract") among
the FINANCE AUTHORITY OF MAINE, a body corporate and politic and a public
instrumentality of the State of Maine (the "Authority"), BANGOR HYDRO-
ELECTRIC COMPANY, a Maine corporation (the "Company") and PRUDENTIAL
SECURITIES INCORPORATED, as representative (the "Representative") of itself,
Chemical Securities Inc., PaineWebber Incorporated and Smith Barney Inc.
(collectively with the Representative, the "Initial Purchasers").
1. BACKGROUND.
(a) The Authority proposes to issue $126,000,000 in aggregate principal
amount of its Taxable Electric Rate Stabilization Revenue Notes Series 1995A
(Bangor Hydro-Electric Company) (the "Notes"), of which: (i) $105,000,000 in
aggregate principal amount will be loaned to the Company pursuant to the
Agreement (defined below) to finance a portion of the costs associated with
the buy back of the power purchase agreements between the Company and (A)
Babcock-Ultrapower West Enfield and (B) Babcock-Ultrapower Jonesboro,
respectively, and to pay costs of issuance of the Notes, and (ii) $21,000,000
in aggregate principal amount will be used to fund the Capital Reserve Fund
(as defined in the Indenture referred to herein);
(b) The Notes will mature on July 1, 2005, and will not be subject to
redemption prior to maturity. The interest rate on the Notes shall be 7.03%
per annum. The Notes will be issued pursuant to a resolution adopted on May
18, 1995 by the members of the Authority (the "Note Resolution"), and will be
secured under a Trust Indenture (the "Indenture"), dated as of June 1, 1995,
between the Authority and First Fidelity Bank, a Connecticut bank and trust
company, as trustee (the "Trustee") for the holders of the Notes. Terms used
and not otherwise defined herein shall have the meanings assigned to them in
the Indenture. The Notes will be payable from the Trust Estate, as defined
in the Indenture, including the Pledged Revenues, as defined in a Loan
Agreement (the "Agreement"), dated as of June 1, 1995, between the Authority
and the Company, pursuant to which the Authority will loan a portion of the
proceeds of the Notes to the Company for the purposes therein described. To
evidence, secure and provide for the repayment of the Loan, the Company will
deliver to the Authority its Second Mortgage Bonds (as defined in the
Agreement), of like principal amount, maturity date and interest rate as the
Notes. The Mortgage Bonds are not subject to redemption prior to maturity at
the option of the Company.
(c) The Notes will be further secured by the Capital Reserve Fund
established by the Authority with the Trustee pursuant to the provisions of
Chapter 110, Title 10 of the Maine Revised Statutes, as amended (the "Act"),
which provides that in order to maintain the Capital Reserve Fund at the
Reserve Requirement, there shall be paid from the State Contingency Account
and, to the extent sufficient moneys are unavailable therein, appropriated by
the Maine State Legislature annually and paid to the Authority, such sum as
shall be certified by the Authority on or before December 1, annually, as
necessary to restore the amount in the Capital Reserve Fund to the Reserve
Requirement. While the Notes and the aforesaid provisions of the Act do not
constitute a legally enforceable obligation of the State nor create a debt on
behalf of the State, there is no constitutional bar to future Legislatures to
appropriate such sum as shall have been certified by the Authority to the
Governor as necessary to restore the Capital Reserve Fund to the Reserve
Requirement.
(d) It is intended that the issuance of the Notes and the use of the
proceeds thereof will conform with the provisions of the Act; and that the
Notes may be purchased by the Initial Purchasers without registration of any
security under the Securities Act of 1933, as amended (the "Securities Act"),
or qualification of any indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). The Initial Purchasers have advised the
Authority and the Company that the Initial Purchasers will offer and sell the
Notes purchased by them hereunder in accordance with Section 4 hereof as soon
as they deem advisable.
(e) To induce the Authority to enter into this Purchase Contract and to
issue and deliver the Notes, the Company has joined in this Purchase
Contract.
(f) The Notes are being issued in book-entry only form, and the parties
acknowledge that, where appropriate, references herein to Notes shall mean
beneficial interests therein.
2. PURCHASE AND SALE OF THE NOTES. Upon the terms and conditions and
in reliance upon the representations and warranties of the Authority and the
Company set forth herein, the Authority agrees to sell, and each Initial
Purchaser agrees, severally and not jointly, to purchase from the Authority
at a purchase price of 99.29% of the aggregate principal amount of the Notes,
the principal amount of the Notes set forth opposite the name of such
Purchaser on Exhibit A hereto.
The purchase price for the Notes shall be $125,105,400, which shall be
determined as set forth in Schedule I hereto, and payable as set forth in
Section 3 hereto. In addition, the Company shall pay or cause to be paid
costs and expenses including, but not limited to, reasonable fees and
expenses of the Initial Purchasers' counsel and such other costs and
expenses, if any, described in Section 13 hereof incurred by the Initial
Purchasers and the other parties mentioned in said Section 13 as of the
Closing (all such costs and expenses to be submitted to the Company prior to,
or as soon as practicable after, the Closing).
3. DELIVERY AND PAYMENT FOR THE NOTES. The issuance, sale and
purchase, and delivery of the Notes shall take place at the offices of
Hawkins, Delafield & Wood, 67 Wall Street, New York, New York 10005 at
10:00 a.m., at a closing (the "Closing") on June 30, 1995 or on such other
business day and at such other offices as may be agreed upon by the
Authority, the Company, and the Representative. At the Closing, the
Authority will deliver to the Representative through the facilities of The
Depository Trust Company ( DTC") a note dated the date of such Closing (the
"Global Note") representing all of the Notes to be purchased on such date,
against delivery by the several Initial Purchasers to the Authority or to its
order of immediately available funds in the amount of the purchase price
thereof. The Global Note so delivered to the Representative shall be
registered in the name of Cede & Co., as nominee for DTC. Delivery of such
Global Note representing the Notes shall be made at such location as the
Representative shall reasonably designate at least two business days in
advance of the Closing date. If at the Closing, (i) the Authority shall fail
to deliver the Global Note to the Initial Purchasers, (ii) any of the
conditions specified in Section 8 hereof shall not have been fulfilled to the
Initial Purchasers' satisfaction, or (iii) the Initial Purchasers'
obligations hereunder shall have terminated pursuant to Section 9 hereof, the
Initial Purchasers shall, at the Initial Purchasers election, be relieved of
all further obligations under this Purchase Contract without thereby waiving
any other rights the Initial Purchasers may have by reason of such failure or
such nonfulfillment. The Authority and the Company agree to have the Notes
available for inspection, checking and packaging by the Representative in New
York, New York not later than 1:00 p.m. on the business day prior to the
Closing.
4. OFFERING OF NOTES. Each Initial Purchaser represents and warrants
to and agrees with the Authority and the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Notes except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Notes is aware
that such sale is being made in reliance on Rule 144A, (ii) to a limited
number of institutional accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that, prior to the
purchase of any Notes offered hereby, deliver to the Initial Purchasers
a letter containing certain representations and agreements relating to
resale or transfer and (iii) pursuant to offers and sales that occur
outside the United States within the meaning of regulation S under the
Securities Act.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Notes by means of any form of general
solicitation or general advertising (within the meaning of Regulation
D).
5. PLACEMENT MEMORANDUM. In connection with the sale of the Notes,
the Authority and the Company have prepared a preliminary private placement
memorandum, dated June 19, 1995, including any and all exhibits thereto and
any information incorporated by reference therein (the "Preliminary Private
Placement Memorandum"), and a final private placement memorandum, dated June
28, 1995, including any and all exhibits thereto and any information
incorporated by reference therein (the "Private Placement Memorandum")
(collectively, the "Placement Memorandum"). The Authority and the Company
hereby ratify the use by the Initial Purchasers prior to the date hereof of
the Preliminary Private Placement Memorandum and the Private Placement
Memorandum in connection with the offering, sale and distribution of the
Notes by the Initial Purchasers on the terms provided herein and therein.
The Placement Memorandum may be amended or supplemented only by the
Authority and the Company, with the consent of the Initial Purchasers, which
consent shall not be unreasonably withheld.
The Authority and the Company hereby consent to the use of the forms of
the Indenture and the Agreement, the Notes, and other documents referred to
in the Placement Memorandum (the "Financing Documents" as defined in the
Agreement) in connection with the offering, sale and distribution of the
Notes on the terms provided in the Placement Memorandum.
6. REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY. The Authority
represents and warrants to the Initial Purchasers, as of the date hereof and
as of the date of the Closing, as follows:
(a) The Authority is a body corporate and politic and a public
instrumentality of the State of Maine, and has full power and authority
under the Act, among other things, (i) to issue revenue obligation
securities, such as the Notes, and to make the proceeds of such Notes
available to persons such as the Company for the purposes described in
the Indenture and the Agreement, payable from and secured by a pledge of
the Trust Estate, and (ii) to secure such Notes in the manner
contemplated by the Indenture.
(b) The Authority has full legal right, power and authority (i) to
adopt the Note Resolution, (ii) to enter into this Purchase Contract,
the Indenture, and the Agreement, (iii) to issue, sell and deliver the
Notes as provided herein, and (iv) to carry out and consummate all other
transactions contemplated by each of the aforesaid documents to be
performed by the Authority, and the Authority has complied with all
provisions of applicable law, including the Act, in all matters relating
to such transactions.
(c) The Authority has duly authorized (i) the issuance and sale of
the Notes upon the terms set forth herein and in the Indenture, (ii) the
execution, delivery and due performance by the Authority of this
Purchase Contract, the Notes, the Indenture, and the Agreement, and
(iii) the taking of any and all such actions as may be required on the
part of the Authority to carry out, give effect to and consummate the
transactions contemplated by such instruments including the use of the
Placement Memorandum. All consents or approvals of any court or
governmental agency or body, if any, necessary to be obtained by the
Authority in connection with the foregoing have been received, and the
consents or approvals so received, if any, are still in full force and
effect; provided that (x) the Authority makes no representation or
warranty as to any required consents or approvals under the Blue Sky or
other securities laws or regulations of any jurisdiction in connection
with the offer and sale of the Notes to or by the Initial Purchasers and
(y) an order of the Treasurer of the State of Maine pursuant to Section
1044(2) of the Act must be obtained prior to the Closing.
(d) The Note Resolution has been duly adopted by the Authority and
is in full force and effect. This Purchase Contract when executed and
delivered by the parties hereto constitutes, and the Indenture and the
Agreement, when duly executed and delivered by the parties thereto, will
constitute legal, valid and binding obligations of the Authority
enforceable in accordance with their respective terms, except that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws heretofore or hereafter
enacted affecting creditors' rights, and is subject to the application
of principles of equity relating to or affecting the enforcement of
contractual obligations, whether such enforcement is considered in a
proceeding in equity or at law, and no representation is made as to the
availability of any particular remedy.
(e) When duly authenticated by the Trustee, delivered to the
Initial Purchasers and paid for at the Closing in accordance with the
provisions of this Purchase Contract, the Notes will have been duly
authorized, executed, issued and delivered and will constitute legal,
valid and binding limited obligations of the Authority in conformity
with the laws of the State of Maine, including the Act, will be entitled
to the benefit and security of the Agreement and the Indenture, and will
be enforceable in accordance with their terms, except that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws heretofore or hereafter
enacted affecting creditors' rights, and is subject to the application
of principles of equity relating to or affecting the enforcement of
contractual obligations, whether such enforcement is considered in a
proceeding in equity or at law, and no representation is made as to the
availability of any particular remedy.
(f) Neither the adoption by the Authority of the Note Resolution,
the execution and delivery by the Authority of this Purchase Contract,
the Notes, the Indenture or the Agreement, nor the consummation of the
transactions contemplated therein or the compliance with the provisions
thereof by or on the part of the Authority, will conflict with, or
constitute on the part of the Authority a violation of, or a breach of
or default under, any statute, indenture, mortgage, commitment, note or
other agreement or instrument to which the Authority is a party or by
which it is bound, or under any provision of the Maine Constitution or
under any existing law, rule, regulation, resolution, charter, judgment,
order or decree to which the Authority is subject.
(g) To the best of the Authority's knowledge, there is no action,
suit, proceeding, inquiry or investigation, at law or in equity, before
or by any court, public board or body, pending or threatened against the
Authority, which in any way questions or otherwise affects the corporate
existence of the Authority, or the titles of its officers to their
respective offices, the powers of the Authority referred to in paragraph
(a) above, or the validity of any proceedings taken by the Authority in
connection with the issuance of the Notes, or wherein an unfavorable
decision, ruling or finding would materially adversely affect the
transactions contemplated by, or the validity or enforceability of, the
Note Resolution, the Indenture, the Agreement, the Notes or this
Purchase Contract.
(h) By official action of the Authority prior to the acceptance
hereof, the Authority has duly authorized the Preliminary Private
Placement Memorandum and the Private Placement Memorandum. As of the
respective dates of the Preliminary Private Placement Memorandum and the
Private Placement Memorandum, and as of the time of the Authority's
acceptance hereof, the information contained in the Preliminary Private
Placement Memorandum and the Private Placement Memorandum under the
caption The Authority" is true, correct and complete in all material
respects, and such information in the Preliminary Private Placement
Memorandum and the Private Placement Memorandum does not contain any
untrue or misleading statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. As of the
Closing Date, the information contained in the Placement Memorandum
under the caption The Authority," as supplemented or amended in
accordance with Section 5 hereof, will not contain any untrue statement
of a material fact or omit to state any material fact which should be
included therein for the purposes for which the Placement Memorandum is
to be used or which is necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents and warrants to and agrees with the Initial Purchasers, as
of the date hereof and as of the date of the Closing, as follows:
(a) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Maine,
qualified to do business in Maine, and with full corporate power to own
the Company's properties and conduct the Company's business. The
purposes for which the proceeds of the Notes will be used by the Company
will constitute an "electric rate stabilization project" within the
meaning of the Act. The Company has full legal right, power and
authority to execute and deliver this Purchase Contract, the Agreement
and the Second Mortgage Bonds, to authorize the distribution and use of
the Preliminary Private Placement Memorandum and the Private Placement
Memorandum, to provide for the buy back of the power purchase agreements
between the Company and (i) Babcock-Ultrapower West Enfield and (ii)
Babcock-Ultrapower Jonesboro, and to take any and all such action as
may be required on its part to carry out, give effect to and consummate
the transactions contemplated by this Purchase Contract, the Second
Mortgage Bonds and the Agreement.
(b) The Company has duly authorized, executed and delivered this
Purchase Contract, and on the Closing Date will have duly authorized,
executed and delivered the Second Mortgage Bonds and the Agreement, and
has taken all such action as may be required on the part of the Company
to carry out, give effect to and consummate the transactions
contemplated by each of such documents. This Purchase Contract
constitutes, and the Agreement and the Second Mortgage Bonds, when
executed and delivered, will constitute legal, valid and binding
obligations of the Company, enforceable in accordance with their
respective terms, except that enforceability may be limited by laws
relating to bankruptcy, reorganization or other similar laws affecting
the rights of creditors or by equitable principles which may affect the
availability of specific performance or other equitable remedies.
(c) Neither the execution and delivery of this Purchase Contract,
the Agreement or the Second Mortgage Bonds, nor the consummation of the
transactions contemplated therein or the compliance with the provisions
thereof, will conflict with, or constitute on the part of the Company a
violation of, or a breach of or default under the Company's Articles of
Incorporation or By-laws or any material indenture, mortgage,
commitment, note or other agreement or instrument to which the Company
is a party or by which the Company is bound, or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its activities or properties.
All consents, approvals, authorizations and orders of governmental or
regulatory authorities which are required for the Company's execution
and delivery of, consummation of the transactions contemplated by and
compliance with the provisions of this Purchase Contract, the Agreement
and the Second Mortgage Bonds have been obtained, including without
limitation all necessary approving orders of the Maine Public Utilities
Commission ( MPUC").
(d) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board
or body, pending or, to the best of the knowledge of the Company,
threatened, against or affecting the Company, or the actions taken or
contemplated to be taken by the Company, nor, to the best of the
knowledge of the Company, is there any basis therefor, wherein an
unfavorable decision, ruling or finding would materially adversely
affect the business, financial condition or operations of the Company,
or the transactions contemplated by, or the validity or enforceability
of, this Purchase Contract, the Agreement and the Second Mortgage Bonds.
(e) No event has occurred and no condition exists which, upon
issuance of the Notes, would constitute (or with the giving of notice or
lapse of time, or both, would constitute) an Event of Default under the
Agreement.
(f) The Company is not in violation of any provisions of, or in
default under, its Articles of Incorporation or ByLaws and is not in
violation of any provision or in default of any statute, indenture,
mortgage, commitment, note or other agreement or instrument to which it
is a party or by which it is bound, or any order, rule, regulation or
decision of any court or governmental agency or body having jurisdiction
over it or any of its activities or properties, which violation would
materially and adversely affect its business or financial condition.
(g) The information contained in the Preliminary Private Placement
Memorandum and the Private Placement Memorandum (except for the
information and statements pertaining to the Authority under the
captions "The Authority" and "Plan of Offering" as to which the Company
makes no representations) was or will be, as of their respective dates,
and as of the Closing Date will be, true, correct and complete in all
material respects, and the Preliminary Private Placement Memorandum and
the Private Placement Memorandum do not and will not contain any untrue
or misleading statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided,
however, that the Company makes no representation or warranty as to the
information contained in or omitted from the Placement Memorandum in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchasers through the
Representative specifically for inclusion therein.
(h) The Company will furnish such information, execute such
instruments, and cooperate with the Initial Purchasers as the Initial
Purchasers may reasonably request in order for the Initial Purchasers
(i) to qualify the Notes, or perfect an exemption from registration, for
offer and sale of the Notes under the Blue Sky or other securities laws
and regulations of such states and other jurisdictions of the United
States as the Initial Purchasers may designate, and (ii) to determine
the eligibility of the Notes for investment under the laws of such
states and other jurisdictions, and the Company will use its best effort
to continue such exemption or qualification in effect so long as
required for distribution of the Notes.
(i) Any certificate signed by any officer of the Company and
delivered to the Authority, Note Counsel, and the Initial Purchasers of
the Notes at or before the Closing Date shall be deemed a representation
and warranty by the Company to the Authority, Note Counsel, and the
Initial Purchasers as to the truth of the statements therein contained.
(j) Neither the Company, nor any of its Affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act ("Regulation D")),
nor any person acting on its or their behalf has, directly or
indirectly, made offers or sales of any Note, or solicited offers to buy
any Note, under circumstances that would require the registration of the
Notes under the Securities Act.
(k) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Notes in the United States.
(l) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(m) The Company is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), without taking account of any exemption arising out of
the number of holders of the Company's securities.
(n) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(o) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Purchase Contract).
(p) So long as any of the Notes are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, during any period in which it is not subject to and in compliance
with Section 13 or 15(d) of the Exchange Act or it is not exempt from
such reporting requirements pursuant to and in compliance with Rule
12g3-2(b) under the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated
by such holder) of such restricted securities, upon the request of such
holder or prospective purchaser, any information required to be provided
by Rule 144A(d)(4) under the Securities Act. This covenant is intended
to be for the benefit of the Initial Purchasers and the prospective
purchasers designated by such Initial Purchasers, from time to time of
such Notes.
(q) If at any time prior to the completion of the sale of the
Notes by the Initial Purchasers (as determined by the Representative),
any event occurs as a result of which the Placement Memorandum, as then
amended or supplemented, would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it should be necessary to amend or
supplement the Placement Memorandum to comply with applicable law, the
Company will promptly notify the Representative of the same and prepare
and provide to the Representative an amendment or supplement which will
correct such statement or omission or effect such compliance.
(r) The Company was not required or coerced by any Initial
Purchaser or any affiliate of any Initial Purchaser to designate or to
cause to be designated any Initial Purchaser as a purchaser of the
Notes, as a condition to the extension of credit by such Initial
Purchaser or an affiliate thereof.
8. CERTAIN CONDITIONS TO INITIAL PURCHASERS OBLIGATIONS. The
obligations of the Initial Purchasers to purchase and pay for the Notes to be
sold to the Initial Purchasers at the Closing shall be subject to (i) the
performance by the Authority of its obligations to be performed hereunder,
(ii) the performance by the Company of its obligations under the Agreement to
be performed at and prior to the Closing and (iii) the fulfillment to the
Initial Purchasers' satisfaction, prior to or at the Closing with respect to
the Notes, of the following conditions:
(a) The representations and warranties of the Authority and the
Company herein shall be true on and as of the date of the Closing and
shall be confirmed by appropriate certificates at Closing as may be
reasonably requested by the Purchasers;
(b) None of the Authority or the Company shall be in default in
the performance of any of their respective covenants pursuant to the
Indenture, the Agreement or herein;
(c) At the time of Closing (i) the Indenture, the Agreement, the
Second Mortgage Bonds, and the Global Note shall have been duly
authorized, executed and delivered by the respective parties thereto,
shall be in full force and effect and shall not have been amended,
modified or supplemented except as may have been agreed to in writing by
the Initial Purchasers and (ii) the Authority and the Company shall have
duly adopted and there shall be in full force and effect such
authorizations as shall be necessary in connection with the transactions
contemplated hereby;
(d) At the Closing Date, (i) any Authority action in connection
with the Notes and the approval of the Project (as defined in the
Placement Memorandum) by the MPUC shall be final and no longer subject
to appeal or reconsideration and (ii) the MPUC approval of the borrowing
by the Company under the Agreement shall be final and no appeal of such
approval of the borrowing shall affect the validity of the Second
Mortgage Bonds.
(e) At or prior to the Closing, the Initial Purchasers shall have
received two (2) executed or otherwise certified copies of each of the
following documents, in form and substance satisfactory to the Initial
Purchasers and their counsel:
(i) an opinion or opinions of Hawkins, Delafield & Wood,
Note Counsel to the Authority, dated the date of the Closing,
addressed to the Initial Purchasers (or addressed to the Authority
with appropriate reliance letters to the Company and the Initial
Purchasers) to the effect that: (1) the Authority has been duly
created and is validly existing under the Act, and has good right
and lawful authority to loan funds to the Company and to receive
and pledge the repayments of such loan and other amounts therefrom
in accordance with the terms of the Agreement and as provided in
the Indenture; (2) the Authority has the right and power pursuant
to the Act to enter into the Agreement and the Indenture, and the
Agreement and the Indenture have each been duly authorized,
executed and delivered by the Authority, are in full force and
effect, and constitute valid and binding agreements of the
Authority enforceable against the Authority in accordance with
their terms (subject to customary enforceability exceptions); (3)
the Notes have been duly authorized and issued by the Authority in
accordance with law and the terms of the Indenture and are valid
and binding special obligations of the Authority payable solely out
of the Trust Estate under the Indenture for the payment thereof,
and the Notes are enforceable in accordance with their terms and
the terms of the Indenture and conditions precedent to the delivery
of the Notes have been fulfilled (subject to customary
enforceability exceptions); (4) the Indenture creates the valid
pledge and assignment to the Trustee which it purports to create of
all of the Authority's right, title and interest in the Second
Mortgage Bonds and the Agreement (except the rights specifically
reserved thereunder); (5) the Notes are not subject to the
registration requirements of the Securities Act, and the Indenture
is exempt from qualification pursuant to the Trust Indenture Act;
and (6) (x) the information contained in the Placement Memorandum
under the captions "The Notes" (other than under "Book-Entry Only
System"), "Security for the Notes," "Tax Matters," and "Legality
for Investment" does not contain any untrue or misleading statement
of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they are made, not misleading, and (y) the statements
contained in the Placement Memorandum (other than under the
foregoing sections identified in clause (x) above) with respect to
the Notes and the Capital Reserve Fund (as defined in the
Indenture), the obligations of the Authority and the State of Maine
with respect to the Notes and the Capital Reserve Fund, and the
information contained in Exhibit B and Exhibit C to the Placement
Memorandum, insofar as such statements purport to summarize certain
provisions of law and of the Indenture and the Agreement, present a
fair and accurate summary of such provisions for the purpose of use
in the Placement Memorandum;
(ii) an opinion of Frederick S. Samp, Esq., General
Counsel to the Company dated the date of Closing, addressed to the
Authority and the Initial Purchasers, to the effect that: (1) the
Company is a corporation validly existing and in good standing
under the laws of the State of Maine, with full corporate power and
authority to execute, deliver and perform its obligations under the
Second Mortgage Bonds, the Agreement, and this Purchase Contract
(together, the "Company Documents"), and each has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company enforceable in
accordance with its terms, except to the extent that the
indemnification provisions of the Company Documents may be
unenforceable; (2) the Company has power to carry on its business
in Maine as presently conducted and as contemplated by the
Placement Memorandum and the Company Documents; (3) except for
those which have been obtained, no consent of or authorization by
or license or approval of or registration or declaration with any
governmental authority is required in connection with the
execution, delivery and performance by the Company of, or the
validity or enforceability of, any of the Company Documents; (4)
the execution and delivery of the Company Documents and the
performance of its obligations thereunder by the Company have not
resulted and will not result in a violation of any law or
regulation or of the certificate of incorporation of the Company or
its by-laws or constitute a default under any indenture, mortgage,
deed, trust agreement or other instrument known to them which the
Company is a party or by which it is bound; (5) the Company has
duly authorized the taking of any and all action necessary to carry
out and give effect to the transactions contemplated to be
performed on its part by the Company Documents; (6) there is no
action, suit, proceeding or investigation at law or in equity
before any court, public board or body, pending or threatened
against or affecting the Company, nor is there any basis therefor,
wherein an unfavorable decision, ruling or finding would adversely
affect the transactions contemplated by the Company Documents or
the validity or enforceability of any of such documents; (7) (x)
the information contained in the Placement Memorandum under the
captions "The Borrower," "The Project," "Concurrent Financing"
and "Risk Factors" does not contain any untrue or misleading
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (y)
without passing upon or assuming responsibility for the accuracy,
completeness or fairness of the statements contained in the
Placement Memorandum (except as set forth in clause (x) above), and
without having undertaken to independently verify the accuracy,
completeness or fairness of such statements, nothing has come to
his attention which leads him to believe that the Placement
Memorandum as of its date, contained any untrue or misleading
statement of a material fact or omitted to state any material fact
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading (other than
financial and statistical data, as to which he need express no
opinion);
(iii) an opinion of Winthrop, Stimson, Putnam & Roberts,
special counsel to the Company dated the date of Closing, addressed
to the Initial Purchasers and the Authority, to the effect that (1)
the information contained in the Placement Memorandum under the
captions "The Borrower," "The Project," "Concurrent Financing"
and "Risk Factors" does not contain any untrue or misleading
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (2)
without passing upon or assuming responsibility for the accuracy,
completeness or fairness of the statements contained in the
Placement Memorandum (except as set forth in clause (1) above), and
without having undertaken to independently verify the accuracy,
completeness or fairness of such statements, nothing has come to
their attention which leads them to believe that the information
with respect to the Company contained in the Placement Memorandum
as of its date, contained any untrue or misleading statement of a
material fact or omitted to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they are made, not misleading (other than financial and
statistical data, as to which they need express no opinion);
(iv) a certificate of an authorized officer of the
Authority, dated the date of the Closing, addressed to the Initial
Purchasers, to the effect that the representations and warranties
of the Authority in Section 6 of this Purchase Contract are true
and correct as of the date hereof and as of the date of the
Closing;
(v) a certificate of the Company dated the date of the
Closing and signed by an authorized official of the Company,
addressed to the Initial Purchasers and the Authority, to the
effect that the representations and warranties of the Company
included in Section 7 of this Purchase Contract are true and
correct as of the date hereof and as of the date of the Closing;
(vi) opinions, dated the date of the Closing, of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and Preti, Flaherty,
Beliveau & Pachios, co-counsel to the Initial Purchasers, addressed
to the Initial Purchasers, in form satisfactory to the Initial
Purchasers;
(vii) the Placement Memorandum;
(viii) executed or certified copies of the Indenture, the
Agreement, the Second Mortgage Bonds, and the Global Note;
(ix) a certificate of one or more duly authorized
officers of the Trustee dated the date of Closing, as to the due
acceptance of the Indenture by the Trustee and the due
authentication and delivery of the Global Note by the Trustee
thereunder and as to payment for the Notes;
(x) a certificate, dated the date of Closing, of an
officer of the Trustee to the effect that: (1) the Trustee has
been duly organized, is validly existing and is in good standing
under the laws of the State of Connecticut, has the power and
lawful authority to act as a trustee and may validly and legally
execute the Indenture and accept the duties and obligations
established thereunder; and (2) the Trustee has duly accepted the
duties and obligations of Trustee imposed upon the Trustee by the
Indenture and has duly executed and delivered the Indenture and it
is a valid, binding and enforceable obligation of the Trustee;
(xi) an opinion or opinions of counsel to the Trustee,
dated the date of Closing and addressed to the Initial Purchasers
and to the Authority, to the effect that: (1) the Trustee is duly
organized, validly existing and in good standing under the laws of
the State of Connecticut; (2) the Trustee is lawfully empowered and
authorized to execute the Indenture and to carry out its duties and
obligations as Trustee under, and to accept the duties and
obligations contemplated by, the Indenture; (3) the Trustee has
duly authorized the acceptance of the duties and obligations
contemplated by the Indenture and has duly accepted the duties and
obligations of Trustee thereunder; (4) the Trustee has duly
authorized and executed the Indenture; and (5) the Indenture
constitutes a valid and legally binding obligation of the Trustee,
enforceable in accordance with its terms;
(xii) evidence satisfactory to the Initial Purchasers to
the effect that since the date of this Purchase Contract there has
been no reduction in any rating accorded to the Company's debt
securities by any "nationally recognized statistical rating
organization," as that term is defined by the Securities and
Exchange Commission for purposes of Rule 436(g)(2) under the
Securities Act, and no such organization shall have publicly
announced that it has placed any debt securities of the Company on
what is commonly termed a "watch list" for possible down-grading;
(xiii) a letter from the Company s auditors, dated a date
not less than five (5) business days prior to the Closing,
addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers;
(xiv) an opinion of counsel to the Authority, dated the
date of the Closing, addressed to the Initial Purchasers and the
Company, to the effect that the information contained in the
Placement Memorandum under the caption entitled "The Authority," as
of the date of the Placement Memorandum and as of the date of the
Closing, does not contain any untrue or misleading statement of a
material fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading; and
(xv) other certificates of the Authority and the Company
and such additional certificates, proceedings, instruments and
other documents as the Initial Purchasers may reasonably request to
evidence compliance by the Authority and the Company with legal
requirements, the truth and accuracy, as of the time of Closing, of
the respective representations of the Authority contained in the
Indenture, the Agreement and herein and of the Company contained in
the Agreement and the due performance or satisfaction by the
Authority and the Company at or prior to such time of all
agreements then to be performed and all conditions then to be
satisfied by the Authority and the Company.
All such opinions, certificates, letters, agreements and documents will
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the Initial Purchasers and their counsel.
9. TERMINATION. The Initial Purchasers shall have the right to cancel
their obligation to purchase the Notes if:
(a) Legislation shall be favorably reported by a Committee of the
House of Representatives or the Senate of the Congress of the United
States or be introduced by committee, by amendment or otherwise, in, or
be enacted by, the House of Representatives or the Senate, or be
recommended by the President of the United States or by committee of the
House of Representatives or the Senate to the Congress of the United
States for passage by the Congress of the United States, or a decision
by a court of the United States shall be rendered, or a stop order,
ruling, regulation or official statement by, or on behalf of, the United
States Securities and Exchange Commission or other governmental agency
having jurisdiction of the subject matter shall be made or proposed, to
the effect that the offering or sale of obligations of the general
character of the Notes, as contemplated hereby, is or would be in
violation of any provision of the Securities Act as then in effect or
the Securities Exchange Act of 1934, as amended and as then in effect
(the "Exchange Act"), or that the Indenture shall be required to be
qualified under the Trust Indenture Act, or with the purpose or effect
of otherwise prohibiting the offering or sale of obligations of the same
general character of the Notes, or of the Notes, as contemplated hereby,
without registration under the Securities Act or qualification of the
Trust Indenture under the Trust Indenture Act ; or
(b) Any information shall have become known, which, in the Initial
Purchasers' reasonable opinion, makes untrue, incorrect or misleading in
any material respect any statement or information contained in the
Placement Memorandum, as then supplemented or amended in accordance with
Section 5 hereof, or causes the Placement Memorandum, as so supplemented
or amended, to contain any untrue statement of a material fact or to
omit to state a material fact necessary to make the statements made, in
light of the circumstances under which they were made, not misleading;
or
(c) Legislation shall be favorably reported by a committee of the
House of Representatives or the Senate of the Congress of the United
States or be introduced by committee, by amendment or otherwise, in, or
be enacted by, the House of Representatives or the Senate, or be
recommended by the President of the United States or by committee of the
House of Representatives or the Senate to the Congress of the United
States for passage by the Congress of the United States or any
legislation, regulation, ordinance, rule or resolution shall be enacted,
by any federal governmental body, department or agency of the United
States that would adversely effect the validity and enforceability of
the Notes; or
(d) Except as provided in clause (a) hereof, any legislation,
resolution, ordinance, rule or regulation shall be introduced in, or be
enacted by, any federal governmental body, department or agency of the
United States, or a decision by any court of competent jurisdiction
within the United States shall be rendered which, in the Initial
Purchasers sole judgment, materially adversely affects the
marketability of the Notes; or
(e) Additional restrictions not in force as of the date hereof
shall have been imposed upon trading in securities in the U.S. generally
by any governmental authority or by any national securities exchange
which, in the Initial Purchasers sole judgment, materially adversely
affects the marketability of the Notes; or
(f) Any U.S. governmental authority shall impose, as to the Notes,
or obligations of the general character of the Notes, any restrictions
on the Notes not now in force, or increase those now in force which, in
the Initial Purchasers sole judgment, materially adversely affects the
marketability of the Notes; or
(g) There shall have been an outbreak or escalation of hostilities
or any calamity or crisis having an effect on the financial markets or
the market for the Notes and other similar securities that, in the sole
judgment of the Initial Purchasers, makes it impracticable to proceed
with the offering or the delivery of the Notes as contemplated herein
and by the Placement Memorandum; or
(h) Any state "blue sky" or securities commission shall have
withheld registration, exemption or clearance of the offering, and, in
the reasonable judgment of the Initial Purchasers, the market for the
Notes is materially affected thereby.
If the Authority or the Company shall be unable to satisfy any of the
conditions to the obligations of the Initial Purchasers contained in this
Purchase Contract and such condition is not waived by the Initial Purchasers,
or if the obligations of the Initial Purchasers to purchase and accept
delivery of the Notes shall be terminated or canceled for any reason
permitted by this Purchase Contract, this Purchase Contract shall terminate
and neither the Initial Purchasers nor the Authority shall be under further
obligation hereunder; except that the respective obligations to pay expenses,
as provided in Section 13 hereof, shall continue in full force and effect.
10. INDEMNIFICATION. The Company shall indemnify and hold harmless the
Initial Purchasers, the Authority and each of their respective directors,
officers, employees and agents and each person, if any, who controls the
Initial Purchasers within the meaning of Section 15 of the Securities Act
(any such person being herein sometimes called an "Indemnified Party"),
against any and all losses, claims, damages or liabilities, joint or several,
to which such Indemnified Party may become subject under any statute or at
law or in equity or otherwise, and shall reimburse any such Indemnified Party
for any legal or other expenses incurred by it in connection with
investigating any claims against it and defending any actions, but only to
the extent that such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in the Placement Memorandum, as amended or
supplemented in accordance with Section 5 hereof, or the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement of a material fact or omission of a material fact or
alleged omission of a material fact made in reliance upon and in conformity
with written information furnished to the Company or the Authority by or on
behalf of the Initial Purchasers specifically for use in the Placement
Memorandum, and provided, further, that the Company shall not be liable to
the Authority, or its directors, officers, employees or agents, in any such
case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact or omission of a material fact or alleged
omission of a material fact made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Authority
specifically for use in the Placement Memorandum. This indemnity agreement
shall not be construed as a limitation on any other liability which the
Company may otherwise have to any Indemnified Party provided that in no event
shall the Company be obligated for double indemnification.
Promptly after receipt by an Indemnified Party under this Section 10 of
notice of the commencement of any action or proceeding (including a
governmental investigation), such Indemnified Party will, if a claim in
respect thereof is to be made against the Company under this Section 10,
notify the Company of the commencement thereof; but the omission so to notify
the Company (i) will not relieve it from any liability under this Section 10
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the Company of substantial rights and
defenses and (ii) will not, in any event, relieve the Company from any
obligations to any Indemnified Party other than the indemnification
obligation provided in this Section 10. In case any such action is brought
against any Indemnified Party, and it notifies the Company of the
commencement thereof, the Company will be entitled to participate therein
and, to the extent that it may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party; provided, however,
that if the defendants in any such action include both the Indemnified Party
and the Company and the Indemnified Party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
Indemnified Parties which are different from or additional to those available
to the Company, the Company shall not have the right to direct the defense of
such action on behalf of such Indemnified Party or Parties and such
Indemnified Party or Parties shall have the right to select separate counsel
to defend such action on behalf of such Indemnified Party or Parties. After
notice from the Company to such Indemnified Party of its election so to
assume the defense thereof and approval by such Indemnified Party of counsel
appointed to defend such action, the Company will not be liable to such
Indemnified Party under this Section 10 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
Indemnified Party in connection with the defense thereof, unless (i) the
Indemnified Party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the Company shall not be liable for the expenses
of more than one separate counsel (in addition to local counsel) in any one
action or separate but substantially similar actions in the same jurisdiction
arising out of the same general allegations or circumstances, designated by
the Initial Purchasers, representing the Indemnified Parties under this
Section 10 who are parties to such action or actions) or (ii) the Company has
authorized the employment of counsel for the Indemnified Party at the expense
of the Company. After such notice from the Company to such Indemnified
Party, the Company will not be liable for the costs and expenses of any
settlement of such action effected by such Indemnified Party without the
consent of the Company (which consent shall not, in light of such action and
the defenses available to the Indemnified Party, be unreasonably withheld),
unless such Indemnified Party waived its rights under this Section 10 in
which case the Indemnified Party may effect such a settlement without such
consent.
11. DEFAULT OF INITIAL PURCHASERS. If one or more of the Initial
Purchasers default in their obligations to purchase Notes hereunder and the
aggregate principal amount of such Notes that such defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase is seven and
five tenths percent (7.5%) or less of the aggregate principal amount of Notes
to be purchased by all of the Initial Purchasers at such time hereunder, the
other Initial Purchasers may make arrangements satisfactory to the
Representative for the purchase of such Notes by other persons (who may
include one or more of the non-defaulting Initial Purchasers), but if no such
arrangements are made by the date of the Closing, the other Initial
Purchasers shall be obligated severally in proportion to their respective
commitments hereunder to purchase the Notes that such defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase. If one or
more Initial Purchasers so defaults and the aggregate principal amount of
Notes that such defaulting Initial Purchaser or Initial Purchasers agreed but
failed to purchase is more than ten percent of the aggregate principal amount
of Notes to be purchased by all the Initial Purchasers at such time
hereunder, and if arrangements satisfactory to the Representative are not
made within 36 hours after such default for the purchase by other persons
(who may include one or more of the non-defaulting Initial Purchasers) of the
Notes with respect to which such default occurs, this Purchase Contract will
terminate without liability on the part of any non-defaulting Initial
Purchaser or the Company or the Authority other than as provided in Section
12 hereof. In the event of any default by one or more Initial Purchasers as
described in this Section 11, the Representative shall have the right to
postpone the Closing as provided in Section 3 hereof for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Notes. As
used in this Agreement, the term "Initial Purchaser" includes any person
substituted for an Initial Purchaser under this Section 11. Nothing herein
shall relieve any defaulting Initial Purchaser from liability for its
default.
12. SURVIVAL OF REPRESENTATIONS. The respective representations,
warranties, agreements, covenants, indemnifications and other statements of
the Company, the Authority, their respective officers and officials and the
Initial Purchasers set forth in the Indenture, the Agreement, or herein, or
made by or on behalf of them, respectively, pursuant to this Purchase
Contract, shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of the Initial Purchasers, any of
their directors, officers, officials, employees or agents or any controlling
person referred to in Section 10 hereof, and (ii) delivery and payment for
the Notes. The respective agreements, covenants, indemnities and other
statements set forth in Section 10 and 13 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Purchase
Contract.
13. PAYMENT OF EXPENSES. The Initial Purchasers shall have no
obligation for the payment of any expenses or costs to effect the
authorization, issuance, sale and delivery of the Notes other than their
internal operating expenses except as expressly set forth herein.
Upon the sale of the Notes by Authority to the Initial Purchasers, the
Initial Purchasers shall be under no obligation to pay any expenses incident
to the performance of the obligations of the Authority hereunder. All
expenses and costs to effect the authorization, preparation, issuance,
delivery and sale of the Notes shall be paid by the Company, irrespective of
whether the Notes are issued other than as a result of a default by any of
the Initial Purchasers (in which case the defaulting Initial Purchaser shall
pay all costs, expenses and damages related to its default and actions taken
pursuant to this Purchase Contract in respect thereof). Such costs and
expenses include, but shall not be limited to: (a) the fees and expenses of
the Initial Purchasers co-counsel, (b) the costs and expenses for the
preparation, printing, photocopying, execution and delivery of this Purchase
Contract, the Placement Memorandum, and the Financing Documents and other
agreements and documents contemplated hereby and such other expenses incurred
by the Initial Purchasers in connection with the transactions contemplated
hereby, (c) the fees of the Authority, (d) the fees of the Trustee and its
counsel and (e) the fees of Hawkins, Delafield & Wood, as Note Counsel.
14. NOTICES. Any notice or other communication to be given under this
Purchase Contract shall be given in writing and mailed, telegraphed,
telecopied or delivered to:
FOR THE INITIAL PURCHASERS:
Prudential Securities Incorporated
One New York Plaza, 14th Floor
New York, NY 10292-2014
Attention: Aaron M. Barman
Telephone: (212) 778-4774
Telecopier: (212) 778-3443
THE AUTHORITY:
Finance Authority of Maine
83 Western Avenue
P.O. Box 949
Augusta, ME 04332-0949
Attention: Tim Agnew
cc: Duncan MacKellar
Telephone: (207) 623-3263
Telecopier: (207) 623-0095
THE COMPANY:
Bangor Hydro-Electric Company
33 State Street
P. O. Box 932
Bangor, Maine 04402-0932
Attention: Robert Weiser
Telephone: (207) 990-6925
Telecopier: (207) 990-6954
15. PARTIES; SUCCESSORS. This Purchase Contract shall inure to the
benefit of and shall be binding upon the Authority, the Company and the
Initial Purchasers, and their respective successors and legal
representatives, and nothing expressed or mentioned in this Purchase Contract
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Purchase
Contract, or any provisions herein contained, this Purchase Contract and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons except that the indemnities of the
Company contained in Section 10 of this Purchase Contract shall also be for
the benefit of the directors, officers, employees and agents of the Authority
and any Initial Purchaser and any person or persons who control any Initial
Purchaser within the meaning of Section 15 of the Securities Act.
16. NO PECUNIARY LIABILITY OF AUTHORITY. No provision, covenant, or
agreement contained in this Purchase Contract, and no obligation herein
imposed upon the Authority, or the breach thereof, shall constitute an
indebtedness of the Authority or the State of Maine or any political
subdivision thereof or give rise to a pecuniary liability of the Authority or
the State of Maine or any political subdivision thereof. In making the
agreements, provisions and covenants set forth in this Purchase Contract, the
Authority has not obligated itself, except to the extent that the Authority
is authorized to act pursuant to Maine law and except with respect to the
Trust Estate. The Authority and any of its officials, officers, employees,
members or agents shall have no monetary liability arising out of the
obligations of the Authority hereunder or in connection with any covenant,
representation or warranty made by the Authority herein, and neither the
Authority nor its officials shall be obligated to pay any amounts in
connection with the transactions contemplated hereby other than from the
Trust Estate.
17. GOVERNING LAW. This Purchase Contract will be governed by and
construed in accordance with the laws of the State of Maine.
18. GENERAL. This Purchase Contract constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof. This
Purchase Contract may be executed in several counterparts, each of which
shall be regarded as an original and all of which will constitute one and the
same instrument. The section headings of this Purchase Contract are for
convenience of reference only and shall not affect its interpretation.
IN WITNESS WHEREOF, the Authority, the Company and the Initial
Purchasers have caused this Purchase Contract to be duly executed and
delivered by their representatives thereunto duly authorized to be effective
as of the date first above written.
FINANCE AUTHORITY OF MAINE
By: s/Timothy P. Agnews
--------------------
Title: Chief Executive Officer
BANGOR HYDRO-ELECTRIC COMPANY
By: s/Robert C. Weiser
--------------------
Title: Treasurer
PRUDENTIAL SECURITIES, INC.
CHEMICAL SECURITIES INC.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
By: PRUDENTIAL SECURITIES, INC.
By: s/Aaron M. Barman
--------------------
Title: Managing Director
EXHIBIT A
Principal Amount of Taxable
Electric Rate Stabilization
Revenue
Notes Series 1995A (Bangor Hydro-
Initial Purchaser Percentage (Electric Company)
---------------------------------- ----------- ------------------
Prudential Securities Incorporated 77.5% $96,956,685
Chemical Securities Inc. 7.5 9,382,905
PaineWebber Incorporated 7.5 9,382,905
Smith Barney, Inc. 7.5 9,382,905
FINANCE AUTHORITY OF MAINE
Taxable Electric Rate Stabilization Revenue Notes
Series 1995A (Bangor Hydro-Electric Company)
Schedule I to Purchase Contract
Deposit to Project Loan Fund $103,239,477.76
Deposit to Capital Reserve Fund 21,191,940.00
Costs of Issuance 673,982.24
---------------
Purchase Price $125,105,400.00
GENERAL AND REFUNDING MORTGAGE INDENTURE
AND
DEED OF TRUST
BANGOR HYDRO-ELECTRIC COMPANY
TO
CHEMICAL BANK,
AS TRUSTEE
DATED AS OF
JUNE 1, 1995
TABLE OF CONTENTS
PAGE
----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. General Definitions. . . . . . . . . . . . . . . . . . . . . 7
Section 1.02. Bonded; Funded Cash . . . . . . . . . . . . . . . . . . . 23
Section 1.03. Net Earnings Certificate; Adjusted Net
Earnings; Annual Interest Requirements . . . . . . . . . . 24
Section 1.04. Property Additions; Cost. . . . . . . . . . . . . . . . . 27
Section 1.05. Compliance Certificates and Opinions. . . . . . . . . . . 30
Section 1.06. Form of Documents Delivered to Trustee. . . . . . . . . . 32
Section 1.07. Acts of Holders . . . . . . . . . . . . . . . . . . . . . 32
Section 1.08. Notices, Etc., to Trustee and Company . . . . . . . . . . 34
Section 1.09. Notice to Holders of Bonds; Waiver. . . . . . . . . . . . 35
Section 1.10. Conflict with Trust Indenture Act . . . . . . . . . . . . 35
Section 1.11. Effect of Headings and Table of Contents. . . . . . . . . 36
Section 1.12. Successors and Assigns. . . . . . . . . . . . . . . . . . 36
Section 1.13. Separability Clause . . . . . . . . . . . . . . . . . . . 36
Section 1.14. Benefits of Indenture . . . . . . . . . . . . . . . . . . 36
Section 1.15. Governing Law . . . . . . . . . . . . . . . . . . . . . . 36
Section 1.16. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . 36
Section 1.17. Investment of Cash Held by Trustee. . . . . . . . . . . . 37
Section 1.18. Approval of Signers . . . . . . . . . . . . . . . . . . . 37
ARTICLE TWO
BOND FORMS
Section 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . 38
Section 2.02. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE THREE
THE BONDS
Section 3.01. Limit on Amount of Bonds; Issuable in Series. . . . . . . 39
Section 3.02. Denominations . . . . . . . . . . . . . . . . . . . . . . 42
Section 3.03. Execution, Dating, Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . 42
Section 3.04. Temporary Bonds . . . . . . . . . . . . . . . . . . . . . 43
Section 3.05. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . . . . . . . . . 44
Section 3.06. Mutilated, Destroyed, Lost and Stolen Bonds . . . . . . . 45
Section 3.07. Payment of Interest; Interest Rights
Preserved. . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.08. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 48
Section 3.09. Cancellation by Bond Registrar. . . . . . . . . . . . . . 48
Section 3.10. Computation of Interest . . . . . . . . . . . . . . . . . 48
Section 3.11. Payment to Be in Proper Currency. . . . . . . . . . . . . 49
ARTICLE FOUR
ISSUANCE OF BONDS
Section 4.01. General . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 4.02. Issuance of Bonds on the Basis of Pledged
Bonds; Disposition and Exchange of Bank
Collateral Bonds . . . . . . . . . . . . . . . . . . . . . 52
Section 4.03. Issuance of Bonds on the Basis of Property
Additions. . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.04. Issuance of Bonds on the Basis of Retired
Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 4.05. Issuance of Bonds Upon Deposit of Cash
with Trustee . . . . . . . . . . . . . . . . . . . . . . . 59
Section 4.06. Issuance of General and Refunding Mortgage
Bonds, Series A. . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE FIVE
REDEMPTION OF BONDS
Section 5.01. Applicability of Article. . . . . . . . . . . . . . . . . 61
Section 5.02. Election to Redeem; Notice to Trustee . . . . . . . . . . 61
Section 5.03. Selection of Bonds to Be Redeemed . . . . . . . . . . . . 61
Section 5.04. Notice of Redemption. . . . . . . . . . . . . . . . . . . 62
Section 5.05. Bonds Payable on Redemption Date. . . . . . . . . . . . . 63
Section 5.06. Bonds Redeemed in Part. . . . . . . . . . . . . . . . . . 63
ARTICLE SIX
REPRESENTATIONS AND COVENANTS
Section 6.01. Payment of Bonds; Lawful Possession;
Maintenance of Lien. . . . . . . . . . . . . . . . . . . . 64
Section 6.02. Maintenance of Office or Agency . . . . . . . . . . . . . 64
Section 6.03. Money for Bond Payments to Be Held in Trust . . . . . . . 65
Section 6.04. Corporate Existence . . . . . . . . . . . . . . . . . . . 67
Section 6.05. Maintenance of Properties . . . . . . . . . . . . . . . . 67
Section 6.06. Payment of Taxes; Discharge of Liens. . . . . . . . . . . 67
Section 6.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 6.08. Recording, Filing, Etc. . . . . . . . . . . . . . . . . . 71
Section 6.09. Limitation on Additional Issuances of
Bonds Under 1936 Mortgage. . . . . . . . . . . . . . . . . 72
Section 6.10 Waiver of Certain Covenants. . . . . . . . . . . . . . . . 72
Section 6.11. Certificate to Trustee. . . . . . . . . . . . . . . . . . 73
ARTICLE SEVEN
PLEDGED BONDS; ADDITIONAL CLASS "A" MORTGAGES;
DISCHARGE OF CLASS "A" MORTGAGE
Section 7.01. Registration and Ownership of Pledged Bonds . . . . . . . 73
Section 7.02. Payments on Pledged Bonds . . . . . . . . . . . . . . . . 73
Section 7.03. Surrender of Pledged Bonds. . . . . . . . . . . . . . . . 74
Section 7.04. No Transfer of Pledged Bonds. . . . . . . . . . . . . . . 74
Section 7.05. Voting of Pledged Bonds and Bank
Collateral Bonds . . . . . . . . . . . . . . . . . . . . . 74
Section 7.06. Designation of Additional Class "A"
Mortgages. . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 7.07. Discharge of Class "A" Mortgage . . . . . . . . . . . . . 78
ARTICLE EIGHT
POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY
Section 8.01. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . 82
Section 8.02. Dispositions Without Release. . . . . . . . . . . . . . . 83
Section 8.03. Release of Mortgaged Property if Bonding
Ratio Test Satisfied . . . . . . . . . . . . . . . . . . . 84
Section 8.04. Release of Limited Amount of Mortgaged
Property . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 8.05. Release of Mortgaged Property Not Subject
to a Class "A" Mortgage. . . . . . . . . . . . . . . . . . 86
Section 8.06. Withdrawal or Other Application of Funded
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 8.07. Release of Property Taken by Eminent
Domain, Etc. . . . . . . . . . . . . . . . . . . . . . . . 91
Section 8.08. Alternative Release Provision . . . . . . . . . . . . . . 92
Section 8.09. Disclaimer or Quitclaim . . . . . . . . . . . . . . . . . 92
Section 8.10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 93
ARTICLE NINE
SATISFACTION AND DISCHARGE
Section 9.01. Satisfaction and Discharge of Bonds . . . . . . . . . . . 94
Section 9.02. Satisfaction and Discharge of Indenture . . . . . . . . . 96
Section 9.03. Application of Trust Money. . . . . . . . . . . . . . . . 97
ARTICLE TEN
EVENTS OF DEFAULT; REMEDIES
Section 10.01. Events of Default. . . . . . . . . . . . . . . . . . . . 97
Section 10.02. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 10.03. Entry Upon Mortgaged Property. . . . . . . . . . . . . . 100
Section 10.04. Power of Sale; Suits for Enforcement . . . . . . . . . . 100
Section 10.05. Incidents of Sale. . . . . . . . . . . . . . . . . . . . 101
Section 10.06. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . . . . . . 103
Section 10.07. Application of Money Collected. . . . . . . . . . . . 104
Section 10.08. Receiver . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 10.09. Trustee May File Proofs of Claim . . . . . . . . . . . . 105
Section 10.10. Trustee May Enforce Claims Without
Possession of Bonds . . . . . . . . . . . . . . . . . . . 105
Section 10.11. Limitation on Suits. . . . . . . . . . . . . . . . . . . 106
Section 10.12. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . . . . . . . . . 106
Section 10.13. Restoration of Rights and Remedies. . . . . . . . . . 107
Section 10.14. Rights and Remedies Cumulative. . . . . . . . . . . . . . 107
Section 10.15. Delay or Omission Not Waiver. . . . . . . . . . . . . 107
Section 10.16. Control by Holders of Bonds . . . . . . . . . . . . . 107
Section 10.17. Waiver of Past Defaults . . . . . . . . . . . . . . . 108
Section 10.18. Undertaking for Costs . . . . . . . . . . . . . . . . . . 108
Section 10.19. Waiver of Appraisement and Other Laws . . . . . . . . . . 109
Section 10.20. Defaults Under Class "A" Mortgages. . . . . . . . . . . . 109
ARTICLE ELEVEN
THE TRUSTEE
Section 11.01. Certain Duties and Responsibilities. . . . . . . . . . . 109
Section 11.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . 110
Section 11.03. Certain Rights of Trustee. . . . . . . . . . . . . . . . 110
Section 11.04. Not Responsible for Recitals or Issuance
of Bonds. . . . . . . . . . . . . . . . . . . . . . . . . 111
Section 11.05. May Hold Bonds . . . . . . . . . . . . . . . . . . . . . 112
Section 11.06. Money Held in Trust. . . . . . . . . . . . . . . . . . . 112
Section 11.07. Compensation and Reimbursement . . . . . . . . . . . . . 112
Section 11.08. Disqualification; Conflicting Interests. . . . . . . . . 113
Section 11.09. Corporate Trustee Required; Eligibility. . . . . . . . . 113
Section 11.10. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . . 114
Section 11.11. Acceptance of Appointment by Successor . . . . . . . . . 115
Section 11.12. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . . . . . . . 116
Section 11.13. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 11.14. Co-Trustees and Separate Trustees. . . . . . . . . . . . 117
Section 11.15. Appointment of Authenticating Agent. . . . . . . . . . . 118
ARTICLE TWELVE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
Section 12.01. Lists of Holders; Preservation of
Information . . . . . . . . . . . . . . . . . . . . . . . 120
Section 12.02. Reports by Trustee and Company . . . . . . . . . . . . . 121
ARTICLE THIRTEEN
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 13.01. Company May Consolidate, Etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . 121
Section 13.02. Successor Corporation Substituted. . . . . . . . . . . . 123
Section 13.03. Extent of Lien Hereof on Property of
Successor Corporation . . . . . . . . . . . . . . . . . . 124
Section 13.04. Release of Company Upon Conveyance Other
Transfer. . . . . . . . . . . . . . . . . . . . . . . . . 124
Section 13.05. Merger into Company; Extent of Lien Hereof . . . . . . . 124
ARTICLE FOURTEEN
SUPPLEMENTAL INDENTURES
Section 14.01. Supplemental Indentures Without Consent
of Holders. . . . . . . . . . . . . . . . . . . . . . . . 125
Section 14.02. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . 127
Section 14.03. Execution of Supplemental Indentures . . . . . . . . . . 129
Section 14.04. Effect of Supplemental Indentures. . . . . . . . . . . . 129
Section 14.05. Conformity With Trust Indenture Act. . . . . . . . . . . 130
Section 14.06. Reference in Bonds to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . . . . 130
ARTICLE FIFTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
Section 15.01. Purposes for Which Meetings May be Called. . . . . . . . 130
Section 15.02. Call, Notice and Place of Meetings . . . . . . . . . . . 130
Section 15.03. Persons Entitled to Vote at Meetings;
Record Date . . . . . . . . . . . . . . . . . . . . . . . 131
Section 15.04. Quorum; Action . . . . . . . . . . . . . . . . . . . . . 132
Section 15.05. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment
of Meetings . . . . . . . . . . . . . . . . . . . . . . . 133
Section 15.06. Counting Votes and Recording Action of
Meetings. . . . . . . . . . . . . . . . . . . . . . . . . 134
Section 15.07. Action Without Meeting . . . . . . . . . . . . . . . . . 135
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 16.01. Liability Solely Corporate . . . . . . . . . . . . . . . 135
EXHIBIT A Description of Property
EXHIBIT B Modification to the 1936 Mortgage
GENERAL AND REFUNDING MORTGAGE INDENTURE AND DEED OF TRUST,
dated as of June 1, 1995, between BANGOR HYDRO-ELECTRIC COMPANY, a Maine
corporation, the post office address of which is 33 State Street, Bangor,
Maine 04401, and CHEMICAL BANK, a corporation organized and existing under
the laws of the State of New York, the post office address of which is 450
West 33rd Street, New York, New York 10001, as Trustee;
W I T N E S S E T H :
WHEREAS, all capitalized terms used in this Indenture have the
respective meanings set forth in Article One; and
WHEREAS, the Company deems it necessary to borrow and,
pursuant to this Indenture, to issue Bonds for its corporate purposes from
time to time, and to mortgage and pledge the property hereinafter described
to secure payment of the Bonds; and
WHEREAS, all acts and things have been done and performed
which are necessary to make this Indenture, when duly executed and delivered,
a valid and binding mortgage and deed of trust for the security of all Bonds
duly issued hereunder and Outstanding from time to time; and the execution
and delivery of this Indenture have been in all respects duly authorized.
NOW, THEREFORE, to secure the payment of the principal of,
premium, if any, and interest, if any, on all Bonds issued and Outstanding
under this Indenture when payable in accordance with the provisions thereof
and hereof, and to secure the performance by the Company of, and its
compliance with, the covenants and conditions of this Indenture, and in
consideration of the premises and of One Dollar paid to the Company by the
Trustee, the Company hereby grants, bargains, sells, releases, conveys,
assigns, transfers, mortgages, pledges, sets over and confirms to Chemical
Bank, as Trustee, and grants to the Trustee a security interest in, the
following:
GRANTING CLAUSE FIRST
All right, title and interest of the Company in and to
property (other than Excepted Property), real, personal and mixed and
wherever situated, in any case used or to be used in or in connection
with the Primary Purposes of the Company's Business (whether or not such
use is the sole use of such property), including without limitation (a)
all land and interests in land subject to the Lien of and referenced in
the 1936 Mortgage and in supplements thereto (and related real estate
property descriptions), which mortgage and supplements (and
descriptions) are described in Exhibit A to this Indenture, except land
and interests in land which have been specifically released from such
Lien from time to time; (b) all other lands, easements, servitudes and
other rights and interests in or relating to real property or the
occupancy or use of the same; (c) all plants, generators, turbines,
engines, boilers, fuel handling and transportation facilities, air and
water pollution control and sewage and solid waste disposal facilities
and other machinery and facilities for the generation of electric
energy; (d) all switchyards, lines, towers, substations, transformers
and other machinery and facilities for the transmission of electric
energy; (e) all lines, poles, conduits, conductors, meters, regulators
and other machinery and facilities for the transmission or distribution
of electric energy; (f) all buildings, offices, warehouses and other
structures; and (g) all pipes, cables, insulators, ducts, tools,
equipment, apparatus and facilities and all other property, of whatever
kind and nature, ancillary to or otherwise used or to be used in
conjunction with any or all of the foregoing or otherwise, directly or
indirectly, in furtherance of the Primary Purposes of the Company's
Business;
GRANTING CLAUSE SECOND
Subject to the applicable exceptions permitted by Section
8.10, Section 13.03 and Section 13.05, all property (other than Excepted
Property) of the kind and nature described in Granting Clause First
which may be hereafter acquired by the Company, it being the intention
of the Company that all such property acquired by the Company after the
date of the execution and delivery of this Indenture shall be as fully
embraced within and subjected to the Lien hereof as if such property
were owned by the Company as of the date of the execution and delivery
of this Indenture;
GRANTING CLAUSE THIRD
Any Excepted Property, and any other property of the Company,
real, personal or mixed, not described in Granting Clause First or
Granting Clause Second, which may, from time to time after the date of
the execution and delivery of this Indenture, by delivery or by one or
more supplemental indentures, be subjected to the Lien hereof by the
Company or by anyone in its behalf, the Trustee being hereby authorized
to receive the same at any time as additional security hereunder; it
being understood that any such subjection to the Lien hereof of any
Excepted Property or other property as additional security may be made
subject to such reservations, limitations or conditions respecting the
use and disposition of such property or the proceeds thereof as shall be
set forth in such instrument; and
GRANTING CLAUSE FOURTH
All bonds of the Collateral Series due July 1, 2000 issued by
the Company under the 1936 Mortgage and pursuant to the supplemental
indenture relating to such series, assigned to the Trustee from time to
time and held as security for all Bonds outstanding hereunder (the "Bank
Collateral Bonds").
GRANTING CLAUSE FIFTH
All other property of whatever kind and nature subjected or
intended to be subjected to the Lien of this Indenture by any of the
terms and provisions hereof;
TOGETHER WITH
(Subject to the provisions of Section 8.01 hereof) the tolls,
rents, revenues, issues, earnings, income, product and profits
appertaining to the aforesaid property or any part thereof.
EXCEPTED PROPERTY
Expressly excepting and excluding, however, from the Lien and
operation of this Indenture the following property of the Company,
whether now owned or hereafter acquired (the "Excepted Property"):
(a) all cash on hand, in banks or in
other financial institutions with which the Company maintains
deposits, shares of stock, bonds, notes, evidences of
indebtedness and other securities (including without
limitation stock of subsidiaries or affiliates, partnership
interests and member interests in limited liability companies)
not hereafter paid or delivered to, deposited with, or held
by, the Trustee hereunder or required so to be;
(b) accounts receivable and unbilled
revenues;
(c) all contracts, leases and other
agreements of whatsoever kind and nature (including pole
attachment agreements and joint pole agreements), contract
rights, bills, notes and other instruments, claims, credits,
demands, judgments, choses in action, patents, patent licenses
and other patent rights, patent applications, trade names,
trademarks and other general intangibles;
(d) all permits, licenses, franchises
(including municipal franchises and other rights to use public
ways) and rights (however characterized) granted by any
governmental entity;
(e) all motor vehicles, automobiles,
buses, trucks, truck cranes, tractors, trailers and similar
vehicles, movable equipment, all rolling stock, railcars,
containers and other railroad equipment, all vessels, boats,
barges and other marine equipment, all airplanes, airplane
engines and flight equipment, and all components, spare parts,
accessories, supplies and fuel used or to be used in
connection with any of the foregoing;
(f) all goods, wares, merchandise,
equipment, spare parts and tools held for sale or lease in the
ordinary course of business or for use or consumption in, or
in the operation of, any properties of, or for the benefit of,
the Company, or held in advance of use thereof for maintenance
or replacement purposes; all fuel, materials and supplies and
other personal property which are consumable (otherwise than
by ordinary wear and tear) in their use for one or more of the
Primary Purposes of the Company's Business (including without
limitation nuclear fuel in whatever form);
(g) all office furniture and office
equipment; all satellites and other equipment and materials
used or to be used in outer space; all business machines; all
communications equipment (including telephone equipment); and
all computer, record production, storage and retrieval
equipment used exclusively for corporate administrative or
clerical purposes, and all components, spare parts,
accessories, and supplies used or to be used in connection
with any of the foregoing;
(h) all crops, timber, sand, gravel,
rocks, earth, natural gas, coal, ore, uranium, gas, oil and
other minerals harvested, mined or extracted or otherwise
separated from the land, or lying or being upon, within or
under any properties of the Company, including the Mortgaged
Property, all mineral rights, leases and royalties and income
therefrom, and all rights to explore for minerals, and gas or
oil wells or any lease or real estate acquired for the purpose
of obtaining gas or oil rights;
(i) all emissions or pollution allowances
or credits (or similar rights) created under the Clean Air Act
or under any similar existing or future law relating to
abatement or control of pollution of the atmosphere, water or
soil;
(j) all electric energy, gas, steam,
water, ice and other products generated, manufactured,
produced, provided or purchased by the Company for sale,
transmission or distribution or used or to be used by the
Company;
(k) all leasehold interests and leasehold
improvements;
(l) all property, real, personal and
mixed, which is:
(A) not specifically subjected or
required to be subjected to the Lien of this Indenture
by any express provision hereof; and
(B) not used or to be used for one or
more of the Primary Purposes of the Company's Business,
or in connection with the operation of any property
specifically subjected or required to be subjected to
the Lien of this Indenture by the express provisions
hereof; and
(m) the Company's franchise to be a
corporation.
it being understood that the Company may, however, pursuant to Granting
Clause Third, subject to the Lien of this Indenture any Excepted
Property, whereupon the same shall cease to be Excepted Property.
PROVIDED, HOWEVER, that (x) if, at any time after the occurrence of an
Event of Default, the Trustee, or any separate trustee or co-trustee
appointed under Section 11.14 or any receiver appointed pursuant to
statutory provision or order of court, shall have entered into
possession of all or substantially all of the Mortgaged Property, all
the Excepted Property described or referred to in the foregoing clauses
(c), (d) and (e), then owned or held or thereafter acquired by the
Company shall immediately, and, in the case of any Excepted Property
described or referred to in clause (k), upon demand of the Trustee or
such other trustee or receiver, become subject to the Lien of this
Indenture to the extent permitted by law (but subject to Liens in effect
at such time on such Excepted Property of the Company which is then in
existence), and the Trustee or such other trustee or receiver may, to
the extent permitted by law, at the same time likewise take possession
thereof, and (y) whenever all Events of Default shall have been cured
and the possession of all or substantially all of the Mortgaged Property
shall have been restored to the Company, such Excepted Property shall
again be excepted and excluded from the Lien hereof to the extent set
forth above; it being understood that the Company may, however, pursuant
to Granting Clause Third, subject to the Lien of this Indenture any
Excepted Property, whereupon the same shall cease to be Excepted
Property;
TO HAVE AND TO HOLD all such properties, rights and interests
in property granted, bargained, sold, warranted, released, conveyed,
assigned, transferred, mortgaged, pledged, set over and confirmed or in which
a security interest has been
granted by the Company in this Indenture or intended or agreed to be so
granted, together with all the appurtenances thereto, unto the Trustee and
its successors and assigns forever.
SUBJECT, HOWEVER, to Permitted Liens and to Liens which have
been granted by the Company to other Persons prior to the date of the
execution and delivery of this Indenture (including, without limitation, the
Lien of the 1936 Mortgage), and subject also, as to any property hereafter
acquired by the Company, to vendors' Liens, purchase money mortgages and
other Liens thereon at the time of the acquisition thereof (including, but
not limited to, the Lien of any Class "A" Mortgage), it being understood that
with respect to any of such property which is now or hereafter becomes
subject to the Lien of any Class "A" Mortgage, the Lien of this Indenture
shall at all times be junior and subordinate to the Lien of such Class "A"
Mortgage;
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate
benefit and security of all present and future Holders of the Bonds, and to
secure the payment of the principal of, premium, if any, and interest, if
any, on the Bonds issued and Outstanding under this Indenture when payable in
accordance with the provisions thereof and hereof, and to secure the
performance by the Company of, and its compliance with, the covenants and
conditions of this Indenture without any preference, priority or distinction
of any one Bond over any other Bond by reason of priority in the issue or
negotiation thereof or otherwise;
PROVIDED, HOWEVER, and these presents are made upon the
condition, that if the Company shall pay or cause to be paid the principal
of, premium, if any, and interest, if any, on the Bonds at the times and in
the manner therein and herein provided, or shall provide, in the manner
permitted hereby, for the payment thereof, and if the Company shall also pay
or cause to be paid all other sums payable hereunder by it and perform all of
the covenants and comply with all of the conditions of this Indenture, then
this Indenture and the estate and rights hereby granted shall cease,
terminate and be void; and
IT IS HEREBY COVENANTED AND AGREED, by and between the Company
and the Trustee, that all Bonds are to be authenticated, delivered and
issued, and that all Mortgaged Property is to be held, subject to the further
covenants, conditions, uses and trusts hereinafter set forth, and the
Company, for itself and its successors and assigns, does hereby covenant and
agree to and with the Trustee and its successors in trust, for the benefit of
all Holders of the Bonds, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section
1.001. GENERAL DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all terms used herein (and which are not specifically
defined herein) which are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them
therein;
(c) all terms used herein (and which are not specifically
defined herein) which are defined in the Uniform Commercial Code (as in
effect in Maine) have the meanings assigned to them therein;
(d) the word "or" is not exclusive;
(e) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with Generally Accepted
Accounting Principles; and
(f) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"ACT", when used with respect to any Holder of a Bond, has the
meaning specified in Section 1.07(a).
"ADJUSTED NET EARNINGS" means the amount calculated in
accordance with Section 1.03(a); PROVIDED, HOWEVER, that if any of the
property of the Company owned by it at the time of the making of any Net
Earnings Certificate (a) shall have been acquired during or after any period
for which Adjusted Net Earnings of the Company are to be computed, (b) shall
not have been acquired in exchange or substitution for property the net
earnings of which have been included in the Adjusted Net Earnings of the
Company, and (c) had been operated as a separate unit and items of revenue
and expense attributable thereto are readily ascertainable, then the net
earnings of such property (computed in the manner provided for the
computation of the Adjusted Net Earnings of the Company) during such period
or such part of such period as shall have preceded the acquisition thereof,
to the extent that the same have not otherwise been included in the Adjusted
Net Earnings of the Company, shall be so included.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; "AFFILIATED" has a
meaning correlative to the foregoing. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct generally the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings
correlative to the foregoing.
"ANNUAL INTEREST REQUIREMENTS" means the amount calculated in
accordance with Section 1.03(b).
"APPRAISER" means a Person engaged in the business of
appraising property or competent to determine the Fair Value or fair market
value of the particular property in question, and who or which, unless
required to be Independent, may be employed by or Affiliated with the
Company.
"APPRAISER'S CERTIFICATE" means a certificate signed by an
Appraiser; any Appraiser's Certificate which is relied upon by an Independent
Engineer, for purposes of an Independent Engineer's Certificate, shall be
signed by an Independent Appraiser.
"AUTHENTICATING AGENT" means any Person (other than the
Company or an Affiliate of the Company) authorized by the Trustee to act on
behalf of the Trustee to authenticate one or more series of Bonds.
"AUTHORIZED EXECUTIVE OFFICER" means the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President
(whether or not his or her title includes a modifier such as "Executive",
"Senior" or the like), the Treasurer, the Controller, the Secretary, the
Clerk or any other officer of the Company designated in an Officer's
Certificate delivered to the Trustee to be an Authorized Executive Officer.
"AUTHORIZED PUBLICATION" means a newspaper or financial
journal of general circulation, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays; or, in the alternative, shall mean such form
of communication as may have come into general use for the dissemination of
information of similar import. In the event that successive weekly
publications in an Authorized Publication are required hereunder they may be
made (unless otherwise expressly provided herein) on the same or different
days of the week and in the same or in different Authorized Publications. In
case, by reason of the suspension of publication of any Authorized
Publication, or by reason of any other cause, it shall be impractical without
extraordinary expense to make publication of any notice in an Authorized
Publication as required by this Indenture, then such method of publication or
notification as shall be made with the approval of the Trustee shall be
deemed the equivalent of the required publication of such notice in an
Authorized Publication.
"AUTHORIZED PURPOSES" means the authentication and delivery of
Bonds, the release of property, the discharge of a Class "A" Mortgage or the
withdrawal of cash under any of the provisions of this Indenture.
"BANK COLLATERAL BONDS" has the meaning specified in Granting
Clause Fourth.
"BOARD OF DIRECTORS" means either the board of directors of
the Company or any duly authorized committee thereof.
"BOARD RESOLUTION" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"BOND REGISTER" and "BOND REGISTRAR" have the respective
meanings specified in Section 3.05(a).
"BONDED" has the meaning specified in Section 1.02(a).
"BONDS" means any bonds authenticated and delivered under this
Indenture.
"BUSINESS DAY", when used with respect to a Place of Payment
or any other particular location specified in the Bonds or this Indenture,
means any day, other than a Saturday or Sunday, which is not a day on which
banking institutions or trust companies in such Place of Payment or other
location so specified are generally authorized or required by law, regulation
or executive order to remain closed, except as may be otherwise specified as
contemplated by Section 3.01.
"CLASS "A" BONDS" means bonds or other obligations now or
hereafter issued and Outstanding under the 1936 Mortgage or any other Class
"A" Mortgage.
"CLASS "A" MORTGAGE" means, collectively, the 1936 Mortgage
and each other mortgage or deed of trust or similar indenture entered into by
any corporation that is subsequently merged into or consolidated with the
Company, or into which the Company is merged, and hereafter designated an
additional Class "A" Mortgage in an indenture supplemental hereto complying
with the requirements of Section 7.06(b)(i).
"CLEAN AIR ACT" means the Clean Air Act (42 U.S.C. Sections
740 ET SEQ.) and any amendments to or regulations promulgated thereunder in
effect from time to time.
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body (if any) performing such duties at
such time.
"COMPANY" means Bangor Hydro-Electric Company, a Maine
corporation, unless and until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY ORDER" or "COMPANY REQUEST" means a written order or
request signed in the name of the Company by an Authorized Executive Officer
and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee at
which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution of this
Indenture is located at 450 West 33rd Street, New York, New York 10001,
Attention: Corporate Trustee Administration Department.
"COST" with respect to Property Additions has the meaning
specified in Section 1.04(c).
"CUSTOMARY EXCEPTIONS" means, with respect to any Opinion of
Counsel required to be delivered hereunder, such exceptions to opinions as
are customarily expressed in opinions of counsel rendered in connection with
similar transactions at the time such Opinion of Counsel is to be delivered
and, in any event, shall include exceptions based upon limitations imposed by
(a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other laws affecting the enforcement of mortgagees' and other creditors'
rights, and (b) general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
"DEFAULTED INTEREST" has the meaning specified in Section
3.07(b).
"DISCOUNT BOND" means any Bond pursuant to the terms of which
an amount less than the principal amount thereof may be due and payable upon
a declaration of acceleration of the Maturity thereof.
"DOLLAR" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal
tender for the payment of public and private debts.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Bonds denominated in Dollars, Government Obligations; or
(b) with respect to Bonds denominated in a currency other
than Dollars or in a composite currency, such other obligations or
instruments as shall be specified with respect to such Bonds, as
contemplated by Section 3.01.
"ENGINEER" means a Person engaged in the engineering
profession or otherwise qualified to pass on engineering matters (including,
without limitation, a Person licensed as a professional engineer, whether or
not then engaged in the engineering profession) or an Appraiser or other
Person (including without limitation an investment banking firm) engaged in
the business of appraising property or otherwise competent to determine the
value of the particular property in question, who, in each case, unless
required to be Independent, may be employed by or Affiliated with the
Company.
"ENGINEER'S CERTIFICATE" means a certificate signed by an
Authorized Executive Officer and by an Engineer; PROVIDED, HOWEVER, that, in
connection with the release of any property from the Lien of this Indenture,
the Engineer's Certificate as to the Fair Value of such property, and as to
the nonimpairment by reason of such release of the security of this Indenture
in contravention of the provisions hereof, shall be made by an Independent
Engineer if the Fair Value of such property and of all other property
released since the commencement of the then current calendar year, as set
forth in the certificates required by this Indenture, is ten percent (10%) or
more of the aggregate principal amount of the Bonds at the time Outstanding;
but such a certificate of an Independent Engineer shall not be required in
the case of any release of property, if the Fair Value thereof as set forth
in the certificates required by this Indenture is less than Twenty-Five
Thousand Dollars ($25,000) or less than one percent (1%) of the aggregate
principal amount of the Bonds at the time Outstanding; and PROVIDED, FURTHER,
that at the option of the Company the percentages set forth in the foregoing
proviso (and in any similar calculation involving the valuation of Property
Additions or property used or operated by others than the Company) may be
calculated with reference to the sum of the principal amount of the Bonds at
the time Outstanding plus the principal amount of the Class A Bonds at the
time Outstanding other than Pledged Bonds, if the Trustee shall have received
an Opinion of Counsel satisfactory to the Trustee to the effect that such
calculation is not inconsistent with the Trust Indenture Act.
"EVENT OF DEFAULT" has the meaning specified in Section 10.01.
"EXCEPTED PROPERTY" has the meaning specified in the "Excepted
Property" clause set forth above.
"FAIR VALUE" when applied to property means its value as
determined without deduction for any Prior Liens upon such property and
without deduction to reflect that such property may be of value only to the
Company or another operator of the Mortgaged Property as a whole, which value
may be determined without physical inspection by use of accounting and
engineering records and other data maintained by, or available to, the
Company.
"FUNDED CASH" has the meaning specified in Section 1.02(b).
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means, with respect
to any computation required or permitted under this Indenture, such
accounting principles as are generally accepted in the United States at the
date of such computation or, at the option of the Company from time to time,
at the date of the execution and delivery of this Indenture or any Class "A"
Mortgage which then remains in effect; PROVIDED, HOWEVER, that in determining
generally accepted accounting principles applicable to the Company for
purposes of making any computation required or permitted hereunder, the
Company may, but shall not be required to, reflect any accounting
pronouncement, order, rule or regulation of any accounting standard setting
body, administrative agency, regulatory authority or other governmental body
having jurisdiction over the Company.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America, and
which are entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other instruments
which evidence a direct ownership interest in obligations described in
clause (a) above or in any specific interest or principal payments due
in respect thereof; PROVIDED, HOWEVER, that the custodian of such
obligations or specific interest or principal payments shall be a bank
or trust company subject to federal or state supervision or examination
with a combined capital and surplus of at least $100,000,000; and
PROVIDED, FURTHER, that except as may be otherwise required by law, such
custodian shall be obligated to pay to the holders of such certificates,
depositary receipts or other instruments the full amount received by
such custodian in respect of such obligations or specific payments and
shall not be permitted to make any deduction therefrom.
"GOVERNMENTAL AUTHORITY" means the government of the United
States or any state or territory thereof or of the District of Columbia or of
any county, municipality or other political subdivision of any thereof, or
any department, agency, authority or other instrumentality of any of the
foregoing.
"HOLDER" means a Person in whose name a Bond is registered in
the Bond Register.
"INDENTURE" means this instrument as originally executed, and
as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including the terms of particular series of Bonds
established as contemplated by Section 3.01.
"INDEPENDENT", when applied to any accountant or Engineer,
means such a Person who (a) is in fact independent, (b) does not have any
direct material financial interest in the Company or in any other obligor
upon the Bonds or in any Affiliate of the Company or of such other obligor,
(c) is not connected with the Company or such other obligor as an officer,
employee, promoter, underwriter, trustee, partner, director or any Person
performing similar functions, and (d) is selected by an Authorized Executive
Officer and approved by the Trustee in the exercise of reasonable care.
"INDEPENDENT ENGINEER'S CERTIFICATE" means a certificate
signed by an Independent Engineer.
"INTEREST PAYMENT DATE", when used with respect to any Bond,
means the Stated Maturity of an installment of interest on such Bond.
"INVESTMENT SECURITIES" means any of the following obligations
or securities on which neither the Company nor an Affiliate thereof is the
obligor: (a) Government Obligations; (b) interest bearing deposit accounts
(which may be represented by certificates of deposit) in national or state
banks (which may include the Trustee or any Paying Agent) having a combined
capital and surplus of not less than One Hundred Million Dollars
($100,000,000); (c) bankers' acceptances drawn on and accepted by commercial
banks (which may include the Trustee or any Paying Agent) having a combined
capital and surplus of not less than One Hundred Million Dollars
($100,000,000); (d) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, any state or
territory of the United States of America or the District of Columbia, or any
political subdivision of any of the foregoing, which are rated in any of the
three highest rating categories (without regard to modifiers) by a nationally
recognized statistical rating organization; (e) bonds or other obligations of
any agency or instrumentality of the United States of America; (f) commercial
or finance company paper which is rated in any of the two highest rating
categories (without regard to modifiers) by a nationally recognized
statistical rating organization; (g) corporate debt securities rated in
either of the two highest rating categories (without regard to modifiers) by
a nationally recognized statistical rating organization; (h) repurchase
agreements with banking or financial institutions having a combined capital
and surplus of not less than One Hundred Million Dollars ($100,000,000)
(which may include the Trustee or any Paying Agent) with respect to any of
the foregoing obligations or securities; and (i) securities issued by any
regulated investment company (including any investment company for which the
Trustee is the advisor), as defined in Section 851 of the Internal Revenue
Code of 1986, as amended, or any successor section of such Code or successor
federal statute, provided that the portfolio of such investment company is
limited to obligations that are bonds, notes, certificates of indebtedness,
treasury bills or other securities now or hereafter issued by, or which are
guaranteed as to principal and interest by the full faith and credit of, the
United States of America, which portfolio may include repurchase agreements
which are fully collateralized by any such obligations.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, easement, lease, reservation, restriction, servitude, charge or
similar right or lien of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any filing of, or agreement to give, any financing statement under
the Uniform Commercial Code of any jurisdiction, and any defect or
irregularity in record title.
"MATURED EVENT OF DEFAULT", when used with respect to any
Class "A" Mortgage, means the occurrence of any default or any other event
under such Class "A" Mortgage, and the expiration of the applicable grace
period, if any, specified in such Class "A" Mortgage, if the effect of such
default or other event is to accelerate, or to permit the acceleration of,
the maturity of any amount due under such Class "A" Mortgage.
"MATURITY", when used with respect to any Bond, means the date
on which the principal of such Bond or an installment of principal becomes
due and payable as provided in such Bond or in this Indenture, whether at the
Stated Maturity, by declaration of acceleration, upon call for redemption or
otherwise.
"MORTGAGED PROPERTY" means as of any particular time all
property which at such time is subject, or is intended by the terms of this
Indenture to be subject, to the Lien of this Indenture. Nothing in this
Indenture is intended to prohibit the Lien of this Indenture from continuing
to extend to Mortgaged Property after it is transferred by the Company to a
subsidiary or Affiliate of the Company, or to another third party, if the
Company retains, pursuant to binding agreements in form acceptable to the
Trustee, the ability to cause such subsidiary, Affiliate or third party to
comply with the agreements and covenants required on the part of the Company
to be complied with hereunder with respect to such Mortgaged Property;
PROVIDED, HOWEVER, that any such transferred property shall not constitute
Property Additions or be available for use as a basis for an Authorized
Purpose hereunder after the date of transfer.
"NET EARNINGS CERTIFICATE" has the meaning specified in
Section 1.03.
"1936 MORTGAGE" means the Mortgage and Deed of Trust dated as
of July 1, 1936 from the Company to Citibank, N.A., successor by merger to
City Bank Farmers Trust Company, as trustee, as from time to time amended and
supplemented.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Executive Officer.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be employed by or Affiliated with or be counsel to the Company.
"OUTSTANDING", when used:
(a) with respect to Bonds, means, as of the date of determination, all Bonds
theretofore authenticated and delivered under this Indenture, except:
(i) Bonds theretofore paid, retired,
redeemed, discharged or canceled, or delivered to the Trustee
for cancellation;
(ii) Bonds deemed to have been paid in
accordance with Section 9.01;
(iii) Bonds deposited with or held in
pledge by the Trustee under any of the provisions of this
Indenture, including any so held under any sinking,
improvement, maintenance, replacement or analogous fund; and
(iv) Bonds which have been paid pursuant
to Section 3.06 or in exchange for or in lieu of which other
Bonds have been authenticated and delivered pursuant to this
Indenture, other than any such Bonds in respect of which there
shall have been presented to the Trustee proof satisfactory to
it and the Company that such Bonds are held by a bona fide
purchaser in whose hands such Bonds are valid obligations of
the Company;
PROVIDED, HOWEVER, that in determining whether or not the Holders of the
requisite principal amount of the Bonds Outstanding under this
Indenture, or the Outstanding Bonds of any series or Tranche, have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder or whether or not a quorum is present at a meeting of Holders
of Bonds:
(x) Bonds owned by the Company or any
other obligor upon the Bonds or any Affiliate of the Company
or of such other obligor (unless the Company, such Affiliate
or such obligor owns all Bonds Outstanding under this
Indenture, or (except for purposes of actions to be taken by
holders of Bonds generally under Sections 10.16 or 10.17
hereof) all Outstanding Bonds of each such series and each
such Tranche, as the case may be, determined without regard to
this clause (x)) shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon
any such determination as to the presence of a quorum, only
Bonds which the Trustee knows to be so owned shall be so
disregarded; PROVIDED, HOWEVER, that Bonds so owned which have
been pledged in good faith may be regarded as Outstanding if
it is established to the reasonable satisfaction of the
Trustee that the pledgee, and not the Company, or any such
other obligor or Affiliate of either thereof, has the right so
to act with respect to such Bonds and that the pledgee is not
the Company or any other obligor upon the Bonds or any
Affiliate of the Company or of such other obligor; and
(y) the principal amount of a Discount
Bond that shall be deemed to be Outstanding for such purposes
shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 10.02(a); and
(b) with respect to Class "A" Bonds, has the meaning
specified in the related Class "A" Mortgage.
"PAYING AGENT" means any Person, including the Company or an
Affiliate of the Company, authorized by the Company to pay the principal of
and premium, if any, or interest, if any, on any Bonds on behalf of the
Company.
"PERCENTAGE CALCULATION PROVISO" means the adjustment to the
calculations used to determine whether a certificate of an Independent
Engineer or an Independent public accountant is required for a purpose under
this Indenture, in each case described in the FURTHER PROVISO to the
definition of "ENGINEER'S CERTIFICATE".
"PERIODIC OFFERING" means an offering of Bonds of a series
from time to time any or all of the specific terms of which Bonds, including
without limitation the rate or rates of interest, if any, thereon, the Stated
Maturity or Maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents at or
about the time of the authentication of such Bonds.
"PERMITTED LIENS" means, at any time, any of the following:
(a) the Lien of this Indenture and all liens and encumbrances junior
thereto;
(b) Liens for taxes, assessments and other governmental
charges or requirements not delinquent or which are currently being
contested in good faith by appropriate proceedings;
(c) mechanics', workmen's, repairmen's, materialmen's,
warehousemen's and carriers' Liens, Liens or privileges of any employees
of the Company for salary or wages earned, but not yet payable, and
other Liens, including without limitation Liens for worker's
compensation awards, arising in the ordinary course of business for
charges or requirements which are not delinquent or which are being
contested in good faith and by appropriate proceedings;
(d) any attachment, judgment and other similar Lien arising
in connection with court proceedings (i) in an amount not in excess of
the greater of Five Million Dollars ($5,000,000) or three percent (3%)
of the principal amount of the sum of (x) the principal amount of Bonds
Outstanding at the time such attachment, judgment or Lien arises, and
(y) the principal amount of the Class "A" Bonds Outstanding at the time
such attachment, judgment or Lien arises, other than Pledged Bonds, or
(ii) with respect to which the Company shall (A) in good faith be
prosecuting an appeal or other proceeding for review and with respect to
which the Company shall have secured a stay of execution pending such
appeal or other proceeding, or (B) have the right to prosecute an appeal
or other proceeding for review;
(e) easements, leases, reservations or other rights of
others in, on or over, and laws, regulations and restrictions affecting,
and defects and irregularities in record title to, the Mortgaged
Property or any part thereof; PROVIDED, HOWEVER, that such easements,
leases, reservations, rights, laws, regulations, restrictions, defects
and irregularities do not in the aggregate materially impair the use by
the Company of the Mortgaged Property considered as a whole for the
purposes for which it is held by the Company;
(f) any defects or irregularities in title to any rights-of-
way or to any real estate used or to be used primarily for right-of-way
purposes or held under lease, easement, license or similar right;
PROVIDED, HOWEVER, that (i) the Company shall have obtained from the
apparent owner of the lands or estates therein covered by any such
right-of-way a sufficient right, by the terms of the instrument granting
such right-of-way, lease, easement, license or similar right, to the use
thereof for the purpose for which the Company acquired the same, (ii)
the Company has power under eminent domain, or similar statutes, to
remove such defects or irregularities, or (iii) such defects or
irregularities may be otherwise remedied without undue effort or
expense;
(g) Liens securing indebtedness neither created, assumed nor
guaranteed by the Company, nor on account of which it customarily pays
interest, upon property of the Company, existing at the date of the
execution and delivery of this Indenture, or, as to property hereafter
acquired, at the time of the acquisition thereof by the Company, upon
real estate or rights in or relating to real estate acquired by the
Company to be used for one or more of the Primary Purposes of the
Company's Business;
(h) leases existing at the date of the execution and
delivery of this Indenture affecting property owned by the Company at
said date and renewals and extensions thereof and leases for a term of
not more than fifteen (15) years (including extensions or renewals at
the option of the tenant) affecting property acquired by the Company
after said date;
(i) any Lien vested in any lessor, licensor or permitter for
rent to become due or for other obligations or acts to be performed, the
payment of which rent or the performance of which other obligations or
acts is required under leases, subleases, licenses or permits, so long
as the payment of such rent or the performance of such other obligations
or acts is not delinquent or is being contested in good faith and by
appropriate proceedings;
(j) any controls, restrictions, obligations, duties or other
burdens imposed by any federal, state, municipal or other law, or by any
rule, regulation or order of any Governmental Authority, upon any
property of the Company or the operation or use thereof or upon the
Company with respect to any of its property or the operation or use
thereof or with respect to any franchise, grant, license, permit or
public purpose requirement, or any rights reserved to or otherwise
vested in any Governmental Authority to impose any such controls,
restrictions, obligations, duties or other burdens;
(k) Liens granted on air or water pollution control, sewage
or solid waste disposal, or other similar facilities of the Company in
connection with the issuance of pollution control revenue bonds (or
bonds issued to refund such bonds) in order to finance the cost of, or
the construction or acquisition of, such facilities;
(l) any right which any Governmental Authority may have by
virtue of any franchise, license, contract or statute to purchase, or
designate a purchaser of or order the sale of, any property of the
Company upon payment of cash or reasonable compensation therefor or to
terminate any franchise, license or other rights or to regulate the
property and business of the Company;
(m) any Liens which have been bonded for the full amount in
dispute or for the payment of which other adequate security arrangements
have been made;
(n) agreements for and obligations relating to the joint or
common use of property owned solely by the Company or owned by the
Company in common or jointly with one or more parties;
(o) liens securing indebtedness incurred by a Person, other
than the Company, which indebtedness has been neither assumed nor
guaranteed by the Company nor on which it customarily pays interest,
existing on property which the Company owns jointly or in common with
such Person or such Person and others, if there is a bar against
partition of such property, which would preclude the sale of such
property by such other Person or the holder of such lien without the
consent of the Company;
(p) liens in favor of a government or governmental entity
securing (i) payments pursuant to a statute (other than taxes and
assessments), or (ii) indebtedness incurred to finance all or part of
the purchase price or Cost of construction of the property subject to
such lien;
(q) any other liens or encumbrances of whatever nature or
kind which do not, individually or in the aggregate, materially impair
the Lien of this Indenture or the security afforded thereby for the
benefit of the Bondholders, as evidenced by an Opinion of Counsel to
such effect;
(r) any trustee's lien hereunder; and
(s) Prepaid Liens.
"PERSON" means any individual, corporation, association,
partnership, joint venture, trust or
unincorporated organization or any Governmental Authority.
"PLACE OF PAYMENT" when used with respect to the Bonds of any
series, or any Tranche thereof, means the place or places, specified as
contemplated by Section 3.01, at which, subject to Section 6.02, principal of
and premium, if any, and interest, if any, on the Bonds of such series or
Tranche are payable upon presentation.
"PLEDGED BONDS" means Class "A" Bonds issued and delivered to,
and held by, the Trustee hereunder.
"PREDECESSOR BOND" of any particular Bond means every previous
Bond evidencing all or a portion of the same debt as that evidenced by such
particular Bond; and, for the purposes of this definition, any Bond
authenticated and delivered under Section 3.06 in exchange for or in lieu of
a mutilated, destroyed, lost or stolen Bond shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Bond.
"PREPAID LIEN" means any Lien securing indebtedness for the
payment of which money in the necessary amount (taking into consideration the
amount of income reasonably projected to be earned on such amount) shall have
been irrevocably deposited in trust with the trustee or other holder of such
Lien; PROVIDED, HOWEVER, that if such indebtedness is to be redeemed or
otherwise prepaid prior to the stated maturity thereof, any notice requisite
to such redemption or prepayment shall have been given in accordance with the
mortgage or other instrument creating such Lien or irrevocable instructions
to give such notice shall have been given to such trustee or other holder.
"PRIMARY PURPOSES OF THE COMPANY'S BUSINESS" means the
generation, production, transmission or distribution of electric energy in
any form and for any purpose in the State of Maine.
"PRIOR LIEN" means each Class "A" Mortgage and any other
mortgage, lien, charge, encumbrance, security interest on or in, or pledge
of, any Mortgaged Property existing both at and immediately prior to the time
of the acquisition by the Company of such Mortgaged Property, or created as a
purchase money mortgage on such Mortgaged Property at the time of, or in
connection with, its acquisition by the Company, in each case ranking prior
to or on a parity with the Lien of this Indenture.
"PROPERTY ADDITIONS" has the meaning specified in Section
1.04(a).
"REDEMPTION DATE", when used with respect to any Bond to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Bond to be
redeemed, means the price (or stated percentage of the principal amount
thereof) at which it is to be redeemed pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Bonds of any series means the date specified for that
purpose as contemplated by Section 3.01.
"REQUIRED CURRENCY" has the meaning specified in Section 3.11.
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the
chairman or any vice-chairman of the executive
committee of the board of directors, the chairman of the trust committee, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant vice president, any assistant treasurer, the
cashier, any assistant cashier, any senior trust officer, trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer of the
Trustee to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"RETIRED BONDS" means (A) any Bonds authenticated and
delivered under this Indenture which (a) no longer remain Outstanding by
reason of the applicability of subclause (i) or (ii) of clause (a) in the
definition of "Outstanding", (b) have not been made the basis under any of
the provisions of the Indenture of one or more Authorized Purposes, and (c)
have not been, and are not to be, paid, redeemed, purchased or otherwise
retired by the application thereto of Funded Cash and (B) any Class "A" Bonds
Outstanding as of the date of authentication and delivery of the Series A
Bonds (and not having been made the basis under any of the provisions of this
Indenture of the authentication and delivery of Bonds, or the withdrawal of
cash or the release of property under the Class "A" Mortgage, subject to any
provisions thereof permitting the revocation of the waiver of the right to
the authentication and delivery of bonds thereunder), which subsequent
thereto shall have been paid, retired, redeemed, discharged or canceled or
surrendered to the trustee under the Class "A" Mortgage for cancellation, or
for the purchase, payment or redemption of which moneys in the necessary
amount shall have been deposited with or shall then be held by the trustee
under the Class "A" Mortgage with irrevocable direction so to apply the same
(provided that any such purchase, payment, retirement, redemption,
cancellation or surrender of bonds shall not have been, or shall not be,
effected with cash which has been used as the basis for the release of
property or the issuance of additional bonds under the Class "A" Mortgage or
which represents the proceeds of insurance deposited with the trustee
thereunder); PROVIDED, HOWEVER, that, in the case of redemption, the notice
required by the Class "A" Mortgage shall have been given or have been
provided for to the satisfaction of the trustee under the Class "A" Mortgage
as evidenced by an Officer's Certificate. For purposes of any Officer's
Certificate delivered pursuant to Section 4.04(b)(ii) hereof, bonds otherwise
conforming to the requirements of this definition, which will, concurrently
with the authentication and delivery of the bonds as to which said Officer's
Certificate pertains, be surrendered to the Trustee hereunder or to the
trustee under the Class "A" Mortgage, as the case may be, for cancellation
(otherwise than upon exchanges or transfers of bonds), shall be deemed to be
"Retired Bonds".
"SERIES A BONDS" means the series of Bonds issued pursuant to
the provisions of Section 4.06.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest on the Bonds of any series means a date fixed by the Trustee
pursuant to Section 3.07.
"STATED INTEREST RATE" means a rate more than zero at which an
obligation by its terms is stated to bear simple interest, which rate may be
a variable rate. Any calculation or other determination to be made under
this Indenture by reference to the Stated Interest Rate on a Bond shall be
made without regard to the effective interest cost to the Company of such
Bond and without regard to the Stated Interest Rate on, or the effective cost
to the Company of, any other obligation for which such Bond is pledged or
otherwise delivered as security.
"STATED MATURITY", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means the date on
which the principal of such obligation or such installment of principal
(whether as a result of scheduled amortization or otherwise) or interest is
due and payable (without regard to any provisions for redemption, prepayment,
acceleration, purchase or extension).
"SUCCESSOR CORPORATION" has the meaning set forth in Section
13.01(b).
"TRANCHE" means a group of Bonds which (a) are of the same
series, and (b) have identical terms except as to principal amount or date of
issuance (other than original issuance).
"TRUST INDENTURE ACT" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in force at such time.
"TRUSTEE" means Chemical Bank, a corporation organized and
existing under the laws of the State of New York, until a successor Trustee
shall have become such with respect to one or more series of Bonds pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee"
shall mean or include each Person who is then a Trustee hereunder, and if at
any time there is more than one such Person, "Trustee" as used with respect
to the Bonds of any series shall mean the Trustee with respect to Bonds of
that series.
"UNBONDED" as applied to Bonds (including Retired Bonds),
Class "A" Bonds or Property Additions means that such Bonds, Class "A" Bonds
or Property Additions are not Bonded.
"UNITED STATES" means the United States of America, its
territories, its possessions and other areas subject to its political
jurisdiction.
Section
1.001. BONDED; FUNDED CASH.
(a) "BONDED" as applied to Bonds (including Retired Bonds),
Class "A" Bonds or Property Additions means that such
Bonds, Class "A" Bonds or Property Additions are within one or more of the
following classes:
(i) the aggregate amount of Property Additions which have
been used as a basis for the authentication and delivery of Bonds
pursuant to Section 4.03, the withdrawal of cash pursuant to Section
4.05(c) or the withdrawal of cash pursuant to Section 8.06(a)(i);
(ii) Bonds which have been used as a basis for the authentication
and delivery of Bonds pursuant to Section 4.04, the withdrawal of cash
pursuant to Section 4.05(c) or the withdrawal of cash pursuant to
Section 8.06(a)(ii), and Bonds paid, purchased or redeemed with money
used or applied by the Trustee pursuant to Section 8.06(a)(v);
(iii) Bonds, Class "A" Bonds and Property Additions which have been
used as the basis of the release of property from the Lien of this
Indenture;
(iv) Bonds with respect to which the Company has waived its right
to the authentication and delivery of Bonds pursuant to Section 4.02 or
Section 4.03;
(v) Bonds, Class "A" Bonds and Property Additions which have
been allocated or used as a basis for any credit against the
requirements of any improvement, maintenance or replacement fund for any
series of Bonds; PROVIDED, HOWEVER, that any such Bonds, Class "A" Bonds
or Property Additions so allocated or used shall be reinstated as
Unbonded when all of the Bonds of the series of Bonds in connection with
which such fund was established are retired;
(vi) Class "A" Bonds which have been (w) used as a basis for the
authentication and delivery of Bonds pursuant to Section 4.02 or the
withdrawal of cash pursuant to Section 4.05(c), (x) used as a basis for
the authentication and delivery of Bonds pursuant to Section 4.04, (y)
used as a basis for the issuance of Class "A" Bonds then Outstanding
under a Class "A" Mortgage, or (z) used as a basis for the release of
property or the withdrawal of cash under any Class "A" Mortgage; and
(vii) the aggregate amount of Property Additions designated in an
Engineer's Certificate delivered to the Trustee pursuant to clause (iii)
of Section 7.07(a) to be deemed to have been made the basis of the
authentication and delivery of Bonds then Outstanding which shall have
been originally authenticated and delivered under Section 4.02 on the
basis of Pledged Bonds.
(b) "FUNDED CASH" means:
(i) cash, held by the Trustee hereunder, to the extent
that it represents the proceeds of insurance on, or cash deposited
in connection with the release of property, or the proceeds of the
release of obligations secured by a purchase money mortgage which
obligations have been delivered to the Trustee pursuant to Article
Eight and used as a credit in any application for the release of
property hereunder, or the proceeds of payment to the Trustee on
account of the principal of obligations secured by a purchase money
mortgage which obligations have been delivered to it pursuant to
Article Eight and used as a credit in any application for the
release of property hereunder, all subject, however, to the
provisions of Section 8.06(c);
(ii) any cash deposited with the Trustee under Section 4.05; and
(iii) any cash received by the Trustee from the payment of the
principal of Pledged Bonds.
Section 1.002. NET EARNINGS CERTIFICATE; ADJUSTED NET
EARNINGS; ANNUAL INTEREST REQUIREMENTS.
A "NET EARNINGS CERTIFICATE" means a certificate signed by an
Authorized Executive Officer and an accountant (who may be employed by or
Affiliated with the Company), stating:
(a) the "ADJUSTED NET EARNINGS" of the Company for a period
of twelve (12) consecutive calendar months within the eighteen (18)
calendar months immediately preceding the first day of the month in
which the Company Order requesting the authentication and delivery under
this Indenture of Bonds is delivered to the Trustee, specifying:
(i) its operating revenues (which may
include revenues of the Company subject when collected or
accrued to possible refund at a future date);
(ii) its operating expenses, excluding (A)
expenses for taxes on income or profits and other taxes
measured by, or dependent on, net income, (B) provisions for
reserves for renewals, replacements, depreciation, depletion
or retirement of property (or any expenditures therefor), or
provisions for amortization of assets, (C) expenses or
provisions for interest on any indebtedness of the Company,
for the amortization of debt discount, premium, expense or
loss on reacquired debt, for any maintenance and replacement,
improvement or sinking fund or other device for the retirement
of any indebtedness, or for other similar amortization, (D)
expenses or provisions for any non-recurring charge to income
or to retained earnings of whatever kind or nature (including
without limitation the recognition of expense or impairment
due to the non-recoverability of assets or expense), whether
or not recorded as a non-recurring charge in the Company's
books of account, and (E) provisions for any refund of
revenues previously collected or accrued by the Company
subject to possible refund;
(iii) the amount remaining after deducting
the amount required to be stated in such certificate by clause
(ii) above from the amount required to be stated therein by
clause (i) above;
(iv) its other income, net of related
expenses, which other income may include any portion of the
allowance for funds used during construction and other
deferred costs (or any analogous amounts) which is not
included in "other income" (or any analogous item) in the
Company's books of account; and
(v) the Adjusted Net Earnings of the
Company for such period of twelve (12) consecutive calendar
months (being the sum of the amounts required to be stated in
such certificate by clauses (iii) and (iv) above); and
(b) the "ANNUAL INTEREST REQUIREMENTS", being the interest
requirements for one year, at the respective Stated Interest Rates, if
any, borne prior to Maturity, upon:
(i) all Bonds Outstanding hereunder at
the date of such certificate, except any for the payment or
redemption of which the Bonds applied for are to be issued;
PROVIDED, HOWEVER, that, if Outstanding Bonds of any series
bear interest at a variable rate or rates, then the interest
requirement on the Bonds of such series shall be determined by
reference to the rate or rates in effect on the day
immediately preceding the date of such certificate;
(ii) all Bonds then applied for in pending
applications for new Bonds, including the application in
connection with which such certificate is made; PROVIDED,
HOWEVER, that if Bonds of any series are to bear interest at a
variable rate or rates, then the interest requirement on the
Bonds of such series shall be determined by reference to the
rate or rates to be in effect at the time of the initial
authentication and delivery of such Bonds; and PROVIDED,
FURTHER, that the determination of the interest requirement on
Bonds of a series subject to a Periodic Offering shall be
further subject to the provisions of clause (iv) of Section
4.01(a);
(iii) all Class "A" Bonds Outstanding under Class "A"
Mortgages at the date of such certificate, except any Pledged
Bonds and except any for the payment or redemption of which
the Bonds applied for are to be issued; PROVIDED, HOWEVER,
that, if the Outstanding Class "A" Bonds of any series bear
interest at a variable rate or rates, then the interest
requirement on the Class "A" Bonds of such series shall be
determined by reference to the rate or rates in effect on the
day immediately preceding the date of such certificate; and
(iv) the principal amount of all other
indebtedness (except (A) Pledged Bonds, (B) industrial
development revenue bonds issued with respect to air or water
pollution control, sewage or solid waste disposal, or other
similar facilities of the Company to the extent that any other
indebtedness of the Company issued to support the repayment of
such indebtedness is included in Annual Interest Requirements
pursuant to one of the other clauses of this definition, (C)
indebtedness for the payment of which the Bonds applied for
are to be issued, and (D) indebtedness secured by a Prepaid
Lien prior to the Lien of this Indenture upon property subject
to the Lien of this Indenture), outstanding on the date of
such certificate and secured by a Lien prior to the Lien of
this Indenture upon property subject to the Lien of this
Indenture, if such indebtedness has been issued, assumed or
guaranteed by the Company or if the Company customarily pays
the interest upon the principal thereof; PROVIDED, HOWEVER,
that if any such indebtedness bears interest at a variable
rate or rates, then the interest requirement on such
indebtedness shall be determined by reference to the rate or
rates in effect on the day immediately preceding the date of
such certificate.
In any case where a Net Earnings Certificate is required as a
condition precedent to the authentication and delivery of Bonds, such
certificate shall be accompanied by a certificate signed by an Independent
public accountant if the aggregate principal amount of Bonds then applied for
plus the aggregate principal amount of Bonds authenticated and delivered
hereunder since the commencement of the then current calendar year (other
than those with respect to which a Net Earnings Certificate is not required,
or with respect to which a Net Earnings Certificate accompanied by a
certificate signed by an Independent public accountant has previously been
furnished to the Trustee) is ten percent (10%) or more of the aggregate
principal amount of the Bonds at the time Outstanding (subject to the
Percentage Calculation Proviso), which certificate shall provide that such
Independent public accountant has reviewed the Net Earnings Certificate and
that such Independent public accountant has no knowledge that any statements
in such Net Earnings Certificate are not true; but no such certificate need
be signed by an Independent public accountant, as to dates or periods not
covered by annual reports required to be filed by the Company, with respect
to conditions precedent which depend upon a state of facts as of a date or
dates or for a period or periods different from that required to be covered
by such annual reports.
Section 1.003. PROPERTY ADDITIONS; COST.
(a) "PROPERTY ADDITIONS" means, as of any particular time,
any item, unit or element of property which at such time is owned by the
Company and is subject to the Lien of this Indenture. Property Additions:
(i) need not consist of a specific or
completed development, plant, betterment, addition, extension,
improvement or enlargement, but may include construction work
in progress and property in the process of purchase insofar as
the Company shall have acquired legal title to such property,
and may include the following:
(A) fractional and other undivided
interests of the Company in property owned jointly or in
common with other Persons, whether or not there are with
respect to such property, other agreements or
obligations on the part of the Company, if there is a
bar against partition of such property which would
preclude the sale of such property by any or all of such
other Persons or the holder or holders of any lien or
liens on the interest of any of such other Persons in
such property, without the consent of the Company;
(B) engineering, economic,
environmental, financial, geological and legal or other
surveys, data processing equipment and software,
preliminary to or associated with the acquisition or
construction of property included or intended to be
included in the Mortgaged Property, provided that any
such property is not Excepted Property or, if it is
Excepted Property, such property has been subjected to
the Lien and operation of this Indenture as provided in
Granting Clause Third;
(C) paving, grading and other
improvements to, under or upon highways, bridges, parks
or other public property of analogous character required
for or in connection with the installation or repair of
overhead, surface or underground facilities and paid for
and used or to be used by the Company, notwithstanding
that the Company may not hold legal title thereto;
(D) property located over, on or under
property owned by other Persons, including governmental
or municipal agencies, bodies or subdivisions, under
permits, licenses, easements, franchises and other
similar privileges, if the Company shall have the right
to remove the same;
(E) intangible property (including any
acquisition premium paid in connection with the
acquisition of any property), regardless of whether the
Cost thereof is permitted to be recorded in the plant
account of the Company or is permitted to be recovered
by the Company through the rates that it charges its
customers; and
(ii) may include renewals, replacements
and substitution of property not excluded from the definition of
"Property Additions"; but
(iii) shall not include:
(A) Excepted Property (other than
Excepted Property which has been subjected to the Lien
and operation of this Indenture as provided in Granting
Clause Third); or
(B) any property the cost of
acquisition or construction of which is properly
chargeable to an operating expense account of the
Company.
(b) When any Property Additions are certified to the Trustee
as the basis of any Authorized Purpose (except as otherwise provided in
Section 8.06):
(i) there shall be deducted from the Cost
or Fair Value thereof to the Company, as the case may be (as
of the date so certified), an amount equal to the Cost (or as
to Property Additions of which the Fair Value to the Company
at the time the same became Property Additions was less than
the Cost as determined pursuant to subsection (c) of this
Section, then such Fair Value in lieu of Cost) of all Property
Additions retired to the date of such certification (other
than the Property Additions, if any, in connection with the
application for release of which such certificate is filed)
and not theretofore deducted from the Cost or Fair Value to
the Company of Property Additions theretofore certified to the
Trustee; and
(ii) there may, at the option of the
Company, be added to such Cost or Fair Value, as the case may
be, the sum of:
(A) the principal amount of any
obligations secured by a purchase money mortgage and any
cash (other than proceeds of such purchase money
obligations), not theretofore so added and which the
Company then elects so to add, received by the Trustee
representing the proceeds of insurance on, or of the
release or other disposition of, Property Additions
retired; and
(B) twenty-fifteenths (20/15ths) of
the principal amount of any Bond or Bonds, or portion of
such principal amount, not theretofore so added and
which the Company then elects so to add, the right to
the authentication and delivery of which under the
provisions of Section 4.04 and subclause (B) of clause
(iii) of Section 8.05(a) shall at any time theretofore
have been waived as the basis of the release of Property
Additions retired; PROVIDED, HOWEVER, that the aggregate
of the amounts added under clause (ii) above shall in no
event exceed the amounts deducted under clause (i)
above.
(c) The term "COST" with respect to Property Additions made
the basis for one or more Authorized Purposes shall mean the sum of (i)
any cash or its equivalent forming a part of such Cost, plus all costs
and allowances for funds used during the construction thereof and other
deferred costs relating to such construction, but only to the extent of
the greater of the amount permitted by Generally Accepted Accounting
Principles or the amount permitted by accounting regulations or orders
issued by any governmental regulatory commission, (ii) an amount
equivalent to the fair market value in cash (as of the date of delivery)
of any securities or other property delivered in payment therefor or for
the acquisition thereof, (iii) the principal amount of any obligations
secured by a Prior Lien (other than a Class "A" Mortgage) upon such
Property Additions outstanding at the time of the acquisition of such
Property Additions, and (iv) the principal amount of any other
indebtedness incurred or assumed as all or part of the Cost to the
Company of such Property Additions; PROVIDED, HOWEVER, that,
notwithstanding any other provision of this Indenture, in any case where
Property Additions shall have been acquired (otherwise than by
construction) by the Company without any consideration consisting of
cash, securities or other property or the incurring or assumption of
indebtedness, no determination of Cost shall be required, and wherever
in this Indenture provision is made for Cost or Fair Value, the Cost, in
such case, shall mean an amount equal to the greater of (x) the Fair
Value thereof, or (y) the book value of such acquired Property Additions
at the time of the acquisition thereof.
(d) If any Property Additions are shown by the Engineer's
Certificate provided for in clause (ii) of Section 4.03(b) to include
property which has been used or operated by others than the Company in a
business similar to that in which it has been or is to be used or
operated by the Company, the Cost thereof may include the amount of cash
or the value of any portion of the securities paid or delivered for any
goodwill or going concern value rights simultaneously acquired for which
no separate or distinct consideration shall have been paid or
apportioned, and in such case the term Property Additions as defined
herein may include such goodwill and going concern value rights,
regardless of whether such Cost is permitted to be recorded in the plant
account of the Company or is permitted to be recovered by the Company
through the rates that it charges its customers.
(e) For the purposes of the deductions required by this
Section, the Cost or the Fair Value to the Company of Property Additions
retired shall be the Cost or the Fair Value thereof to the Company at
the time such property became Property Additions.
(f) All Property Additions which shall be retired,
abandoned, destroyed, released or otherwise disposed of (including
damaged or destroyed Property Additions (or portions thereof) for which
the Company shall have received proceeds pursuant to Section 6.07(b) but
with respect to which the Company shall have elected not to rebuild or
repair) shall for the purpose of this Section 1.04 be deemed Property
Additions retired and for other purposes of this Indenture shall
thereupon cease to be Property Additions, but may at any time thereafter
again become Property Additions as provided in this Indenture. Neither
any reduction in the Cost or book value of property recorded in the
plant account of the Company, nor the transfer of any amount appearing
in such account to intangible or adjustment accounts, otherwise than in
connection with actual retirements of physical property abandoned,
destroyed, released or disposed of, and otherwise than in connection
with the removal of such property in its entirety from plant account,
shall be deemed to constitute a retirement of Property Additions.
Section 1.004. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Except as otherwise expressly provided in this
Indenture, upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company
shall, if requested by the Trustee, furnish to the Trustee an Officer's
Certificate stating that all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with,
it being understood that in the case of any such application or request
as to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular application
or request, no additional certificate or opinion need be furnished.
(b) Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture other than
the certificate required by Section 6.11 shall include:
(i) a statement that each individual or
counsel signing such certificate or opinion has read such
covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature
and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(iii) a statement that, in the opinion of
each such individual or counsel, he has made such examination
or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the
opinion of each such individual or counsel, such condition or
covenant has been complied with.
(c) Any Opinion of Counsel provided for herein may be based,
insofar as it relates to factual matters, upon statements made by the
Company in documents filed with any governmental regulatory commission
or upon a certificate or opinion of, or representations by, an officer
or officers of the Company, unless, in the case of such a certificate or
opinion, such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with
respect to such matters are erroneous. If, in order to render any
Opinion of Counsel provided for herein, the signer thereof shall deem it
necessary that additional facts or matters be stated in any Engineer's
Certificate provided for herein, then such Engineer's Certificate may
state all such additional facts or matters as the signer of such Opinion
of Counsel may request. In addition, in giving any Opinion of Counsel
provided for herein, counsel may rely upon (i) prior opinions of counsel
for the Company, (ii) opinions of special counsel for the Company and
its subsidiaries, (iii) opinions of in-house counsel for any of the
Company's divisions or subsidiaries, and (iv) title insurance policies,
title insurance commitments and reports, lien search certificates and
other similar evidences of the existence of liens on property.
Section 1.005. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
(b) Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous.
(c) Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need
not, be consolidated and form one instrument.
Section 1.006. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, election, waiver or other action provided by this Indenture to
be made, given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing or,
alternatively, may be embodied in and evidenced by the record of Holders
voting in favor thereof, either in person or by proxies duly appointed
in writing, at any meeting of Holders duly called and held in accordance
with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it
is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Bond,
shall be sufficient for any purpose of this Indenture and (subject to
Section 11.01) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section. The record of any meeting
of Holders shall be proved in the manner provided in Section 15.06.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof or may be proved in any other manner which the
Trustee and the Company deem sufficient. Where such execution is by a
signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The principal amount (except as otherwise contemplated
in clause (y) of the proviso to clause (a) of the definition of
"Outstanding") and serial numbers of Bonds held by any Person, and the
date of holding the same, shall be proved by the Bond Register.
(d) Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of a Holder shall bind every
future Holder of the same Bond and the Holder of every Bond issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not notation
of such action is made upon such Bond.
(e) Until such time as written instruments shall have been
delivered to the Trustee with respect to the requisite percentage of
principal amount of Bonds for the action contemplated by such
instruments, any such instrument executed and delivered by or on behalf
of the Holder may be revoked with respect to any or all of such Bonds by
written notice by such Holder or any subsequent Holder, proven in the
manner in which such instrument was proven.
(f) Bonds of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee
as to any action taken by such Act of Holders. If the Company shall so
determine, new Bonds of any series, or any Tranche thereof, so modified
as to conform, in the opinion of the Trustee and the Company, to such
action may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Bonds of such
series or Tranche.
(g) If the Company shall solicit from Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by Company Order, fix in advance a
record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of business on
the record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of the
Outstanding Bonds have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Bonds shall be computed
as of the record date.
Section 1.007. NOTICES, ETC., TO TRUSTEE AND COMPANY.
(a) Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document provided
or permitted by this Indenture to be made upon, given or furnished to,
or filed with, the Trustee by any Holder or by the Company, or the
Company by the Trustee or by any Holder, shall be sufficient for every
purpose hereunder (unless otherwise expressly provided herein) if the
same shall be in writing and delivered personally to an officer or other
responsible employee of the addressee, or transmitted by telecopy, telex
or other direct written electronic means, or transmitted by registered
mail or reputable overnight courier, charges prepaid to the applicable
address set opposite such party's name below or to such other address as
either party hereto may from time to time designate:
If to the Trustee, to:
Chemical Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration
Department
Telephone: (212) 946-3347
Telecopy: (212) 946-7799 or 7800
If to the Company, to:
Bangor Hydro-Electric Company
33 State Street
Bangor, Maine 04401
Attention: Chief Financial Officer
Telephone: (207) 945-5621
Telecopy: (207) 990-6954
(b) Any communication contemplated herein shall be deemed to
have been made, given, furnished and filed if personally delivered, on
the date of delivery, if transmitted by telecopy, telex or other direct
written electronic means, on the date of transmission, and if
transmitted by registered mail or reputable overnight courier, on the
date of receipt.
Section 1.008. NOTICE TO HOLDERS OF BONDS; WAIVER.
(a) Except as otherwise expressly provided herein, where
this Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given, and shall be deemed given, to Holders if in
writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Bond
Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.
(b) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to
give such notice to Holders by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
(c) Any notice required by this Indenture may be waived in
writing by the Person entitled to receive such notice, either before or
after the event otherwise to be specified therein, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holders shall be
filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such
waiver.
Section 0.10. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or
conflicts with any duties under any required provision of the Trust Indenture
Act imposed hereon by Section 318(c) thereof, or any successor section of
such Act, such required provision shall control.
Section 0.11. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and the
Table of Contents are for convenience only and shall not affect the
construction hereof.
Section 0.12. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 0.13. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Bonds shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 0.14. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Bonds, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 0.15. GOVERNING LAW.
This Indenture and the Bonds shall be governed by and
construed in accordance with the laws of the State of Maine, except (a) to
the extent that the law of any other jurisdiction shall be mandatorily
applicable, (b) to the extent that perfection and the effect of perfection of
the Lien of this Indenture may be governed by the laws of states other than
the State of Maine as provided by law, and (c) that the rights, duties,
obligations, immunities and standard of care of the Trustee shall be governed
by the laws of the jurisdiction in which its Corporate Trust Office shall be
located.
Section 0.16. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
Maturity or Stated Maturity of any Bond shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this Indenture
or of the Bonds other than a provision in Bonds of any series, or any Tranche
thereof, or in the indenture supplemental hereto which establishes the terms
of such Bonds or Tranche, which specifically states that such provision shall
apply in lieu of this Section) payment of interest or principal and premium,
if any, need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, at Maturity or at the Stated Maturity, and, if such payment is made or
duly provided for on such Business Day, no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Maturity or Stated Maturity, as the case may be, to such
Business Day.
Section 0.17. INVESTMENT OF CASH HELD BY TRUSTEE.
Any cash held by the Trustee or any Paying Agent under any
provision of this Indenture (other than unclaimed moneys held under Section
6.03(e)) shall, except as otherwise provided in Article Nine, at the request
of the Company evidenced by Company Order, be invested or reinvested in
Investment Securities designated by the Company and certified in such Company
Order to constitute Investment Securities, and any interest on such
Investment Securities shall be promptly paid over to the Company as received
free and clear of any Lien; PROVIDED, HOWEVER, that following the occurrence
and during the continuance of an Event of Default, the Trustee shall not pay
such interest over to the Company, but shall instead hold such interest as
part of the Mortgaged Property. Such Investment Securities shall be held
subject to the same provisions hereof as the cash used to purchase the same,
but upon a like request of the Company shall be sold, in whole or in
designated part, and the proceeds of such sale shall be held subject to the
same provisions hereof as the cash used to purchase the Investment Securities
so sold. If such sale shall produce a net sum less than the cost of the
Investment Securities so sold, the Trustee shall have no liability for such
deficiency and the Company shall pay to the Trustee or any such Paying Agent,
as the case may be, such amount in cash as, together with the net proceeds
from such sale, shall equal the cost of the Investment Securities so sold,
and if such sale shall produce a net sum greater than the cost of the
Investment Securities so sold, the Trustee or any such Paying Agent, as the
case may be, shall, upon Company Order, promptly pay over to the Company an
amount in cash equal to such excess, free and clear of any Lien.
Section 0.18. APPROVAL OF SIGNERS.
The acceptance by the Trustee of any document, the signer of
which is required by some provision hereof to be approved by the Trustee,
shall be sufficient evidence of its approval of the signer within the meaning
of this Indenture.
ARTICLE TWO
BOND FORMS
Section
1.001. FORMS GENERALLY.
(a) The definitive Bonds of each series shall be in
substantially the forms established in the indenture supplemental hereto
establishing such series, or in a Board Resolution relating to such
series, or in an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, in any case with such appropriate
insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture (including, without limitation,
as are appropriate for the establishment of a global security to be
registered in the name of a depository or its nominee), and may have
such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may be required to comply with the
rules of any securities exchange or depository or as may, consistently
herewith, be determined by the officers executing such Bonds, as
evidenced by their execution of the Bonds. If the forms of Bonds of any
series are established in a Board Resolution or in an Officer's
Certificate pursuant to a Board Resolution, such Board Resolution and
Officer's Certificate, if any, shall be delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by clause (ii)
of Section 4.01(a) for the authentication and delivery of such Bonds.
(b) The Bonds of each series shall be issuable in registered
form without coupons. The definitive Bonds shall be produced in such
manner as shall be determined by the officers executing such Bonds, as
evidenced by their execution thereof.
Section 1.002. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Bonds of the series designated therein
referred to in the within-mentioned Indenture.
Chemical Bank,
as Trustee
By:________________________
Authorized Officer
ARTICLE THREE
THE BONDS
Section
1.001. LIMIT ON AMOUNT OF BONDS; ISSUABLE IN SERIES.
(a) The aggregate principal amount of Bonds which may be
authenticated and delivered under this Indenture shall be unlimited.
(b) The Bonds may be issued in one or more series. Subject
to subsection (c) of this Section, there shall be established in one or
more indentures supplemental hereto, or in a Board Resolution, or an
Officer's Certificate pursuant to a supplemental indenture or a Board
Resolution, prior to the issuance of Bonds of any series:
(i) the title of the Bonds of such series
(which title shall contain the words "General and Refunding
Mortgage Bonds" but shall otherwise distinguish the Bonds of
such series from Bonds of all other series);
(ii) any limit upon the aggregate principal amount of
the Bonds of such series which may be authenticated and
delivered under this Indenture (except for Bonds authenticated
and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Bonds of such series pursuant to
Section 3.04, 3.05, 3.06, 5.06 or 14.06 and except for any
Bonds which, pursuant to Section 3.03(d), are deemed never to
have been authenticated and delivered hereunder);
(iii) the Person (without specific
identification) to whom interest on the Bonds of such series,
or any Tranche thereof, shall be payable on any Interest
Payment Date, if other than the Person in whose name that Bond
(or one or more Predecessor Bonds) is registered at the close
of business on the Regular Record Date for such interest;
(iv) the date or dates on which the
principal of the Bonds of such series (including any scheduled
amortization payments payable prior to the final Maturity of
the Bonds) is payable;
(v) the rate or rates at which the Bonds
of such series, or any Tranche thereof, shall bear interest,
if any (including the rate or rates at which overdue
principal, premium or interest shall bear interest, if any),
or any method or methods by which such rate or rates shall be
determined, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date for the interest
payable on the Bonds on any Interest Payment Date; and the
basis of computation of interest, if other than as provided in
Section 3.10;
(vi) the place or places where (A) the
principal of (including installments of principal, if any,
payable prior to the final Maturity of the Bonds) and premium,
if any, and interest, if any, on the Bonds of such series, or
any Tranche thereof, shall be payable upon presentation
thereof (and, if payments of principal are to be paid prior to
the final Maturity thereof without surrender of a certificate
evidencing the Bonds, the method, if any, of evidencing the
payment of such principal amounts), (B) any Bonds of such
series, or any Tranche thereof, may be surrendered for
registration of transfer, (C) Bonds of such series, or any
Tranche thereof, may be surrendered for exchange, and (D)
notices and demands to or upon the Company in respect of the
Bonds of such series, or any Tranche thereof, and this
Indenture may be served;
(vii) the period or periods within which,
the price or prices at which and the terms and conditions upon
which the Bonds of such series, or any Tranche thereof, may be
redeemed, in whole or in part, at the option of the Company;
(viii) the obligation, if any, of the
Company to redeem or purchase the Bonds of such series, or any
Tranche thereof, pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period
or periods within which, the price or prices at which and the
terms and conditions upon which such Bonds shall be redeemed
or purchased, in whole or in part, pursuant to such
obligation;
(ix) the denominations in which Bonds, if
any, of such series, or any Tranche thereof, shall be issuable
if other than denominations of $1,000 and any integral
multiple thereof;
(x) the currency or currencies, including
composite currencies, in which payment of the principal of and
premium, if any, and interest, if any, on the Bonds of such
series, or any Tranche thereof, shall be payable (if other
than in Dollars); PROVIDED, HOWEVER, that, unless otherwise
expressly provided herein, for purposes of calculations under
this Indenture (including, without limitation, calculations of
Annual Interest Requirements contemplated by Section 1.03 and
calculations of principal amount under Article Four), any
amounts denominated in a currency other than Dollars or in a
composite currency shall be converted to Dollar equivalents by
calculating the amount of Dollars which could have been
purchased by the amount of such other currency based (A) on
the average of the mean of the buying and selling spot rates
quoted by three banks which are members of the New York
Clearing House Association selected by the Company in effect
at 11:00 A.M. (New York time) in The City of New York on the
fifth Business Day preceding the date of such calculation, or
(B) if on such fifth Business Day it shall not be possible or
practical to obtain such quotations from such three banks, on
such other quotations or alternative methods of determination
as shall be selected by an Authorized Executive Officer and
which shall be reasonably acceptable to the Trustee;
(xi) if the principal of or premium, if
any, or interest, if any, on the Bonds of such series, or any
Tranche thereof, are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency other than
that in which the Bonds are stated to be payable, the period
or periods within which, and the terms and conditions upon
which, such election may be made;
(xii) if the principal of or premium, if
any, or interest, if any, on the Bonds of such series, or any
Tranche thereof, are to be payable, or are to be payable at
the election of the Company or a Holder thereof, in securities
or other property, the type and amount of such securities or
other property, or the method by which such amount shall be
determined, and the period or periods within which, and the
terms and conditions upon which, any such election may be
made; PROVIDED, HOWEVER, that, notwithstanding any provision
of this Indenture to the contrary, for purposes of
calculations under this Indenture (including without
limitation calculations under Article Four), any such election
shall be disregarded;
(xiii) if the amount of payments of
principal of or premium, if any, or interest, if any, on the
Bonds of such series, or any Tranche thereof, may be
determined with reference to an index or other fact or event
ascertainable outside of this Indenture, the manner in which
such amounts shall be determined;
(xiv) if other than the principal amount
thereof, the portion of the principal amount of Bonds of such
series, or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant
to Section 10.02(a);
(xv) the terms, if any, pursuant to which
the Bonds of such series, or Tranche thereof, may be converted
into or exchanged for shares of capital stock or other
securities of the Company or any other Person;
(xvi) the obligations or instruments, if
any, which shall be considered Eligible Obligations in respect
of the Bonds of such series, or any Tranche thereof,
denominated in a currency other than Dollars or in a composite
currency, and any additional or alternative provisions for the
reinstatement of the Company's indebtedness in respect of such
Bonds after the satisfaction and discharge thereof as provided
in Section 9.01;
(xvii) if a service charge will be made for
the registration of transfer or exchange of Bonds of such
series, or any Tranche thereof, the amount or terms thereof;
(xviii) any exceptions to Section 1.16, or
variation in the definition "Business Day", with respect to
the Bonds of such series, or any Tranche thereof; and
(xix) any other terms of the Bonds of such
series, or any Tranche thereof, not inconsistent with the
provisions of this Indenture (including, without limitation,
as are appropriate for the establishment of a global security
to be registered in the name of a depository or its nominee).
(c) With respect to Bonds of a series subject to a Periodic
Offering, the indenture supplemental hereto which establishes such
series or the Board Resolution or Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, as the case may be, may
provide general terms or parameters for Bonds of such series and provide
either that the specific terms of particular Bonds of such series shall
be specified in a Company Order or that such terms shall be determined
by the Company or its agent in accordance with a Company Order as
contemplated by clause (ii) of Section 4.01(a).
Section 1.002. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 3.01 with
respect to any series of Bonds, the Bonds of each series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 1.003. EXECUTION, DATING, CERTIFICATE OF
AUTHENTICATION.
(a) The Bonds shall be executed on behalf of the Company by
an Authorized Executive Officer, and may have the corporate seal of the
Company affixed thereto reproduced thereon and attested by any other
Authorized Executive Officer. The signature of any or all of these
officers on the Bonds may be manual or facsimile.
(b) Bonds bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Bonds or did not hold such offices at the date of such
Bonds.
(c) Each Bond shall be dated the date of its authentication.
(d) No Bond shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears
on such Bond a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating Agent
by manual signature of an authorized officer thereof, and such
certificate upon any Bond shall be conclusive evidence, and the only
evidence, that such Bond has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Bond shall have been authenticated
and delivered hereunder to the Company, or any Person acting on its
behalf, but shall never have been issued and sold by the Company, and
the Company shall deliver such Bond to the Bond Registrar for
cancellation or shall cancel such Bond and deliver evidence of such
cancellation to the Trustee, in each case as provided in Section 3.09,
together with a written statement (which need not comply with Section
1.05 and need not be accompanied by an Opinion of Counsel) stating that
such Bond has never been issued and sold by the Company, for all
purposes of this Indenture such Bond shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits hereof.
Section 1.004. TEMPORARY BONDS.
(a) Pending the preparation of definitive Bonds of any
series or Tranche, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Bonds which are
printed, lithographed, typewritten, mimeographed, photocopied or
otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Bonds in lieu of which they are issued, with
such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Bonds may determine, as
evidenced by their execution of such Bonds, PROVIDED, HOWEVER, that
temporary Bonds need not recite specific redemption, sinking fund,
conversion or exchange provisions.
(b) After the preparation of definitive Bonds of such series
or Tranche, the temporary Bonds of such series or Tranche shall be
exchangeable for definitive Bonds of such series or Tranche upon
surrender of the temporary Bonds of such series or Tranche at the office
or agency of the Company maintained pursuant to Section 6.02 in a Place
of Payment for such series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Bonds of any
series or Tranche, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor definitive Bonds of the
same series or Tranche, of authorized denominations and of like tenor
and aggregate principal amount.
(c) Until exchanged in full as hereinabove provided, the
temporary Bonds shall in all respects be entitled to the same benefits
under this Indenture as definitive Bonds of the same series or Tranche
and of like tenor authenticated and delivered hereunder.
Section 1.005. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
(a) The Company shall cause to be kept in one of the offices
designated pursuant to Section 6.02 a register (the register kept in
accordance with this Section being referred to herein as the "Bond
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Bonds and
the registration of transfer thereof. The Person maintaining the Bond
Register is referred to herein as the "Bond Registrar." Anything herein
to the contrary notwithstanding, the Company may designate one of its
offices as the office in which the Bond Register shall be maintained, in
which event the Company shall act as Bond Registrar.
(b) Upon surrender for registration of transfer of any Bond
of a series at the office or agency of the Company maintained pursuant
to Section 6.02 in a Place of Payment for such series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Bonds of the
same series and Tranche, of authorized denominations and of like tenor
and aggregate principal amount.
(c) At the option of the Holder, any Bond may be exchanged
for one or more new Bonds of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount, upon
surrender of the Bonds to be exchanged at any such office or agency.
Whenever any Bonds are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Bonds which
the Holder making the exchange is entitled to receive.
(d) All Bonds issued upon any registration of transfer or
exchange of Bonds shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Bonds surrendered upon such registration of transfer
or exchange.
(e) Every Bond presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the
Trustee or any transfer agent) be duly endorsed or shall be accompanied
by a written instrument of transfer in form satisfactory to the Company
and the Bond Registrar or any transfer agent duly executed by the Holder
thereof or his attorney duly authorized in writing.
(f) Unless otherwise provided in an indenture supplemental
hereto, Board Resolution or Officer's Certificate with respect to Bonds
of any series, or any Tranche thereof, no service charge shall be made
for any registration of transfer or exchange of Bonds, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Bonds, other than exchanges
pursuant to Section 3.04, 5.06 or 14.06 not involving any transfer.
(g) The Company shall not be required to issue and the Bond
Registrar shall not be required to register the transfer of or to
exchange (a) Bonds of any series during a period of 15 days immediately
preceding the date notice is given identifying the serial numbers of the
Bonds of such series called for redemption, or (b) any Bond so selected
for redemption in whole or in part, except the unredeemed portion of any
Bond being redeemed in part.
Section 1.006. MUTILATED, DESTROYED, LOST AND STOLEN BONDS.
(a) If any mutilated Bond is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Bond of the same series and Tranche, and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
(b) If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the ownership of and the
destruction, loss or theft of any Bond, and (ii) such security or
indemnity as may be reasonably required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Bond has been acquired by a bona
fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Bond, a new Bond of the same series and Tranche, and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
(c) Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Bond has become or is about to
become due and payable, the Company in its discretion may, instead of
issuing a new Bond, pay such Bond.
(d) Upon the issuance of any new Bond under this Section,
the Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the
Trustee) connected therewith.
(e) Every new Bond of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Bond shall constitute
an original additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Bond shall be at any time enforceable
by anyone, and any such new Bond shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other
Bonds of such series duly issued hereunder.
(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Bonds.
Section 1.007. PAYMENT OF INTEREST; INTEREST RIGHTS
PRESERVED.
(a) Unless otherwise provided as contemplated by Section
3.01 with respect to the Bonds of any series, or any Tranche thereof,
interest on any Bond which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Bond (or one or more Predecessor Bonds) is registered
at the close of business on the Regular Record Date for such interest.
(b) Any interest on any Bond of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment
Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the related Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (i) or (ii)
below.
(i) The Company may elect to make payment
of any Defaulted Interest to the Persons in whose names the
Bonds of such series (or their respective Predecessor Bonds)
are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify
the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Bond of such series and the date
of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as
provided in this clause (i). Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall promptly cause
notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Bonds of such series at the
address of such Holder as it appears in the Bond Register, not
less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names
the Bonds of such series (or their respective Predecessor
Bonds) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the
following clause (ii).
(ii) The Company may make payment of any
Defaulted Interest on the Bonds of any series in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which such Bonds may be listed, and
upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause (ii), such manner of
payment shall be deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section and
Section 3.05, each Bond delivered under this Indenture upon registration
of, transfer of, or in exchange for, or in lieu of, any other Bond shall
carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Bond.
Section 1.008. PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Bond is registered as the
absolute owner of such Bond for the purpose of receiving payment of principal
of and premium, if any, and (subject to Sections 3.05 and 3.07) interest, if
any, on such Bond and for all other purposes whatsoever, whether or not such
Bond be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Section 1.009. CANCELLATION BY BOND REGISTRAR.
All Bonds surrendered for payment, redemption, registration of
transfer or exchange, or upon purchase or other acquisition by or on behalf
of the Company, shall, if surrendered to any Person other than the Bond
Registrar, be delivered to the Bond Registrar and, if not theretofore
canceled, shall be promptly canceled by the Bond Registrar. The Company may
at any time deliver to the Bond Registrar for cancellation any Bonds
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever or which the Company shall not have issued
and sold, and all Bonds so delivered shall be promptly canceled by the Bond
Registrar. No Bonds shall be authenticated in lieu of or in exchange for any
Bonds canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Bonds held by the Bond Registrar shall be
disposed of in accordance with a Company Order and the Bond Registrar shall
promptly deliver a certificate of disposition to the Company unless, by a
Company Order, the Company shall direct that canceled Bonds be returned to
it. The Bond Registrar shall promptly deliver evidence of any cancellation
of a Bond in accordance with this Section to the Trustee and the Company.
Section 0.10. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 3.01
for Bonds of any series, or any Tranche thereof, interest (if any) on the
Bonds of each series shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
Section 0.11. PAYMENT TO BE IN PROPER CURRENCY.
In the case of any Bonds denominated in any currency other
than Dollars or in a composite currency (the "Required Currency"), except as
otherwise provided therein, the obligation of the Company to make any payment
of the principal thereof, or the premium, if any, or interest, if any,
thereon, shall not be discharged or satisfied by any tender by the Company,
or recovery by the Trustee, in any currency other than the Required Currency,
except to the extent that such tender or recovery shall result in the Trustee
timely holding the full amount of the Required Currency then due and payable.
If any such tender or recovery is in a currency other than the Required
Currency, the Trustee may take such actions as it considers appropriate to
exchange such currency for the Required Currency. The costs and risks of any
such exchange, including without limitation the risks of delay and exchange
rate fluctuation, shall be borne by the Company, the Company shall remain
fully liable for any shortfall or delinquency in the full amount of Required
Currency then due and payable, and in no circumstances shall the Trustee be
liable therefor except in the case of its negligence or willful misconduct.
The Company hereby waives any defense of payment based upon any such tender
or recovery which is not in the Required Currency, or which, when exchanged
for the Required Currency by the Trustee, is less than the full amount of
Required Currency then due and payable.
ARTICLE FOUR
ISSUANCE OF BONDS
Section
1.001. GENERAL.
(a) Subject to the provisions of Section 4.02, 4.03, 4.04,
4.05 or 4.06, whichever may be applicable, the Trustee shall
authenticate and deliver Bonds of a series, for original issue, at one
time or from time to time in accordance with the Company Order referred
to below, upon receipt by the Trustee of:
(i) if the terms of such series are
established in an indenture supplemental hereto, Board
Resolution or Officer's Certificate, as contemplated by
Section 3.01, the indenture supplemental hereto, Board
Resolution or Officer's Certificate establishing such series;
(ii) a Company Order requesting the
authentication and delivery of such Bonds and, to the extent
that the terms of such Bonds shall not have been established
in the indenture supplemental hereto which established such
series or in a Board Resolution or in an Officer's
Certificate, all as contemplated by Section 3.01, either
establishing such terms or, in the case of Bonds of a series
subject to a Periodic Offering, specifying procedures,
acceptable to the Trustee, by which such terms are to be
established (which procedures may provide for authentication
and delivery pursuant to oral or electronic instructions from
the Company or any agent or agents thereof, which oral
instructions are to be promptly confirmed electronically or in
writing);
(iii) the Bonds of such series or Tranche,
executed on behalf of the Company as provided herein;
(iv) a Net Earnings Certificate showing
the Adjusted Net Earnings of the Company for the period
therein specified to have been not less than an amount equal
to two (2) times the Annual Interest Requirements therein
specified, all in accordance with the provisions of Section
1.03; PROVIDED, HOWEVER, that the Trustee shall not be
entitled to receive a Net Earnings Certificate hereunder if
the Bonds of such series are to have no Stated Interest Rate
prior to Maturity; and PROVIDED, FURTHER, that, with respect
to Bonds of a series subject to a Periodic Offering, other
than Bonds theretofore authenticated and delivered, (A) it
shall be assumed in such Net Earnings Certificate that none of
such Bonds shall have a Stated Interest Rate in excess of a
maximum rate to be stated therein, and no Bonds which would
have a Stated Interest Rate at the time of the initial
authentication and delivery thereof in excess of such maximum
rate shall be authenticated and delivered under the authority
of such Net Earnings Certificate, and (B)the Trustee shall be
entitled to receive such Net Earnings Certificate only once,
at or prior to the time of the first authentication and
delivery of the Bonds of such series (unless the Company Order
or the oral or electronic instructions referred to in clause
(ii) above requesting the authentication and delivery of such
Bonds is delivered on or after the date which is two years
after the most recent Net Earnings Certificate with respect to
such series was delivered pursuant to this clause (iv), in
which case this subclause (B) shall not apply);
(v) an Opinion of Counsel to the effect
that:
(A) the forms of such Bonds have been
duly authorized by the Company and have been established
in conformity with the provisions of this Indenture;
(B) the terms of such Bonds have been
duly authorized by the Company and have been established
in conformity with the provisions of this Indenture; and
(C) such Bonds, when authenticated and
delivered by the Trustee and issued and delivered by the
Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been
duly issued under this Indenture and will constitute
valid and legally binding obligations of the Company,
entitled to the benefits provided by this Indenture, and
enforceable in accordance with their terms, subject to
the Customary Exceptions;
PROVIDED, HOWEVER, that, with respect to Bonds of a series
subject to a Periodic Offering, the Trustee shall be entitled
to receive such Opinion of Counsel only once at or prior to
the time of the first authentication and delivery of Bonds of
such series and that the opinions described in subclauses (B)
and (C) of clause (v) above may state, respectively:
(1) that, when the terms of such Bonds
shall have been established pursuant to a Company Order
or Orders or pursuant to such procedures as may be
specified from time to time by a Company Order or
Orders, all as contemplated by and in accordance with
the indenture supplemental hereto, Board Resolution or
Officer's Certificate delivered pursuant to clause (i)
above, such terms will have been duly authorized by the
Company and will have been established in conformity
with the provisions of this Indenture; and
(2) that such Bonds, when
authenticated and delivered by the Trustee in accordance
with this Indenture and the Company Order or Orders or
the specified procedures referred to in subclause (1)
above and issued and delivered by the Company in the
manner and subject to any conditions specified in such
Opinion of Counsel, will have been duly issued under
this Indenture and will constitute valid and legally
binding obligations of the Company, entitled to the
benefits provided by this Indenture, and enforceable in
accordance with their terms, subject to the Customary
Exceptions;
(vi) an Officer's Certificate to the
effect that, to the knowledge of the signer, no Event of
Default, or event which with notice or lapse of time or both
would constitute an Event of Default, has occurred and is
continuing; PROVIDED, HOWEVER, that with respect to Bonds of a
series subject to a Periodic Offering, either (A) such an
Officer's Certificate shall be delivered at the time of the
authentication and delivery of each Bond of such series, or
(B) the Officer's Certificate delivered at the time of the
first authentication and delivery of the Bonds of such series
shall state that the statements therein shall be deemed to be
made at the time of each subsequent authentication and
delivery of Bonds of such series; and
(vii) such other Opinions of Counsel,
certificates and other documents as may be required under
Section 4.02, 4.03, 4.04 or 4.05, whichever may be applicable
to the authentication and delivery of the Bonds of such
series.
(b) With respect to Bonds of a series subject to a Periodic
Offering, the Trustee may conclusively rely, as to the authorization by
the Company of any of such Bonds, the forms and terms thereof, the
legality, validity, binding effect and enforceability thereof and the
compliance of the authentication and delivery thereof with the terms and
conditions of this Indenture, upon the Opinion or Opinions of Counsel
and the certificates and other documents delivered pursuant to this
Article Four at or prior to the time of the first authentication and
delivery of Bonds of such series until any of such opinions,
certificates or other documents have been superseded or revoked or
expire by their terms.
(c) In connection with the authentication and delivery of
Bonds of a series subject to a Periodic Offering, the Trustee shall be
entitled to assume that the Company's instructions to authenticate and
deliver such Bonds do not violate any laws with respect to, or any
rules, regulations or orders of, any governmental agency or commission
having jurisdiction over the Company.
Section 1.002. ISSUANCE OF BONDS ON THE BASIS OF PLEDGED
BONDS; DISPOSITION AND EXCHANGE OF BANK COLLATERAL BONDS.
(a) Bonds of any one or more series may be authenticated and
delivered upon the basis of, and in an aggregate principal amount not
exceeding, the aggregate principal amount of Unbonded Class "A" Bonds
issued and delivered to the Trustee for such purpose.
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of the issuance and delivery to
the Trustee of Class "A" Bonds until the Trustee shall have received:
(i) Class "A" Bonds (A) maturing on such
dates and in such principal amounts that, at each Stated
Maturity of the Bonds of such series (or the Tranche thereof
then to be authenticated and delivered), there shall mature
Class "A" Bonds equal in principal amount to the Bonds of such
series or Tranche then to mature, and (B) containing, in
addition to any mandatory redemption provisions applicable to
all Class "A" Bonds Outstanding under the related Class "A"
Mortgage, mandatory redemption provisions correlative to the
provisions, if any, for the mandatory redemption (pursuant to
a sinking fund or otherwise) of the Bonds of such series or
Tranche or for the redemption thereof at the option of the
Holder; it being expressly understood that such Class "A"
Bonds (1) may, but need not, bear interest, any such interest
to be payable at the same times as interest on the Bonds of
such series or Tranche, (2) may, but need not, contain
provisions for the redemption thereof at the option of the
Company, any such redemption to be made at a redemption price
or prices not less than the principal amount thereof, and (3)
shall be held by the Trustee in accordance with Article Seven;
(ii) the documents with respect to the
Bonds of such series specified in Section 4.01; PROVIDED,
HOWEVER, that no Net Earnings Certificate shall be required to
be delivered if there shall be delivered an Officer's
Certificate to the effect that such Class "A" Bonds have been
authenticated and delivered under the related Class "A"
Mortgage on the basis of retired Class "A" Bonds, except that
a Net Earnings Certificate shall nevertheless be required to
be delivered if:
(A) the Stated Maturity of the Class
"A" Bonds on the basis of which the Class "A" Bonds to
be made the basis of the authentication and delivery of
Bonds under this Section are to be or have been
authenticated and delivered under the related Class "A"
Mortgage is a date more than five years after the date
of the Company Order requesting the authentication and
delivery of such Bonds under this Section; and
(B) the Stated Interest Rate, if any,
on such retired Class "A" Bonds in effect immediately
prior to Maturity is less than the Stated Interest Rate,
if any, on such Bonds to be in effect upon the initial
authentication and delivery thereof (such Stated
Interest Rate to be determined, in the case of a series
subject to a Periodic Offering, as provided in Section
4.01(a)(iv));
(iii) an Opinion of Counsel to the effect
that:
(A) the forms of such Class "A" Bonds
have been duly authorized by the Company and have been
established in conformity with the provisions of the
related Class "A" Mortgage;
(B) the terms of such Class "A" Bonds
have been duly authorized by the Company and have been
established in conformity with the provisions of the
related Class "A" Mortgage; and
(C) such Class "A" Bonds have been
duly issued under the related Class "A" Mortgage and
constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by such Class
"A" Mortgage, and enforceable in accordance with their
terms, subject to the Customary Exceptions;
PROVIDED, HOWEVER, that, with respect to Bonds of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication and
delivery of Bonds of such series (and shall be entitled to rely on such
Opinion of Counsel with respect to the Class "A" Bonds to the same extent as
provided in Section 4.01(b)) and that the opinions described in subclauses
(B) and (C) of clause (iii) above may state, respectively:
(1) that, when the terms of such Class
"A" Bonds shall have been established in accordance with
the instrument or instruments creating the series of
which such Class "A" Bonds are a part, such terms will
have been duly authorized by the Company and will have
been established in conformity with the provisions of
the related Class "A" Mortgage; and
(2) that such Class "A" Bonds, when
authenticated and delivered by the trustee under the
related Class "A" Mortgage in accordance with such
instrument or instruments and issued and delivered by
the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been
duly issued under such Class "A" Mortgage, and will
constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by such Class
"A" Mortgage, and enforceable in accordance with their
terms, subject to the Customary Exceptions; and
(iv) an Officer's Certificate stating that
no part of the principal amount of the Class "A" Bonds upon
the basis of which the Bonds are to be authenticated and
delivered has theretofore been Bonded.
(c) The Bank Collateral Bonds shall be assigned to the
Trustee from time to time as contemplated by the 1936 Mortgage and held
as security for all Bonds Outstanding. Notwithstanding any other
provision of this Indenture to the contrary, unless an Event of Default
shall have occurred and be continuing, and provided that the Trustee
shall have received a Company Order citing this subsection and an
Officer's Certificate stating that no Event of Default has occurred and
is continuing, the Trustee shall execute appropriate documents and
instruments (in the form provided by the Company) releasing without
recourse the interest of the Trustee in and the Lien of this Indenture
on all or a specified portion of the Bank Collateral Bonds, and shall
deliver such Bank Collateral Bonds (i) to the Company, upon the maturity
of such Bank Collateral Bonds, without any payment of principal being or
required to be made thereon, (ii) to the Company, in exchange for an
equal principal amount of Pledged Bonds to be concurrently issued by the
Company to the Trustee under Section 29 of the 1936 Mortgage as the
basis for the authentication and delivery of Bonds in compliance with
this Section, or (iii) to the trustee under the 1936 Mortgage
concurrently with the delivery of all Pledged Bonds to such trustee
pursuant to Section 7.07. The Company shall deliver any Bank Collateral
Bonds received by it from the Trustee to the trustee under the 1936
Mortgage for cancellation.
Section 1.003. ISSUANCE OF BONDS ON THE BASIS OF PROPERTY
ADDITIONS.
(a) Bonds of any one or more series may be authenticated and
delivered upon the basis of Property Additions which do not constitute
Bonded Property Additions in a principal amount not exceeding seventy-
five percent (75%) of the balance of the Cost or of the Fair Value of
such Unbonded Property Additions to the Company (whichever shall be
less) after making any deductions and any additions pursuant to Section
1.04(b).
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of Property Additions until the
Trustee shall have received:
(i) the documents with respect to the
Bonds of such series specified in Section 4.01;
(ii) an Engineer's Certificate dated as of
a date not more than ninety (90) days prior to the date of the
Company Order requesting the authentication and delivery of
such Bonds:
(A) describing in reasonable detail
all such property and stating that all such property
constitutes Property Additions;
(B) stating that such Property
Additions are desirable for use in the proper conduct of
the business of the Company;
(C) stating that no part of such
Property Additions is then Bonded;
(D) stating the Cost of Property
Additions made the basis for such application;
(E) stating, except as to Property
Additions acquired, made or constructed wholly through
the delivery of securities or other property, that the
amount of cash forming all or part of the Cost thereof
was equal to or more than an amount to be stated
therein;
(F) briefly describing, with respect
to any Property Additions acquired, made or constructed
in whole or in part through the delivery of securities
or other property, the securities or other property so
delivered and stating the date of such delivery;
(G) stating what part, if any, of such
Property Additions includes property which within six
months prior to the date of acquisition thereof by the
Company had been used or operated by others than the
Company in a business similar to that in which it has
been or is to be used or operated by the Company and
stating whether or not, in the judgment of the signers,
the Fair Value thereof to the Company, as of the date of
such certificate, is less than Twenty-Five Thousand
Dollars ($25,000) and whether or not such Fair Value is
less than one percent (1%) of the aggregate principal
amount of Bonds then Outstanding (subject to the
Percentage Calculation Proviso);
(H) stating, in the judgment of the
signers, the Fair Value to the Company, as of the date
of such certificate, of such Property Additions, except
any thereof with respect to the Fair Value to the
Company of which a statement is to be made in an
Independent Engineer's Certificate as provided for in
clause (iii) below;
(I) stating the amount (if any)
required to be deducted under clause (i) of Section
1.04(b) and the amount (if any) elected to be added
under subclauses (A) and (B) of clause (ii) of Section
1.04(b);
(J) stating the amount of such
Property Additions remaining after any deductions or
additions pursuant to subclause (I); and
(K) stating that the Liens, if any, of
the character described in clause (e) of the definition
of "Permitted Liens" to which any property included in
such Property Additions is subject do not, in the
judgment of the signers, materially impair the use of
such property for the purposes for which the same is
held by the Company;
(iii) in case any Property Additions are
shown by the Engineer's Certificate provided for in clause
(ii) above to include property which, within six months prior
to the date of acquisition thereof by the Company, had been
used or operated by others than the Company in a business
similar to that in which it has been or is to be used or
operated by the Company and such certificate does not show the
Fair Value thereof to the Company, as of the date of such
certificate, to be less than Twenty-Five Thousand Dollars
($25,000) or less than one percent (1%) of the aggregate
principal amount of Bonds then Outstanding (subject to the
Percentage Calculation Proviso), an Independent Engineer's
Certificate stating, in the judgment of the signer, the Fair
Value to the Company, as of the date of such Independent
Engineer's Certificate, of (A) such Property Additions which
have been so used or operated and (at the option of the
Company) as to any other Property Additions included in the
Engineer's Certificate provided for in clause (ii) above, and
(B) in case such Independent Engineer's Certificate is being
delivered in connection with the authentication and delivery
of Bonds, any property so used or operated which has been
subjected to the Lien of this Indenture since the commencement
of the then current calendar year as the basis for the
authentication and delivery of Bonds and as to which an
Independent Engineer's Certificate has not previously been
furnished to the Trustee;
(iv) in case any Property Additions are
shown by the Engineer's Certificate provided for in clause
(ii) above to have been acquired, made or constructed in whole
or in part through the delivery of securities or other
property, a written appraisal of an Engineer stating, in the
judgment of the Engineer, the Fair Value in cash of such
securities or other property at the time of delivery thereof
in payment for or for the acquisition of such Property
Additions;
(v) an Opinion of Counsel to the effect:
(A) that (except as to paving, grading
and other improvements to, under or upon highways,
bridges, parks or other public property of analogous
character) this Indenture is, or upon the delivery of,
or the filing or recording in the proper places and
manner of, the instruments of conveyance, assignment or
transfer, if any, specified in said opinion, will be, a
Lien on all the Property Additions to be made the basis
of the authentication and delivery of such Bonds,
subject to no Lien thereon prior to the Lien of this
Indenture except Permitted Liens, the Lien of the 1936
Mortgage and the Lien of any other Class "A" Mortgage;
and
(B) that the Company has corporate
authority to operate the Property Additions with respect
to which such application is made; and
(vi) copies of the instruments of
conveyance, assignment and transfer, if any, specified in the
Opinion of Counsel provided for in clause (v) above.
(c) The amount of the Cost of any Property Additions and the
Fair Value thereof to the Company and the Fair Market Value in cash of
any securities or other property so delivered in payment therefor or for
the acquisition thereof and the amount of any deductions and any
additions made pursuant to Section 1.04 shall be determined for the
purposes of this Section by the appropriate certificate provided for in
this Section.
Section 1.004. ISSUANCE OF BONDS ON THE BASIS OF RETIRED
BONDS.
(a) Bonds of any one or more series may be authenticated and
delivered upon the basis of, and in an aggregate principal amount not
exceeding the aggregate principal amount of, Unbonded Retired Bonds.
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of Retired Bonds until the
Trustee shall have received:
(i) the documents with respect to the
Bonds of such series specified in Section 4.01; PROVIDED,
HOWEVER, that no Net Earnings Certificate shall be required to
be delivered unless:
(A) the Stated Maturity of the Retired
Bonds to be made the basis of the authentication and
delivery of such Bonds under this Section is a date more
than five years after the date of the Company Order
requesting the authentication and delivery of such
Bonds; and
(B) the Stated Interest Rate, if any,
on such Retired Bonds in effect immediately prior to
Maturity is less than the Stated Interest Rate, if any,
on such Bonds to be in effect upon the initial
authentication and delivery thereof (such Stated
Interest Rate to be determined, in the case of a series
subject to a Periodic Offering, as provided in Section
4.01(a)(iv)); and
(ii) an Officer's Certificate stating that
Retired Bonds, specified by series, in an aggregate principal
amount not less than the aggregate principal amount of Bonds
to be authenticated and delivered, have theretofore been
authenticated and delivered and, as of the date of such
Officer's Certificate, constitute Retired Bonds and are the
basis for the authentication and delivery of such Bonds.
Section 1.005. ISSUANCE OF BONDS UPON DEPOSIT OF CASH WITH
TRUSTEE.
(a) Bonds of any one or more series may be authenticated and
delivered upon the basis of, and in an aggregate principal not exceeding
the amount of, any deposit with the Trustee of cash for such purpose.
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of the deposit of cash until the
Trustee shall have received the documents with respect to the Bonds of
such series specified in Section 4.01.
(c) All cash deposited with the Trustee under the provisions
of this Section, and all cash required by Section 7.02(a) to be applied
in accordance with the provisions of this Section, shall be held by the
Trustee as a part of the Mortgaged Property and may be withdrawn from
time to time by the Company, upon application of the Company to the
Trustee, in an amount equal to the aggregate principal amount of Bonds
to the authentication and delivery of which the Company shall be
entitled under any of the provisions of this Indenture by virtue of
compliance with all applicable provisions of this Indenture (except as
otherwise provided in subsection (d) of this Section). If such
application is made pursuant to Section 4.02, then such application
must be made prior to the maturity of the Bonds authenticated and
delivered pursuant to this Section on the basis of the cash to be so
withdrawn, and the terms of the Class "A" Bonds made the basis of such
application shall, to the extent required by Section 4.02(b)(i),
correspond to the terms of such Bonds.
(d) Upon any such application for withdrawal, the Company
shall comply with all applicable provisions of this Indenture relating
to the authentication and delivery of Bonds except that the Company
shall not in any event be required to comply with Section 4.01 or to
deliver a Net Earnings Certificate.
(e) Any withdrawal of cash under subsection (c) of this
Section shall operate as a waiver by the Company of its right to the
authentication and delivery of the Bonds on which it is based and such
Bonds may not thereafter be authenticated and delivered hereunder. Any
Property Additions which have been made the basis of any such right to
the authentication and delivery of Bonds so waived shall have the status
of Bonded Property Additions and shall be deemed to have been made the
basis of the withdrawal of such cash; any Retired Bonds which have been
made the basis of any such right to the authentication and delivery of
Bonds so waived shall be deemed to have been made the basis of the
withdrawal of such cash; and any Pledged Bonds which have been made the
basis of any such right to the authentication and delivery of Bonds so
waived shall be deemed to have been made the basis of the withdrawal of
such cash.
(f) If at any time the Company shall so direct, any sums
deposited with the Trustee under the provisions of this Section may be
used or applied to the purchase, redemption or payment of Bonds in the
manner and subject to the conditions provided in clauses (iv) and (v) of
Section 8.06(a); PROVIDED, HOWEVER, that, none of such cash shall be
applied to the payment of more than the principal amount of any Bonds so
purchased, redeemed or paid, except to the extent that the aggregate
principal amount of all Bonds theretofore, and of all Bonds then to be,
purchased, redeemed or paid with cash deposited under this Section is
not less than the aggregate cost (certified to the Trustee in an
Officers' Certificate) for principal, premium, if any, interest, if any,
and brokerage commission, if any, on or with respect to all Bonds
theretofore, and on or with respect to all Bonds then to be, purchased,
redeemed or paid with cash so deposited.
Section 1.006. ISSUANCE OF GENERAL AND REFUNDING MORTGAGE
BONDS, SERIES A.
(a) At any time after the execution and delivery of this
Indenture (whether before or after the recording hereof), upon the
application of the Company, a series of Bonds entitled "General and
Refunding Mortgage Bonds, Series A" may be authenticated and delivered
by the Trustee in an aggregate principal amount not exceeding
$126,000,000.
(b) No Series A Bonds shall be authenticated and delivered by
the Trustee until the Trustee shall have received the documents with
respect to the Series A Bonds specified in Section 4.01 (PROVIDED,
HOWEVER, that no Net Earnings Certificate shall be required to be
delivered) and Sections 4.02, 4.03, 4.04 and 4.05 need not be complied
with.
ARTICLE FIVE
REDEMPTION OF BONDS
Section
1.001. APPLICABILITY OF ARTICLE.
Bonds of any series, or any Tranche thereof, which are
redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by
Section 3.01 for Bonds of such series or Tranche) in accordance with this
Article.
Section 1.002. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Bonds shall be
evidenced by a Board Resolution or an Officer's Certificate. The Company
shall, at least 45 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee in writing of such Redemption Date and of the series, Tranche and
principal amount of such Bonds to be redeemed. In the case of any redemption
of Bonds (a) prior to the expiration of any restriction on such redemption
provided in the terms of such Bonds or elsewhere in this Indenture, or (b)
pursuant to an election of the Company which is subject to a condition
specified in the terms of such Bonds, the Company shall furnish the Trustee
with an Officer's Certificate evidencing compliance with such restriction or
condition.
Section 1.003. SELECTION OF BONDS TO BE REDEEMED.
(a) If less than all the Bonds of any series, or any Tranche
thereof, are to be redeemed, the particular Bonds (or portions thereof)
to be redeemed shall be selected by the Bond Registrar from the
Outstanding Bonds of such series or Tranche not previously called for
redemption, by such method as shall be provided for any particular
series, or, in the absence of any such provision, by such method as the
Bond Registrar shall deem fair and appropriate and which may, in any
case, provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Bonds of such series or Tranche or
any integral multiple thereof) of the principal amount of Bonds of such
series or Tranche of a denomination larger than the minimum authorized
denomination for Bonds of such series or Tranche; PROVIDED, HOWEVER,
that if, as indicated in an Officer's Certificate, the Company shall
have offered to purchase all Bonds then Outstanding of any series, or
any Tranche thereof, and less than all of such Bonds shall have been
tendered to the Company for such purchase, the Bond Registrar, if so
directed by Company Order, shall select for redemption all such Bonds
which have not been so tendered.
(b) The Bond Registrar shall promptly notify the Company and
the Trustee in writing of the Bonds selected for redemption and, in the
case of any Bonds selected to be redeemed in part, the principal amount
thereof to be redeemed.
(c) For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Bonds
shall relate, in the case of any Bonds redeemed or to be redeemed only
in part, to the portion of the principal amount of such Bonds which has
been or is to be redeemed.
Section 1.004. NOTICE OF REDEMPTION.
(a) Notice of redemption shall be given in the manner
provided in Section 1.09 to the Holders of the Bond to be redeemed not
less than 30 days prior to the Redemption Date.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) if less than all the Bonds of any
series or Tranche are to be redeemed, the identification of
the particular Bonds to be redeemed and the portion of the
principal amount of any Bond to be redeemed in part;
(iv) that on the Redemption Date the Redemption Price,
together with accrued interest, if any, to the Redemption
Date, will become due and payable upon each such Bond to be
redeemed and, if applicable, that interest thereon will cease
to accrue on and after said date;
(v) the place or places where such Bonds
are to be surrendered for payment of the Redemption Price;
(vi) that the redemption is for a sinking or other fund,
if such is the case; and
(vii) such other matters as the Company shall deem
desirable or appropriate.
(c) With respect to any notice of redemption of Bonds at the
election of the Company, unless, upon the giving of such notice, such
Bonds shall be deemed to have been paid in accordance with Section 9.01,
such notice may state that such redemption shall be conditional upon the
receipt by the Trustee, on or prior to the date fixed for such
redemption, of money sufficient to pay the principal of and premium, if
any, and interest, if any, on such Bonds and that if such money shall
not have been so received such notice shall be of no force or effect and
the Company shall not be required to redeem such Bonds. In the event
that such notice of redemption contains such a condition and such money
is not so received, the redemption shall not be made and within a
reasonable time thereafter notice shall be given, in the manner in which
the notice of redemption was given, that such money was not so received
and such redemption was not required to be made.
(d) Notice of redemption of Bonds to be redeemed at the
election of the Company, and any notice of non-satisfaction of a
condition for redemption as aforesaid, shall be given by the Company or,
at the Company's request, by the Bond Registrar in the name and at the
expense of the Company. Notice of mandatory redemption of Bonds shall
be given by the Bond Registrar in the name and at the expense of the
Company.
Section 1.005. BONDS PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the Bonds
or portions thereof so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified, and from and after
such date (unless, in the case of an unconditional notice of redemption, the
Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Bonds or portions thereof, if interest-bearing, shall
cease to bear interest. Upon surrender of any such Bond for redemption in
accordance with such notice, such Bond or portion thereof shall be paid by
the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; PROVIDED, HOWEVER, that any installment of interest
on any Bond the Stated Maturity of which is on or prior to the Redemption
Date shall be payable to the Holder of such Bond, or one or more Predecessor
Bonds, registered as such at the close of business on the related Regular
Record Date according to the terms of such Bond and subject to the provisions
of Section 3.07.
Section 1.006. BONDS REDEEMED IN PART.
Any Bond which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder
of such Bond, without service charge, a new Bond or Bonds of the same series
and Tranche, of any authorized denomination requested by such Holder and of
like tenor and in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Bond so surrendered; PROVIDED,
HOWEVER, that the payment of any principal in accordance with the scheduled
amortization payments specified for the Bonds of any series, or any Tranche
thereof, as contemplated by Section 3.01, shall not constitute a redemption
in part subject to this Section 5.06 (except as otherwise specified as
contemplated by Section 3.01 for Bonds of such series or Tranche).
ARTICLE SIX
REPRESENTATIONS AND COVENANTS
Section
1.001. PAYMENT OF BONDS; LAWFUL POSSESSION; MAINTENANCE OF LIEN.
(a) The Company shall pay the principal of and premium, if
any, and interest, if any, on the Bonds of each series in accordance
with the terms of such Bonds and this Indenture.
(b) At the date of the execution and delivery of this
Indenture, the Company is lawfully possessed of the Mortgaged Property
and has good right and lawful authority to mortgage and pledge the
Mortgaged Property.
(c) The Company shall maintain and preserve the Lien of this
Indenture so long as any Bonds shall remain Outstanding.
Section 1.002. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company shall maintain in each Place of Payment for
the Bonds of any series, or any Tranche thereof, an office or agency
where such Bonds may be presented or surrendered for payment, where such
Bonds may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of such
Bonds and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency and prompt notice to the Holders of
any such change in the manner specified in Section 1.09. If at any time
the Company shall fail to maintain any such required office or agency in
respect of Bonds of any series, or any Tranche thereof, or shall fail to
furnish the Trustee with the address thereof, such presentations and
surrenders of such Bonds may be made and notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive such respective
presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or
more other offices or agencies where the Bonds of one or more series, or
any Tranche thereof, may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency
for such purposes in each Place of Payment for such Bonds in accordance
with the requirements set forth above. The Company shall give prompt
written notice to the Trustee, and prompt notice to the Holders in the
manner specified in Section 1.09, of any such designation or rescission
and of any change in the location of any such other office or agency.
(c) Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an office
of the Company, in which event the Company shall perform all functions
to be performed at such office or agency.
Section 1.003. MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.
(a) If the Company shall at any time act as its own Paying
Agent with respect to the Bonds of any series, or any Tranche thereof,
it shall, on or before each due date of the principal of and premium, if
any, or interest, if any, on any of such Bonds, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal and premium or interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein
provided and shall promptly notify the Trustee of its action or failure
so to act.
(b) Whenever the Company shall have one or more Paying
Agents for the Bonds of any series, or any Tranche thereof, it shall, on
or before each due date of the principal of and premium, if any, or
interest, if any, on such Bonds, deposit with such Paying Agents sums
sufficient (without duplication) to pay the principal and premium or
interest so becoming due, such sums to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall promptly
notify the Trustee of its action or failure so to act.
(c) The Company shall cause each Paying Agent for the Bonds
of any series, or any Tranche thereof, other than the Trustee, to
execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent shall:
(i) hold all sums held by it for the
payment of the principal of and premium, if any, or interest,
if any, on the Bonds of such series or Tranche in trust for
the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided;
(ii) give the Trustee notice of any
default by the Company (or any other obligor upon the Bonds of
such series) in the making of any payment of principal of and
premium, if any, or interest, if any, on the Bonds of such
series or Tranche; and
(iii) at any time during the continuance of
any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such
Paying Agent and furnish to the Trustee such information as it
possesses regarding the names and addresses of the Persons
entitled to such sums.
(d) The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent and, if so stated in a Company Order
delivered to the Trustee, in accordance with the provisions of Article
Nine; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect
to such money.
(e) Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the
principal of and premium, if any, or interest, if any, on any Bond and
remaining unclaimed for two years after such principal and premium, if
any, or interest, if any, has become due and payable shall be paid to
the Company on Company Request, or, if then held by the Company, shall
be discharged from such trust; and the Holder of such Bond shall
thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such
payment to the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such money
remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such mailing, any unclaimed
balance of such money then remaining will be paid to the Company.
Section 1.004. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article Thirteen
and Section 8.02(e), the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) of the Company; PROVIDED,
HOWEVER, that the Company shall not be required to preserve any such right
if, in the judgment of the Company, the preservation thereof is no longer
desirable in the conduct of the business of the Company and the loss thereof
would not adversely affect the interests of the Holders in any material
respect.
Section 1.005. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) the Mortgaged Property,
as a whole, to be maintained and kept in good condition, repair and working
order and shall cause (or, with respect to property owned in common with
others, make reasonable effort to cause) to be made such repairs, renewals,
replacements, betterments and improvements thereof, as, in the judgment of
the Company, may be necessary in order that the operation of the Mortgaged
Property, considered as a whole, may be conducted in accordance with common
industry practice; PROVIDED, HOWEVER, that nothing in this Section shall
prevent the Company from discontinuing, or causing the discontinuance of, the
operation and maintenance of any of its properties (including, without
limitation, such of its properties as are used predominantly for the
generation of electric energy) if such discontinuance is, in the judgment of
the Company, desirable in the conduct of its business.
Section 1.006. PAYMENT OF TAXES; DISCHARGE OF LIENS.
The Company shall pay all taxes and assessments and other
governmental charges lawfully levied or assessed upon the Mortgaged Property,
or upon any part thereof, or upon the interest of the Trustee in the
Mortgaged Property, before the same shall become delinquent, and will duly
observe and conform in all material respects to all valid requirements of any
Governmental Authority relative to any of the Mortgaged Property; and all
covenants, terms and conditions upon or under which any of the Mortgaged
Property is held; and the Company shall not suffer any Lien to be hereafter
created upon the Mortgaged Property, or any part thereof, prior to the Lien
hereof, other than Permitted Liens and other than, in the case of property
hereafter acquired, vendors' Liens, purchase money mortgages and any other
Lien thereon at the time of the acquisition thereof (including, but not
limited to, the Lien of the 1936 Mortgage and any other Class "A" Mortgage);
and within four months after any lawful claim or demand for labor, materials,
supplies or other objects has become delinquent which if unpaid would or
might by law be given precedence over the Lien of this Indenture as a Lien
upon any of the Mortgaged Property, the Company shall pay or cause to be
discharged or make adequate provisions to satisfy or discharge the same;
PROVIDED, HOWEVER, that nothing in this Section contained shall require the
Company to observe or conform to any requirement of Governmental Authority or
to cause to be paid or discharged, or to make provision for, any such Lien,
or to pay any such tax, assessment or governmental charge so long as the
validity thereof shall be contested in good faith and by appropriate legal
proceedings; and PROVIDED, FURTHER, that nothing in this Section contained
shall require the Company to pay, discharge or make provisions for any tax,
assessment or other governmental charge the validity of which shall not be so
contested if adequate security for the payment of such tax, assessment or
other governmental charge and for any damages which may reasonably be
anticipated from failure to pay the same shall be given to the Trustee, nor
shall anything in this Section require the Company to pay, discharge or make
provisions for any Liens existing on the Mortgaged Property at the date of
execution and delivery of this Indenture.
Section 1.007. INSURANCE.
(a) The Company will keep or cause to be kept all the
Mortgaged Property insured with reasonable deductibles and retentions
against loss by fire and other risks of casualty to the extent that
property of similar character is usually so insured by companies
similarly situated and operating like properties, by insurance companies
which the Company believes to be reputable; or the Company will, in lieu
of or supplementing such insurance in whole or in part, adopt some other
method or plan of protection or, alone or in conjunction with any other
Person or Persons, create an insurance fund to protect the Mortgaged
Property against such losses.
(b) Proceeds of any insurance or alternative method or plan
of protection of the Company against losses of the kind specified in
Section 6.07(a) shall be paid to the Company, and the Company shall be
under no obligation to use such proceeds to rebuild or repair damaged or
destroyed Mortgaged Property to the extent that the Fair Value of all of
the Mortgaged Property after the damage or destruction of Mortgaged
Property with respect to which such proceeds are payable equals or
exceeds an amount equal to twenty-fifteenths (20/15ths) of the aggregate
principal amount of Bonds Outstanding and Class "A" Bonds Outstanding
(other than Pledged Bonds), as evidenced by:
(i) an Engineer's Certificate delivered
to the Trustee stating that the Fair Value of the Mortgaged
Property remaining after such damage or destruction of
Mortgaged Property is a specified amount; and
(ii) an Officer's Certificate delivered to
the Trustee stating that the Fair Value of all of the
Mortgaged Property, as certified in the Engineer's Certificate
provided for in clause (i) of Section 6.07(b) equals or
exceeds an amount equal to twenty-fifteenths (20/15ths) of the
aggregate principal amount of Bonds Outstanding and Class "A"
Bonds Outstanding (other than Pledged Bonds).
(c) If the Company cannot deliver the Engineer's Certificate
and Officer's Certificate described in clauses (i) and (ii) of Section
6.07(b), (i) the proceeds of such insurance paid with respect to any
such loss shall be paid to the Trustee within 30 days of the receipt by
the Company of such proceeds, as the interest of the Trustee may appear,
or to the trustee of a Class "A" Mortgage, or to the trustee or other
holder of any mortgage or other Lien prior hereto upon the Mortgaged
Property so destroyed or damaged, if the terms thereof require such
proceeds so to be paid; and (ii) if the Company shall adopt such other
method or plan, it will pay or cause to be paid to the Trustee on
account of any losses of the kind specified in Section 6.07(a) sustained
because of the destruction or damage of any Mortgaged Property within 90
days of the occurrence of such destruction or damage, an amount of cash
equal to such loss less any amount otherwise paid with respect to such
loss to the Trustee, or to the trustee of a Class "A" Mortgage, or to
the trustee or other holder of any mortgage or other Lien prior hereto
upon the Mortgaged Property so destroyed or damaged, if the terms
thereof require payments for such loss so to be paid. Any amounts of
cash so required to be paid by the Company pursuant to any such method
or plan shall for the purposes of this Indenture be deemed to be
proceeds of insurance.
(d) Any moneys paid to the Trustee by the Company or
received by the Trustee as proceeds of any insurance shall be held by
the Trustee and shall, at the request of the Company, be paid by the
Trustee to the Company to reimburse the Company for an equal amount
spent for the purchase or other acquisition of property which becomes
Mortgaged Property at the time of such purchase or acquisition, or in
the rebuilding or renewal of the Mortgaged Property destroyed or
damaged, upon receipt by the Trustee of:
(i) an Officer's Certificate requesting
such reimbursement and stating that the item for which
reimbursement is being requested has not previously been
reimbursed by the trustee under any Class "A" Mortgage;
(ii) an Engineer's Certificate stating the
amounts so expended or committed for expenditure and the
nature of such rebuilding or renewal and the Fair Value to the
Company of the property purchased or acquired or rebuilt or
renewed or to be rebuilt or renewed and if:
(A) within six months prior to the
date of acquisition thereof by the Company, such
property has been used or operated, by a Person other
than the Company, in a business similar to that in which
it has been or is to be used or operated by the Company,
and
(B) the Fair Value to the Company of
such property as set forth in such Engineer's
Certificate is not less than Twenty-Five Thousand
Dollars ($25,000) and not less than one percent (1%) of
the aggregate principal amount of the Bonds at the time
Outstanding (subject to the Percentage Calculation
Proviso),
the Engineer making such certificate shall be an Independent Engineer;
and
(iii) an Opinion of Counsel stating that, in the opinion
of the signer, the property so purchased or acquired or
rebuilt or renewed or to be rebuilt or renewed is or will be
subject to the Lien hereof to the same extent as was the
property so destroyed or damaged.
(e) Any such money not so applied within eighteen (18)
months after its receipt by the Trustee, or in respect of which notice
in writing of intention to apply the same to the work of rebuilding or
renewal then in progress and uncompleted or to the purchase or other
acquisition of property shall not have been given to the Trustee by the
Company within such eighteen (18) months, or which the Company shall at
any time notify the Trustee is not to be so applied, shall thereafter be
withdrawn, used or applied in the manner, to the extent and for the
purposes, and subject to the conditions, provided in Section 8.06.
(f) Whenever under the provisions of this Section the
Company is required to deliver moneys to the Trustee and at the same
time shall have satisfied the conditions set forth herein for
reimbursement, there shall be paid to or retained by the Trustee or
reimbursed to the Company, as the case may be, only the net amount.
(g) In the event that the Company adopts a method or plan of
protection other than insurance as provided in Section 6.07(a), the
Company shall furnish to the Trustee a certificate of a qualified Person
appointed by the Company with respect to the adequacy of such method or
plan.
Section 1.008. RECORDING, FILING, ETC.
(a) The Company shall cause this Indenture and all
indentures and instruments supplemental hereto (or notices, memoranda or
financing statements or continuation statements as may be recorded or
filed to place third parties on notice thereof) to be promptly recorded
and filed and re-recorded and re-filed in such manner and in such
places, as may be required by law in order fully to preserve, protect
and perfect the security of the Holders of the Bonds and all rights of
the Trustee, and shall furnish to the Trustee:
(i) promptly after the execution and
delivery of this Indenture and of each supplemental indenture,
an Opinion of Counsel either stating that in the opinion of
such counsel this Indenture or such supplemental indenture (or
notice or memorandum thereof or financing statement in
connection therewith) has been properly recorded and filed, so
as to make effective and perfect the Lien intended to be
created hereby or thereby, and reciting the details of such
action, or stating that in the opinion of such counsel no such
action is necessary to make such Lien effective or to perfect
such Lien. The Company shall be deemed to be in compliance
with this clause (i) if (A) the Opinion of Counsel herein
required to be delivered to the Trustee shall state that this
Indenture or such supplemental indenture (or financing
statement or notice or memorandum thereof) has been received
for recording or filing in each jurisdiction in which it is
required to be recorded or filed and that, in the opinion of
counsel (if such is the case), such receipt for recording or
filing makes effective and perfects the Lien intended to be
created by this Indenture or such supplemental indenture, and
(B) such opinion is delivered to the Trustee within such time,
following the date of the execution and delivery of this
Indenture or such supplemental indenture, as shall be
practicable having due regard to the number and distance of
the jurisdictions in which this Indenture or such supplemental
indenture is required to be recorded or filed; and
(ii) on or before June 1 of each year,
beginning June 1, 1996, an Opinion of Counsel either stating
that in the opinion of the signer such action has been taken,
since the date of the most recent Opinion of Counsel furnished
pursuant to this clause (ii) or the first Opinion of Counsel
furnished pursuant to clause (i) of this subsection (a), with
respect to the recording, filing, re-recording, and re-filing
of this instrument and of each indenture supplemental to this
Indenture (or financing statement or continuation statement or
notice or memorandum thereof), as is necessary to maintain and
perfect the Lien hereof, and reciting the details of such
action (such counsel may rely on earlier Opinions of Counsel
reciting such details), or stating that in the opinion of such
counsel no such action is necessary to maintain or perfect
such Lien.
(b) The Company shall execute and deliver such supplemental
indenture or indentures and such further instruments and do such further
acts as the Trustee may reasonably request upon the advice of its
counsel or as may be necessary or proper to carry out more effectually
the purposes of this Indenture and to make subject to the Lien hereof
any property hereafter acquired, made or constructed, intended to be
subject to the Lien hereof, and to transfer to any new trustee or
trustees or co-trustee or co-trustees, the estate, powers, instruments
or funds held in trust hereunder.
Section 1.009. LIMITATION ON ADDITIONAL ISSUANCES OF BONDS
UNDER 1936 MORTGAGE.
The Company covenants and agrees that, from and after the date
of authentication and delivery of the Series A Bonds, the Company will not
issue any additional bonds under the 1936 Mortgage except for issuances of
such bonds to the Trustee as Pledged Bonds pursuant to Section 4.02 hereof.
Upon the payment in full of all indebtedness secured by the 1936 Mortgage
(other than bonds held by the Trustee) the Company will promptly take all
necessary action, including without limitation pursuant to Section 7.07, to
obtain and effect the release and cancellation of the lien of the 1936
Mortgage upon any of the Mortgaged Property and the discharge and
satisfaction of the 1936 Mortgage.
Section 0.10 WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in (a) any additional covenant or
restriction specified with respect to the Bonds of any series, or any Tranche
thereof, as contemplated by Section 3.01 if before the time for such
compliance the Holders of at least a majority in aggregate principal amount
of the Outstanding Bonds of all series and Tranches with respect to which
compliance with such additional covenant or restriction is to be omitted,
considered as one class, shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, and (b) Section 6.04, 6.05, 6.06, 6.07 or 6.09 or
Article Thirteen if before the time for such compliance the Holders of at
least a majority in aggregate principal amount of Bonds Outstanding under
this Indenture shall, by Act of such Holders, either waive such compliance in
such instance or generally waive compliance with such term, provision or
condition; but, in the case of (a) or (b), no such waiver shall extend to or
affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision
or condition shall remain in full force and effect.
Section 0.11. CERTIFICATE TO TRUSTEE.
The Company will deliver to the Trustee on or before June 1 in
each year (beginning with 1996) an Officer's Certificate (which need not
comply with Section 1.05) as to whether or not to the best knowledge of the
signer thereof the Company is in default in the performance and observance of
the terms, provisions, covenants and conditions of this Indenture (without
regard to any period of grace or requirements of notice provided hereunder)
and if the Company shall be in default, specifying all such defaults and the
nature and status thereof of which the signer may have knowledge. The
signatory to such Officer's Certificate shall be either the principal
executive officer, principal financial officer or principal accounting
officer of the Company.
ARTICLE SEVEN
PLEDGED BONDS; ADDITIONAL CLASS "A" MORTGAGES;
DISCHARGE OF CLASS "A" MORTGAGE
Section
1.001. REGISTRATION AND OWNERSHIP OF PLEDGED BONDS.
All Pledged Bonds shall be registered in the name of the
Trustee or its nominee and shall be owned and held by the Trustee, subject to
the provisions of this Indenture, for the benefit of the Holders of all Bonds
from time to time Outstanding, and the Company shall have no interest
therein. The Trustee shall be entitled to exercise all rights of bondholders
under each Class "A" Mortgage either in its discretion or as otherwise
provided in this Article or in Article Ten.
Section 1.002. PAYMENTS ON PLEDGED BONDS.
(a) Any payment by the Company of principal of or premium or
interest on any Pledged Bonds shall be applied by the Trustee to the
payment of any principal, premium or interest, as the case may be, in
respect of the Bonds which is then due, and, to the extent of such
application, the obligation of the Company hereunder to make such
payment in respect of the Bonds shall be deemed to have been satisfied
and discharged. If, at the time of any such payment of principal of
Pledged Bonds, there shall be no principal then due in respect of the
Bonds, the proceeds of such payment in respect of the Pledged Bonds
shall be deemed to constitute Funded Cash and shall be held by the
Trustee as part of the Mortgaged Property, to be withdrawn, used or
applied in the manner, to the extent and for the purposes, and subject
to the conditions, provided in Section 4.05. If, at the time of any
such payment of premium or interest on Pledged Bonds, there shall be no
premium or interest, as the case may be, then due in respect of the
Bonds, the proceeds of such payment in respect of the Pledged Bonds
shall be remitted to the Company upon receipt by the Trustee of a
Company Order requesting the same; PROVIDED, HOWEVER, that following the
occurrence and during the continuance of an Event of Default, the
Trustee shall not pay such proceeds over to the Company, but shall
instead hold such proceeds as part of the Mortgaged Property.
(b) Each supplemental indenture pursuant to which any
Pledged Bonds are issued shall contain a provision to the effect that
any payment by the Company hereunder of principal of or premium or
interest on Bonds which shall have been authenticated and delivered upon
the basis of the issuance and delivery to the Trustee of such Pledged
Bonds (other than by the application of the proceeds of a payment in
respect of such Pledged Bonds) shall, to the extent thereof, be deemed
to satisfy and discharge the obligation of the Company, if any, to make
a payment of principal, premium or interest, as the case may be, in
respect of such Pledged Bonds which is then due.
Section 1.003. SURRENDER OF PLEDGED BONDS.
At the time any Bonds of any series, or any Tranche thereof,
which shall have been authenticated and delivered upon the basis of Pledged
Bonds, cease to be Outstanding (other than as a result of the application of
the proceeds of the payment or redemption of such Pledged Bonds), the Trustee
shall surrender to or upon the order of the Company an equal principal amount
of such Pledged Bonds having the same Stated Maturity and provisions, if any,
for mandatory redemption as such Bonds.
Section 1.004. NO TRANSFER OF PLEDGED BONDS.
The Trustee shall not sell, assign or otherwise transfer any
Pledged Bonds except to a successor trustee under this Indenture. The
Company may take such actions as it shall deem necessary, desirable or
appropriate to effect compliance with such restrictions on transfer,
including the placing of a legend on each Pledged Bond and the issuance of
stop-transfer instructions to the trustee under the related Class "A"
Mortgage or any other transfer agent thereunder.
Section 1.005. VOTING OF PLEDGED BONDS AND BANK
COLLATERAL BONDS.
(a) The Trustee shall, as the holder of Pledged Bonds
Outstanding under each Class "A" Mortgage, attend such meeting or meetings of
bondholders under such Class "A" Mortgage or, at its option, deliver its
proxy in connection therewith, as relate to matters with respect to which it
is entitled to vote or consent. So long as no Event of Default hereunder
shall have occurred and be continuing, either at any such meeting or
meetings, or otherwise when the consent of the holders of the Class "A" Bonds
Outstanding under any Class "A" Mortgage is sought without a meeting, the
Trustee shall vote as holder of such Pledged Bonds, or shall consent with
respect thereto, as follows:
(i) the Trustee shall vote all Pledged Bonds Outstanding
under the 1936 Mortgage then held by it, or consent with respect
thereto, in favor of any or all amendments or modifications of the 1936
Mortgage of substantially the same tenor and effect as any or all of
those set forth in Exhibit B to this Indenture; and
(ii) with respect to any other amendments or modifications of the
1936 Mortgage and to any amendments or modifications of any other Class
"A" Mortgage:
(A) at any time when the Pledged Bonds
Outstanding constitute less than a majority in aggregate
principal amount of the Class "A" Bonds then Outstanding under
such Class "A" Mortgage, the Trustee shall vote all Pledged
Bonds Outstanding under such Class "A" Mortgage then held by
it, or consent with respect thereto, proportionately with what
the Trustee reasonably believes, which belief may be based on
an Officer's Certificate of the Company or a certificate of
the trustee under said Class "A" Mortgage (provided that in
the case of a discrepancy the certificate of such trustee
shall control), will be the vote or consent of the holders of
all other Class "A" Bonds Outstanding under such Class "A"
Mortgage the holders of which are eligible to vote or consent;
PROVIDED, HOWEVER, that the Trustee shall not so vote in favor
of, or so consent to, any amendment or modification of a Class
"A" Mortgage which, if it were an amendment or modification of
this Indenture, would require the consent of Holders, without
the prior consent, obtained in the manner prescribed in
Section 14.02, of Holders of Bonds which would be required
under said Section 14.02 for such an amendment or modification
of this Indenture; and
(B) at any time when the Pledged Bonds
Outstanding constitute at least a majority in aggregate
principal amount of the Class "A" Bonds then Outstanding under
such Class "A" Mortgage, the Trustee shall vote all Pledged
Bonds Outstanding under such Class "A" Mortgage then held by
it, or consent with respect thereto, in accordance with the
written direction of the Company evidenced by an Officer's
Certificate or, in the absence of any such direction,
proportionately with what the Trustee reasonably believes,
which belief may be based on a certificate of the trustee
under said Class "A" Mortgage, will be the vote or consent of
the holders of all other Class "A" Bonds Outstanding under
such Class "A" Mortgage the holders of which are eligible to
vote or consent; PROVIDED, HOWEVER, that the Trustee shall not
so vote in favor of, or so consent to, any amendment or
modification of a Class "A" Mortgage which, if it were an
amendment or modification of this Indenture, would require the
consent of Holders, without the prior consent, obtained in the
manner prescribed in Section 14.02, of Holders of Bonds which
would be required under said Section 14.02 for such an
amendment or modification of this Indenture.
(b) Notwithstanding anything in Section 7.05(a) to the
contrary, so long as no Event of Default hereunder shall have occurred and be
continuing, when any vote or consent of the holders of Bank Collateral Bonds
is sought, the Trustee shall vote any Bank Collateral Bonds, or shall consent
with respect thereto, in accordance with written instructions received by the
Trustee from the holder or holders of a majority in aggregate principal
amount of the Bank Collateral Bonds then Outstanding other than the Trustee.
Section 1.006. DESIGNATION OF ADDITIONAL CLASS "A" MORTGAGES.
(a) In the event that, after the date of the execution and
delivery of this Indenture, a corporation which was the mortgagor under
a mortgage or deed of trust or similar indenture is merged into or with
or consolidated with the Company, such mortgage, deed of trust or
similar indenture may be designated an additional Class "A" Mortgage
upon delivery to the Trustee of the following:
(i) a Company Order authorizing the
designation of such mortgage, deed of trust or similar
indenture as an additional Class "A" Mortgage;
(ii) an Officer's Certificate (A) stating
that no event has occurred and is continuing which entitles
the trustee under such mortgage, deed of trust or similar
indenture to accelerate the maturity of the obligations
outstanding thereunder, (B) reciting the aggregate principal
amount of obligations theretofore issued under such mortgage,
deed of trust or similar indenture and the aggregate principal
amount of obligations then outstanding thereunder, and (C)
either (x) stating that all obligations outstanding under such
mortgage, deed of trust or similar indenture that were issued
on the basis of property additions were issued in principal
amounts that did not exceed seventy-five percent (75%) of the
balance of the cost or Fair Value of such property additions
to the issuer thereof (whichever was less) after making
deductions and additions similar to those provided for in
Section 1.04 hereof, or (y) in the event that the foregoing
clause (x) is not the case, stating that the Company has
irrevocably waived its right to the authentication and
delivery of further obligations under such mortgage, deed of
trust or similar indenture in a principal amount equal to the
excess of the aggregate dollar amount of property additions
certified to the trustee under such mortgage, deed of trust or
similar indenture as the basis for all obligations outstanding
thereunder that were issued on the basis of property additions
(and outstanding obligations issued on the basis of
retirements of obligations issued on the basis of property
additions) over twenty-fifteenths (20/15ths) of the aggregate
principal amount of all such outstanding obligations; and
(iii) an Opinion of Counsel to the effect that (A) the
corporation that was the mortgagor under such mortgage, deed
of trust or similar indenture has been duly and lawfully
merged into or with or consolidated with the Company; (B) such
mortgage, deed of trust or similar indenture is qualified
under the Trust Indenture Act; (C) the Company has duly
assumed and agreed to perform and pay the obligations of the
mortgagor under such mortgage, deed of trust or similar
indenture; (D) such mortgage, deed of trust or similar
indenture constitutes a Lien upon the property described
therein prior to the Lien of this Indenture; (E) the Lien of
this Indenture constitutes a Lien on the property described in
such mortgage, deed of trust or similar indenture of the
character described in Granting Clause First, and in any
subsequent generic grant of unspecified property as
contemplated in Granting Clause Third, acquired by the Company
from such corporation by virtue of such merger or
consolidation, subject to no Lien thereon prior to the Lien of
this Indenture except the Lien of such mortgage, deed of trust
or similar indenture, Permitted Liens and Liens of the
character permitted to exist or to be hereafter created under
Section 6.06; (F) the terms of such mortgage, deed of trust or
similar indenture, as then in effect do not permit the further
issuance of obligations thereunder except on the basis of
cash, property additions of a character substantially similar
to Property Additions or the retirement of outstanding
obligations; (G) the terms of such mortgage, deed of trust or
similar indenture, as then in effect and taking into account
any waiver contemplated by clause (y) of subclause (C) of
clause (ii) above, do not permit the further issuance of
obligations thereunder upon the basis of property additions in
a principal amount exceeding seventy-five percent (75%) of the
balance of the cost or the Fair Value thereof to the issuer
thereof (whichever shall be less) after making deductions and
additions similar to those provided for in Section 1.04; and
(H) the indentures supplemental hereto and to the Class "A"
Mortgage referred to in subsection (b) of this Section comply
with the applicable requirements of clauses (i) and (ii) of
said subsection (b).
(b) At such time as the Company and the Trustee (in the case
of clause (i) below) or the trustee under the Class "A" Mortgage (in the
case of clause (ii) below) have executed, and the Company has caused to
be recorded:
(i) an indenture supplemental hereto (A)
in which such mortgage, deed of trust or similar indenture has
been designated as an additional Class "A" Mortgage, and (B)
by which the Company has specifically imposed the Lien of this
Indenture upon properties of the character described in
Granting Clause First, and in any subsequent generic grant of
unspecified property as contemplated in Granting Clause Third,
acquired by the Company from such corporation by virtue of the
merger or consolidation (and later improvements, extensions
and additions thereto and renewals and replacements thereof)
as contemplated by Section 13.05(b); and
(ii) an indenture supplemental to such
mortgage, deed of trust or similar indenture by which such
mortgage, deed of trust or similar indenture has been amended
to provide that a Matured Event of Default thereunder shall
include an Event of Default hereunder or a Matured Event of
Default under any other Class "A" Mortgage; PROVIDED, HOWEVER,
that the waiver or cure of such Event of Default or Matured
Event of Default and the rescission and annulment of the
consequences thereof shall constitute a waiver of the
corresponding Matured Event of Default under such mortgage,
deed of trust or similar indenture and a rescission and
annulment of the consequences thereof;
then such mortgage, deed of trust or similar indenture and all
obligations issued and outstanding thereunder shall for all purposes
hereof be treated as a Class "A" Mortgage and as Class "A" Bonds,
respectively, to the full and same extent as if specifically identified
in Article One.
Section
1.001. DISCHARGE OF CLASS "A" MORTGAGE.
(a) The Trustee shall surrender for cancellation to the
trustee under any Class "A" Mortgage all Pledged Bonds then held by the
Trustee issued under such Class "A" Mortgage upon receipt by the Trustee
of:
(i) a Company Order requesting such
surrender for cancellation of such Pledged Bonds;
(ii) an Officer's Certificate to the
effect that no Class "A" Bonds are Outstanding under such
Class "A" Mortgage other than Pledged Bonds and that promptly
upon such surrender such Class "A" Mortgage will be satisfied
and discharged pursuant to the terms thereof;
(iii) an Engineer's Certificate:
(A) describing in reasonable detail
all property constituting Property Additions designated
by the Company, in its discretion, to be deemed, on and
after the date of such surrender for cancellation and
for all purposes of this Indenture, to have been made
the basis of the authentication and delivery of all
Bonds then Outstanding which shall have been
authenticated and delivered under Section 4.02 on the
basis of Pledged Bonds authenticated and delivered under
such Class "A" Mortgage, such Property Additions to
have, in the aggregate, a Cost (or as to Property
Additions of which the Fair Value to the Company
specified pursuant to subclause (H) or clause (iv) below
is less than the Cost thereof, then such Fair Value in
lieu of Cost) not less than twenty-fifteenths (20/15ths)
of the aggregate principal amount of such Bonds;
(B) stating that all such property
constitutes Property Additions;
(C) stating that such Property
Additions are desirable for use in the proper conduct of
the business of the Company;
(D) stating that such Property
Additions, to the extent of the Cost (or as to Property
Additions of which the Fair Value to the Company
specified pursuant to subclause (H) or clause (iv) below
is less than the Cost thereof, then such Fair Value in
lieu of Cost) to the Company to be deemed to have been
made the basis of the authentication and delivery of
such Bonds, will no longer constitute Bonded Property
Additions (other than pursuant to clause (vii) of the
definition of "Bonded") upon the discharge of the Class
"A" Mortgage pursuant to which such Pledged Bonds were
issued;
(E) stating, except as to Property
Additions acquired, made or constructed wholly through
the delivery of securities or other property, that the
amount of cash forming all or part of the Cost thereof
was equal to or more than an amount to be stated
therein;
(F) briefly describing, with respect
to any Property Additions acquired, made or constructed
in whole or in part through the delivery of securities
or other property, the securities or other property so
delivered and stating the date of such delivery;
(G) stating what part, if any, of such
Property Additions included property which within six
months prior to the date of acquisition thereof by the
Company had been used or operated by others than the
Company in a business similar to that in which it has
been or is to be used or operated by the Company and
stating whether or not, in the judgment of the signers,
the Fair Value thereof to the Company, as of the date of
such certificate, is less than Twenty-Five Thousand
Dollars ($25,000) and whether or not the fair value
thereof to the Company, as of such date, is less than
one percent (1%) of the aggregate principal amount of
Bonds then Outstanding (subject to the Percentage
Calculation Proviso);
(H) stating, in the judgment of the
signers, the Fair Value to the Company, as of the date
of such certificate, of such Property Additions, except
any thereof with respect to the Fair Value to the
Company of which a statement is to be made in an
Independent Engineer's Certificate as provided for in
clause (iv) below; PROVIDED, HOWEVER, that if any such
Property Additions shall have theretofore been certified
to the trustee under such Class "A" Mortgage as the
basis for the authentication and delivery of Class "A"
Bonds:
(1) which are Pledged Bonds as of the
date of such certificate; or
(2) the retirement of which shall have
theretofore been made the basis
(whether directly or indirectly when
considered in light of the issuance
and retirement of successive issues
of Class "A" Bonds) of the
authentication and delivery of
Pledged Bonds then held by the
Trustee;
then there may be stated, in lieu of the Fair Value of
such Property Additions as of the date of such
certificate, the Fair Value thereof as so certified to
the trustee under such Class "A" Mortgage; and
(I) stating that the Liens, if any, of
the character described in clause (e) of the definition
of "Permitted Liens" to which any property included in
such Property Additions is subject do not, in the
judgment of the signers, materially impair the use of
such property for the purposes for which the same is
held by the Company;
(iv) in case any Property Additions are
shown by the Engineer's Certificate provided for in clause
(iii) above to include property which, within six months prior
to the date of acquisition thereof by the Company, had been
used or operated by others than the Company in a business
similar to that in which it has been or is to be used or
operated by the Company and such certificate does not show the
Fair Value thereof to the Company, as of the date of such
certificate, to be less than Twenty-Five Thousand Dollars
($25,000) or less than one percent (1%) of the aggregate
principal amount of Bonds then Outstanding (subject to the
Percentage Calculation Proviso), an Independent Engineer's
Certificate stating, in the judgment of the signer, the Fair
Value to the Company, as of the date of such Independent
Engineer's Certificate, of (A) such Property Additions which
have been so used or operated and (at the option of the
Company) as to any other Property Additions included in the
Engineer's Certificate provided for in clause (iii) above, and
(B) any property so used or operated which has been subjected
to the Lien of this Indenture since the commencement of the
then current calendar year as the basis for the authentication
and delivery of Bonds and as to which an Independent
Engineer's Certificate has not previously been furnished to
the Trustee;
(v) in case any Property Additions are shown by the
Engineer's Certificate provided for in clause (iii) above to
have been acquired, made or constructed in whole or in part
through the delivery of securities or other property, a
written appraisal of an Engineer stating, in the judgment of
the Engineer, the Fair Value in cash of such securities or
other property at the time of delivery thereof in payment for
or for the acquisition of such Property Additions;
(vi) an Opinion of Counsel to the effect:
(A) that (except as to paving, grading
and other improvements to, under or upon highways,
bridges, parks or other public property of analogous
character) this Indenture is, or upon (x) the delivery
of, or the filing or recording in the proper places and
manner of, the instruments of conveyance, assignment or
transfer, if any, specified in said opinion, or (y) the
satisfaction and discharge of the Class "A" Mortgage to
be satisfied and discharged pursuant to this Section,
will be, a Lien on all the Property Additions to be
deemed to have been made the basis of the authentication
and delivery of Bonds then Outstanding which shall have
been authenticated and delivered under Section 4.02 on
the basis of Pledged Bonds authenticated and delivered
under such Class "A" Mortgage, subject to no Lien
thereon prior to the Lien of this Indenture except
Permitted Liens; and
(B) that the Company has corporate
authority to operate the Property Additions with respect
to which such application is made;
(vii) an Opinion of Counsel to the effect
that upon satisfaction and discharge of such Class "A"
Mortgage the Lien of this Indenture on the property formerly
subject to the Lien of such Class "A" Mortgage, to the extent
the same is part of the Mortgaged Property, will be subject to
no Lien prior to the Lien of this Indenture except Permitted
Liens and Liens of the character permitted to exist or to be
hereafter created under Section 6.06; and
(viii) copies of the instruments of
conveyance, assignment and transfer, if any, specified in the
Opinion of Counsel provided for in clause (vi) above.
(b) The amount of the Cost of any Property Additions and the
Fair Value thereof to the Company and the fair market value in cash of
any securities or other property so delivered in payment therefor or for
the acquisition thereof shall be determined for the purposes of this
Section by the appropriate certificate provided for in this Section.
ARTICLE
EIGHT
POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY
Section
1.001. QUIET ENJOYMENT.
Unless one or more Events of Default shall have occurred and
be continuing, the Company shall be permitted to possess, use and enjoy the
Mortgaged Property (except such cash as is expressly required to be deposited
with the Trustee and except, to the extent not otherwise provided herein,
such securities as are expressly required to be deposited with the Trustee).
Section 1.002. DISPOSITIONS WITHOUT RELEASE.
Unless an Event of Default shall have occurred and be
continuing, the Company may at any time and from time to time, without any
release or consent by, or report to, the Trustee:
(a) sell or otherwise dispose of, free from the Lien of this
Indenture, or abandon or otherwise retire, any machinery, apparatus,
equipment, frames, towers, poles, wire, pipe, cable, conduit, mains
tubes, drains, valves, tools, or implements, or any other fixture or
personalty, then subject to the Lien hereof, which shall have become
old, inadequate, obsolete, worn out, unfit, unadapted, unserviceable,
undesirable or unnecessary for use in one or more of the Primary
Purposes of the Company's Business;
(b) cancel or make changes in or alterations of or
substitutions for any and all leases;
(c) alter, change the location of, add to, repair and
replace any and all transmission and distribution lines, pipes,
substations, machinery, fixtures and other equipment;
(d) cancel, make changes in or substitutions for or dispose
of any and all rights of way (including easements and licenses);
(e) surrender or assent to the modification of any franchise
(including in that term, without limitation, any ordinances, permits,
licenses or other operating rights, however denominated, granted by
federal, state, municipal or other governmental authority) under which
the Company or any of its property may be operating if, in the judgment
of the Company, it is advisable to do so;
(f) abandon, or permit the abandonment of, the operation of
any Mortgaged Property, if, in the judgment of the Company, the
operation of such Mortgaged Property is not, under the circumstances,
necessary or important for the operation of the remaining Mortgaged
Property, or whenever the Company deems such abandonment to be advisable
for any reason; PROVIDED HOWEVER, that if the amount at which such
Mortgaged Property and all other Mortgaged Property so abandoned during
the same calendar year was originally charged to the fixed property
accounts of the Company is equal to ten percent (10%) or more of the
aggregate principal amount of Bonds Outstanding (subject to the
Percentage Calculation Proviso) immediately prior to such abandonment,
there shall be furnished to the Trustee an Independent Engineer's
Certificate to the effect that such Mortgaged Property is not, under the
circumstances, necessary or important for the operation of the remaining
property of the Company or that such abandonment is advisable for some
other specified reason, and that such abandonment will not impair the
security under this Indenture in contravention of the provisions hereof;
and
(g) grant, free from the Lien of this Indenture, easements,
ground leases or rights of way in, upon, over or across the property or
rights of way of the Company for the purpose of roads, pipelines,
transmission lines, distribution lines, communication lines, railways,
removal of coal or other minerals or timber, and other like purposes, or
for the joint or common use of real property, rights of way, facilities
or equipment; PROVIDED, HOWEVER, that such grant shall not materially
impair the use of the property or rights of way for the purposes for
which such property or rights of way are held by the Company.
Section 1.003. RELEASE OF MORTGAGED PROPERTY IF BONDING RATIO
TEST SATISFIED.
Unless an Event of Default shall have occurred and be
continuing, upon receipt of a Company Order requesting the release of
Mortgaged Property pursuant to this Section 8.03, the Trustee shall execute
and deliver to the Company the documents and instruments described in Section
8.03(a), releasing from the Lien of this Indenture such Mortgaged Property if
the Fair Value of all of the Mortgaged Property (excluding the Mortgaged
Property to be released but including any Property Additions to be acquired
by the Company with the proceeds of, or otherwise in connection with, such
release) stated on the Engineer's Certificates delivered pursuant to Section
8.03(b) and Section 8.03(c), equals or exceeds an amount equal to twenty-
fifteenths (20/15ths) of the aggregate principal amount of Bonds Outstanding
at the date of such Company Order as stated on the Officer's Certificate
delivered pursuant to Section 8.03(d), upon receipt by the Trustee of:
(a) appropriate documents and instruments releasing without
recourse the interest of the Trustee in the Mortgaged Property to be
released, and describing in reasonable detail the Mortgaged Property to
be released;
(b) an Engineer's Certificate, dated the date of such
Company Order, stating (i) that the signers of such Engineer's
Certificate have examined the Officer's Certificate delivered pursuant
to Section 8.03(d) in connection with such release, (ii) the Fair Value,
in the opinion of the signers of such Engineer's Certificate, of (A) all
of the Mortgaged Property, and (B) the Mortgaged Property to be
released, in each case as of a date not more than 90 days prior to the
date of such Company Order, and (iii) that in the judgment of such
signers, such release (A) will not materially adversely affect the
Primary Purposes of
the Company's Business, and (B) will not impair the security under this
Indenture in contravention of the provisions hereof;
(c) in case any Property Additions are being acquired by the
Company with the proceeds of, or otherwise in connection with, such
release, (i) an Engineer's Certificate, dated the date of such Company
Order, as to the Fair Value, as of a date not more than 90 days prior to
the date of such Company Order, of the Property Additions being so
acquired (and if within six months prior to the date of acquisition by
the Company of the Property Additions being so acquired, any property
included within such Property Additions had been used or operated by
others than the Company in a business similar to that in which it has
been or is to be used or operated by the Company, and the Fair Value
thereof to the Company, as set forth in such Engineer's Certificate, is
not less than Twenty-Five Thousand Dollars ($25,000) and not less than
one percent (1%) of the aggregate principal amount of Bonds then
Outstanding (subject to the Percentage Calculation Proviso), such
certificate shall be an Independent Engineer's Certificate), and (ii) an
Opinion of Counsel to the effect of Section 4.03(b)(v); and
(d) an Officer's Certificate, dated the date of such Company
Order, (i) setting forth the aggregate principal amount of Outstanding
Bonds at the date of such Company Order, and stating that the Fair Value
of all of the Mortgaged Property (excluding the Mortgaged Property to be
released but including any Property Additions to be acquired by the
Company with the proceeds of, or otherwise in connection with, such
release) stated on the Engineer's Certificates filed pursuant to
Sections 8.03(b) and (if applicable) 8.03(c) equals or exceeds an amount
equal to twenty-fifteenths (20/15ths) of such aggregate principal
amount, and (ii) that, to the knowledge of the signer, no Event of
Default has occurred and is continuing.
Section 1.004. RELEASE OF LIMITED AMOUNT OF MORTGAGED
PROPERTY.
If the Company is unable, or elects not, to obtain, in
accordance with Section 8.03, the release from the Lien of this Indenture of
Mortgaged Property, unless an Event of Default shall have occurred and be
continuing, upon receipt of a Company Order requesting the release of
Mortgaged Property pursuant to this Section 8.04, the Trustee shall execute
and deliver to the Company the documents and instruments described in Section
8.04(a) releasing from the Lien of this Indenture such Mortgaged Property if
the Fair Value thereof, as stated on the Engineer's Certificate delivered
pursuant to Section 8.04(b), is less than one percent (1%) of the sum of (i)
the principal amount of Bonds Outstanding and (ii) the principal amount of
the Class "A" Bonds Outstanding other than Pledged Bonds at the date of such
Company Order, provided that the aggregate Fair Value of all Mortgaged
Property released pursuant to this Section 8.04, as stated on all Engineer's
Certificates filed pursuant to this Section 8.04(b) in any period of 12
consecutive calendar months which includes the date of such Engineer's
Certificate, shall not exceed three percent (3%) of the aggregate principal
amount of Bonds Outstanding and Class "A" Bonds Outstanding (other than
Pledged Bonds) at the date of such Company Order as stated on the Officer's
Certificate delivered pursuant to Section 8.04(c), upon receipt by the
Trustee of:
(a) appropriate documents and instruments releasing without
recourse the interest of the Trustee in the Mortgaged Property to be
released, and describing in reasonable detail the Mortgaged Property to
be released;
(b) an Engineer's Certificate, dated the date of such
Company Order, stating (i) that the signers of such Engineer's
Certificate have examined the Officer's Certificate delivered pursuant
to Section 8.04(c) in connection with such release, (ii) the Fair Value,
in the opinion of the signers of such Engineer's Certificate, of such
Mortgaged Property to be released as of a date not more than 90 days
prior to the date of such Company Order, and (iii) that in the judgment
of such signers, such release will not impair the security under this
Indenture in contravention of the provisions hereof;
(c) an Officer's Certificate, dated the date of such Company
Order, (i) setting forth the sum of (x) the principal amount of Bonds
Outstanding and (y) the principal amount of the Class "A" Bonds
Outstanding other than Pledged Bonds at the date of such Company Order,
(ii) stating that one percent (1%) of such aggregate principal amount
exceeds the Fair Value of the Mortgaged Property for which such release
is applied for, (iii) stating that three percent (3%) of such aggregate
principal amount equals or exceeds the aggregate Fair Value of all
Mortgaged Property released from the Lien of this Indenture pursuant to
this Section 8.04, as shown by all Engineer's Certificates filed
pursuant to Section 8.04(b) in such period of 12 consecutive calendar
months, and (iv) stating that, to the knowledge of the signer, no Event
of Default has occurred and is continuing.
Section 1.005. RELEASE OF MORTGAGED PROPERTY NOT SUBJECT TO A
CLASS "A" MORTGAGE.
(a) If the Company is unable, or elects not, to obtain, in
accordance with Section 8.03, the release from the Lien of this
Indenture of Mortgaged Property which is not subject to a Class "A"
Mortgage, unless an Event of Default shall have occurred and be
continuing and on the basis of cash, Government Obligations, purchase
money obligations, Property Additions acquired by the Company with the
proceeds of, or otherwise in connection with, such release, or the
waiver of the right to the authentication and delivery of Bonds as
described in subclause (B) of clause (iii) of this Section 8.05(a), or a
combination thereof, upon receipt of a Company Order requesting the
release of Mortgaged Property pursuant to this Section 8.05, the Trustee
shall execute and deliver to the Company the documents and instruments
described in Section 8.05(a)(i) releasing such Mortgaged Property from
the Lien of this Indenture, upon receipt by the Trustee of:
(i) appropriate documents and instruments
releasing without recourse the interest of the Trustee in the
Mortgaged Property to be released, describing in reasonable
detail the Mortgaged Property to be released and stating the
amount and character of the proceeds to be received by the
Company therefor;
(ii) an Engineer's Certificate, dated the
date of such Company Order, stating (A) the Fair Value, in the
opinion of the signers of such Engineer's Certificate, of the
Mortgaged Property to be released as of a date not more than
90 days prior to the date of such Company Order, (B) the fair
market value in cash, in the opinion of such signers (which
opinion may be based on an Appraiser's Certificate dated
within 90 days of the date of such Company Order), of any
Government Obligations and purchase money obligations included
in the consideration for such release, and (C) that in the
judgment of such signers, such release will not impair the
security under this Indenture in contravention of the
provisions hereof;
(iii) (A) an aggregate amount of Government
Obligations and purchase money obligations having a fair
market value in cash as evidenced by such Appraiser's
Certificate, cash and evidence of the acquisition by the
Company of Property Additions with the proceeds of, or
otherwise in connection with, such release (the amount of such
Property Additions shall be the Fair Value thereof as of a
date not more than 90 days prior to the date of such Company
Order, as evidenced to the Trustee by an Engineer's
Certificate dated the date of such Company Order, and if
within six months prior to the date of acquisition by the
Company of the Property Additions being so acquired, any
property included within such Property Additions had been used
or operated by others than the Company in a business similar
to that in which it has been or is to be used or operated by
the Company, and the Fair Value thereof to the Company, as set
forth in such Engineer's Certificate, is not less than Twenty-
Five Thousand Dollars ($25,000) and not less than one percent
(1%) of the aggregate principal amount of Bonds then
Outstanding (subject to the Percentage Calculation Proviso),
such certificate shall be an Independent Engineer's
Certificate), not less than the Fair Value of the Mortgaged
Property to be released, or (B) an Officer's Certificate,
dated the date of such Company Order, waiving the right of the
Company to the authentication and delivery of an aggregate
principal amount of Bonds up to the amount required by
subclause (A) of clause (iii) of this Section 8.05(a), on the
basis of Retired Bonds under Section 4.04, and stating the
matters required to be stated in the Officer's Certificates
provided for in clause (vi) of Section 4.01(a) and
Section 4.04 (except that the Company shall not in any event
be required to deliver a Net Earnings Certificate), in either
case appropriately modified to reflect that the action being
taken is the waiver of the right to, rather than a request
for, the authentication and delivery of Bonds, or (C), a
combination of the items specified subclauses (A) and (B) of
clause (iii) of this Section 8.05(a);
(iv) in case any obligations secured by
purchase money mortgage upon the Mortgaged Property to be
released are included in the consideration for such release
and are delivered to the Trustee in connection with such
release, an Opinion of Counsel, dated the date of the Company
Order, stating that, in the opinion of the signer, such
obligations are valid obligations enforceable in accordance
with their terms, subject to the Customary Exceptions, and
that the purchase money mortgage securing the same is
sufficient to afford a valid purchase money Lien upon the
property to be released subject to no Lien prior thereto
except Permitted Liens and such Liens, if any, as shall have
existed thereon just prior to such release as Liens prior to
the Lien of this Indenture; and
(v) an Officer's Certificate, dated the
date of such Company Order, stating that, to the knowledge of
the signer, no Event of Default has occurred and is
continuing.
In connection with any use of Property Additions permitted by
subclause (iii) of this subsection, the Trustee shall also be entitled
to receive an Opinion of Counsel to the effect of Section 4.03(b)(v).
(b) Any purchase money obligations received or to be received
by the Trustee under this Indenture in consideration for the release of
any Mortgaged Property from the Lien of this Indenture by the Trustee,
and the purchase money mortgage securing such purchase money
obligations, shall upon Company Order be released by the Trustee from
the Lien of this Indenture and delivered or assigned to the Company, or
as it shall request, upon payment by the Company to the Trustee of the
unpaid principal of such purchase money mortgage and/or of the
obligations thereby secured; the principal of any such purchase money
obligations not so released shall be paid to or collected by the Trustee
as and when such principal shall become payable, and the Company shall
take any action which in its judgment may be desirable or which shall be
necessary to preserve the security of such purchase money mortgage.
(c) Any cash deposited with the Trustee under this Section
8.05 may thereafter be withdrawn, used or applied in the manner, to the
extent and for the purposes, and subject to the conditions, provided in
Section 8.06.
Section 1.006. WITHDRAWAL OR OTHER APPLICATION OF FUNDED
CASH.
(a) Subject to the provisions of Section 4.05 and Section
7.02(a) and except as hereafter in this Section provided, unless an
Event of Default shall have occurred and be continuing, any Funded Cash
held by the Trustee, and any other cash which is required to be
withdrawn, used or applied as provided in this Section:
(i) may be withdrawn from time to time by
the Company to the extent of the Cost or the Fair Value to the
Company (whichever is less) of Unbonded Property Additions,
after making any deductions and additions pursuant to Section
1.04, described in an Engineer's Certificate, dated not more
than ninety (90) days prior to the date of the Company Order
requesting such withdrawal and complying with clause (ii) of
Section 4.03(b), delivered to the Trustee; PROVIDED, HOWEVER,
that the deductions and additions contemplated by Section 1.04
shall not be required to be made if such Property Additions
were acquired, made or constructed on or after the ninetieth
(90th) day preceding the date of such Company Order;
(ii) may be withdrawn from time to time by
the Company (A) in the case of cash deposited with the Trustee
under Section 4.05, to the extent of the amount thereof, and
(B) in the case of all other Funded Cash and any other cash,
in an amount equal to twenty-fifteenths (20/15ths) of the
aggregate principal amount of Bonds the authentication and
delivery of which the Company shall be entitled under the
provisions of Section 4.04, by virtue of compliance with all
applicable provisions of Section 4.04 (except as hereinafter
in this Section otherwise provided); PROVIDED, HOWEVER, that
such withdrawal of cash shall operate as a waiver by the
Company of the right to the authentication and delivery of
such Bonds and, to such extent no such Bonds may thereafter be
authenticated and delivered hereunder; and any such Bonds
which were the basis of such right to the authentication and
delivery of Bonds so waived shall be deemed to have been made
the basis of such withdrawal of cash;
(iii) may be withdrawn from time to time by
the Company in an amount equal to twenty-fifteenths (20/15ths)
of the aggregate principal amount of any Outstanding Bonds
delivered to the Trustee;
(iv) may, upon the request to the Company,
be used by the Trustee for the purchase of Bonds in the
manner, at the time or times, in the amount or amounts, at the
price or prices (not exceeding twenty-fifteenths (20/15ths) of
the principal amount thereof) and otherwise as directed or
approved by the Company; or
(v) may, upon the request of the Company,
be applied by the Trustee to the payment at Stated Maturity of
any Bonds or to the redemption of any Bonds which are, by the
terms, redeemable, in each case of such series as may be
designated by the Company, any such redemption to be in the
manner and as provided in Article Five.
(b) Such moneys shall, from time to time, be paid or used or
applied by the Trustee, as aforesaid, upon the request of the Company in
a Company Order, and upon receipt by the Trustee of an Officer's
Certificate stating that no Event of Default has occurred and is
continuing. If and to the extent that the withdrawal of cash is based
upon Unbonded Property Additions (as permitted under the provisions of
clause (i) of Section 8.06(a)), the Company shall, subject to the
provisions of said clause (i) and except as hereafter in this subsection
(b) provided, comply with all applicable provisions of this Indenture as
if such Property Additions were made the basis for the authentication
and delivery of Bonds equal in principal amount to seventy-five percent
(75%) of the cash so to be withdrawn. If and to the extent that the
withdrawal of cash is based upon the right to the authentication and
delivery of Bonds (as permitted under the provisions of clause (ii) of
Section 8.06(a)), the Company shall, except as hereafter in this
subsection (b) provided, comply with all applicable provisions of
Section 4.04 relating to such authentication and delivery.
Notwithstanding the foregoing provisions of this subsection (b), in no
event shall the Company be required to comply with Section 4.01 or to
deliver a Net Earnings Certificate.
(c) The principal of and interest on any obligations secured
by a purchase money mortgage held by the Trustee shall be collected by
the Trustee as and when the same become payable. Unless an Event of
Default shall have occurred and be continuing, the interest received by
the Trustee on any such obligations shall be remitted to the Company,
and any payments received by the Trustee on account of the principal of
any such obligations in excess of the amount of credit used by the
Company in respect of such obligations upon the release of any property
from the Lien hereof shall be deemed not to constitute Funded Cash and
shall also be remitted to the Company.
(d) The Trustee shall have and may exercise all the rights
and powers of any owner of such obligations and of all substitutions
therefor and, without limiting the generality of the foregoing, may
collect and receive all insurance moneys payable to it under any of the
provisions thereof and apply the same in accordance with the provisions
thereof, may consent to extensions thereof at a higher or lower rate of
interest, may join in any plan or plans of voluntary or involuntary
reorganization or readjustment or rearrangement and may accept and hold
hereunder new obligations, stocks or other securities issued in exchange
therefor under any such plan. Any discretionary action which the
Trustee may be entitled to take in connection with any such obligations
or substitutions therefor shall be taken, so long as no Event of Default
shall exist, in accordance with a Company Order, and, during the
existence of an Event of Default, in its own discretion.
(e) Any Bonds received by the Trustee pursuant to the
provisions of this Section shall forthwith be canceled by the Trustee.
Section 1.007. RELEASE OF PROPERTY TAKEN BY EMINENT DOMAIN,
ETC.
Should any of the Mortgaged Property, or any interest therein,
be taken by exercise of the power of eminent domain or be sold to an entity
possessing the power of eminent domain under a threat to exercise the same,
and should the Company not elect to obtain the release of such property
pursuant to other provisions of this Article Eight, the Trustee shall, upon
request of the Company evidenced by a Company Order, release from the Lien
hereof all its right, title and interest in and to the property so taken or
sold (or with respect to an interest in property, subordinate the Lien hereof
to such interest), upon receiving (a) an Opinion of Counsel to the effect
that such property has been taken by exercise of the power of eminent domain
or has been sold to an entity possessing the power of eminent domain under
threat of an exercise of such power, an Officer's Certificate stating the
amount of net proceeds received or to be received for such property so taken
or sold under threat of exercise of such power, and the amount so stated
shall be deemed to be the Fair Value of such property, and (c) a deposit by
the Company of an amount in cash equal to the Cost of the Mortgaged Property
so taken or sold (or, if the Fair Value to the Company of such property at
the time the same became Mortgaged Property was less than the Cost thereof as
certified to the Trustee in an Officer's Certificate, then such Fair Value in
lieu of Cost); PROVIDED, HOWEVER, that no such deposit shall be required to
be made hereunder if the proceeds of such taking or sale shall, as indicated
in an Officer's Certificate delivered to the Trustee, have been deposited
with the trustee or other holder of a Class "A" Mortgage or other Lien prior
to the Lien of this Indenture. Any cash deposited with the Trustee under
this Section may thereafter be withdrawn, used or applied in the manner, to
the extent and for the purposes, and subject to the conditions, provided in
Section 8.06.
Section 1.008. ALTERNATIVE RELEASE PROVISION.
In lieu of the other provisions for the release of the
Mortgaged Property provided in this Indenture, unless an Event of Default
shall have occurred and be continuing, the Company may in the alternative
obtain the release of any part of the Mortgaged Property which is subject to
the Lien of a Class "A" Mortgage (except cash or obligations secured by a
purchase money mortgage) by delivery to the Trustee of an Officer's
Certificate as to the non-existence of an Event of Default referred to above,
an Engineer's Certificate as to the Fair Value of the property to be released
and a copy of a release of such part of the Mortgaged Property from the Lien
of such Class "A" Mortgage executed by the trustee thereunder; PROVIDED,
HOWEVER, that this Section shall not apply with respect to any release of
Mortgaged Property from the Lien of any Class "A" Mortgage in connection with
the discharge of such Class "A" Mortgage.
Section 1.009. DISCLAIMER OR QUITCLAIM.
In case the Company has sold, exchanged, dedicated or
otherwise disposed of, or has agreed or intends to sell, exchange, dedicate
or otherwise dispose of, or a Governmental Authority has lawfully ordered the
Company to divest itself of, any property of a character excepted from the
Lien hereof, or the Company desires to disclaim or quitclaim title to
property to which the Company does not purport to have title, the Trustee
shall, from time to time, execute such instruments of disclaimer or quitclaim
as may be appropriate upon receipt by the Trustee of the following:
(a) an Officer's Certificate describing in reasonable detail
the property to be disclaimed or quitclaimed and having attached thereto
such instruments of disclaimer or quitclaim to be executed by the
Trustee; and
(b) an Opinion of Counsel stating the signer's opinion that
such property is not subject to the Lien hereof or required to be
subject thereto by any of the provisions hereof and that the execution
of such disclaimer or quitclaim is appropriate.
Section 8.10. MISCELLANEOUS.
(a) If the Mortgaged Property shall be in the possession of
a receiver or trustee, lawfully appointed, the powers hereinbefore
conferred upon the Company with respect to the release of any part of
the Mortgaged Property or any interest therein or the withdrawal of cash
may be exercised, with the approval of the Trustee, by such receiver or
trustee, notwithstanding that an Event of Default may have occurred and
be continuing, and any request, certificate, appointment or approval
made or signed by such receiver or trustee for such purposes shall be as
effective as if made by the Company or any of its officers or appointees
in the manner herein provided; and if the Trustee shall be in possession
of the Mortgaged Property under any provision of this Indenture, then
such powers may be exercised by the Trustee in its discretion
notwithstanding that an Event of Default may have occurred and be
continuing.
(b) If any property released from the Lien of this Indenture
as provided in Section 8.03, 8.04 or 8.05 shall continue to be owned by
the Company after such release, this Indenture shall not become or be,
or be required to become or be, a Lien upon such property or any
improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such
property unless the Company shall execute and deliver to the Trustee an
indenture supplemental hereto, in recordable form, containing a grant,
conveyance, transfer and mortgage thereof to the Trustee.
(c) Notwithstanding the occurrence and continuance of an
Event of Default, the Trustee, in its discretion, may release from the
Lien hereof any part of the Mortgaged Property or permit the withdrawal
of cash, upon compliance with the other conditions specified in this
Article in respect thereof.
(d) No purchaser in good faith of property purporting to
have been released hereunder shall be bound to ascertain the authority
of the Trustee to execute the release, or to inquire as to any facts
required by the provisions hereof for the exercise of this authority;
nor shall any purchaser or grantee of any property or rights permitted
by this Article to be sold, granted, exchanged, dedicated or otherwise
disposed of, be under obligation to ascertain or inquire into the
authority of the Company to make any such sale, grant, exchange,
dedication or other disposition.
ARTICLE NINE
SATISFACTION AND DISCHARGE
Section
1.001. SATISFACTION AND DISCHARGE OF BONDS.
(a) Any Bond or Bonds, or any portion of the principal
amount thereof, shall be deemed to have been paid for all purposes of
this Indenture, and the entire indebtedness of the Company in respect
thereof shall be deemed to have been satisfied and discharged, if there
shall have been irrevocably deposited with the Trustee, in trust:
(i) money (including Funded Cash not
otherwise applied pursuant to Section 8.06) in an amount which
shall be sufficient, or
(ii) in the case of a deposit made prior
to the Maturity of such Bonds or portions thereof, Eligible
Obligations, which shall not contain provisions permitting the
redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which
when due, without any regard to reinvestment thereof, will
provide moneys which shall be sufficient, or
(iii) a combination of (i) or (ii) which
shall be sufficient,
to pay when due the principal of and premium, if any, and interest, if
any, due and to become due on such Bonds or portions thereof; PROVIDED,
HOWEVER, that in the case of the provision for payment or redemption of
less than all the Bonds of any series or Tranche, such Bonds or portions
thereof shall have been selected by the Bond Registrar as provided
herein and, in the case of a redemption, the notice requisite to the
validity of such redemption shall have been given or irrevocable
authority shall have been given by the Company to the Trustee to give
such notice, under arrangements satisfactory to the Trustee; and
PROVIDED, FURTHER, that the Company shall have delivered to the Trustee:
(x) if such deposit shall have been made
prior to the Maturity of such Bonds, a Company Order stating
that the money and Eligible Obligations deposited with the
Trustee in accordance with this Section shall be held by the
Trustee, in trust, as provided in Section 9.03; and
(y) if Eligible Obligations shall have
been deposited with the Trustee, an Opinion of Counsel that
the obligations so deposited with the Trustee constitute
Eligible Obligations and do not contain provisions permitting
the redemption or other prepayment at the option of the issuer
thereof, and an opinion of an Independent public accountant of
nationally recognized standing, selected by the Company, to
the effect that the other requirements set forth in clause
(ii) above have been satisfied.
(b) Upon receipt by the Trustee of money or Eligible
Obligations, or both, in accordance with this Section, together with the
documents required by clauses (x) and (y) of Section 9.01(a), (i) the
Holders of the Bonds or portions thereof in respect of which such
deposit was made shall no longer be entitled to the benefit of the
covenants of the Company under Article Six (except the covenants
contained in Sections 6.02 and 6.03), and (ii) the Trustee shall, upon
receipt of a Company Request, acknowledge in writing that such Bonds or
portions thereof are deemed to have been paid for all purposes of this
Indenture and that the entire indebtedness of the Company in respect
thereof is deemed to have been satisfied and discharged.
(c) If payment at Stated Maturity of less than all of the
Bonds of any series, or any Tranche thereof, is to be provided for in
the manner and with the effect provided in this Section, the Bond
Registrar shall select such Bonds, or portions of principal amount
thereof in the manner specified by Section 5.03 for selection for
redemption of less than all the Bonds of a series or Tranche, unless a
different manner is specified as contemplated by Section 3.01 for Bonds
of such series or Tranche.
(d) In the event that Bonds which shall be deemed to have
been paid as provided in this Section do not mature and are not to be
redeemed within the sixty (60) day period commencing with the date of
the deposit with the Trustee of moneys or Eligible Obligations as
aforesaid, the Company shall, as promptly as practicable, give a notice,
in the same manner as a notice of redemption with respect to such Bonds,
to the Holders of such Bonds to the effect that such deposit has been
made and the effect thereof.
(e) Notwithstanding the satisfaction and discharge of any
Bonds as aforesaid, the obligations of the Company and the Trustee in
respect of such Bonds under Sections 3.04, 3.05, 3.06, 5.04, 6.02, 6.03,
11.07 and 11.15, Article Seven and this Article Nine shall survive.
(f) The Company shall pay, and shall indemnify the Trustee
and each Holder of Bonds which are deemed to have been paid as provided
in this Section against, any tax, fee or other charge imposed on or
assessed against the Eligible Obligations deposited with the Trustee or
the principal or interest received by the Trustee in respect of such
Eligible Obligations.
(g) Anything herein to the contrary notwithstanding, if, at
any time after a Bond would be deemed to have been satisfied or
discharged pursuant to this Section (without regard to the provisions of
this subsection (g)), the Trustee shall be required to return the money
or Eligible Obligations, or combination thereof, deposited with it as
aforesaid to the Company or its representative under any applicable
federal or state bankruptcy, insolvency or other similar law, the
indebtedness of the Company in respect of such Bond shall thereupon be
deemed retroactively not to have been satisfied and discharged, as
aforesaid, and to remain Outstanding.
Section 1.002. SATISFACTION AND DISCHARGE OF INDENTURE.
(a) This Indenture shall upon Company Request cease to be of
further effect (except as hereinafter expressly provided), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(i) either:
(A) all Bonds theretofore
authenticated and delivered (other than (1) Bonds which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.06, and (2)
Bonds deemed to have been paid in accordance with
Section 9.01) have been delivered to the Trustee for
cancellation; or
(B) all Bonds not theretofore
delivered to the Trustee for cancellation (other than
Bonds described in clause (1) of subclause (A) above)
shall be deemed to have been paid in accordance with
Section 9.01;
(ii) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been
complied with.
(b) Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company and the Trustee
under Sections 11.07 and 11.15 and, if subclause (a)(i)(B) of this
Section is applicable, Sections 3.04, 3.05, 3.06, 5.04, 6.02 and 6.03
and this Article Nine shall survive.
(c) Upon satisfaction and discharge of this Indenture as
provided in this Section, the Trustee shall assign, transfer, reconvey
and otherwise turn over to the Company the Mortgaged Property (other
than money and Eligible Obligations held by the Trustee pursuant to
Section 9.03) and shall execute and deliver to the Company such deeds
and other instruments as, in the judgment of the Company, shall be
necessary, desirable or appropriate to effect or evidence such
assignment, transfer, reconveyance and turning over and the release and
discharge of the Lien of this Indenture.
Section 1.003. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited with
the Trustee pursuant to Section 9.01, nor the principal or interest payments
on any such Eligible Obligations, shall be withdrawn or used for any purpose
other than, and shall be held in trust for, the payment of the principal of
and premium, if any, and interest, if any, on the Bonds or portions of
principal amount thereof in respect of which such deposit was made, all
subject, however, to the provisions of Section 6.03; PROVIDED, HOWEVER, that,
unless an Event of Default shall have occurred and be continuing, any cash
received from such principal or interest payments on such Eligible
Obligations deposited with the Trustee, if not then needed for such purpose,
shall upon Company Order, to the extent practicable, be invested in Eligible
Obligations of the type described in clause (ii) of Section 9.01(a) maturing
at such times and in such amounts as shall be sufficient to pay when due the
principal of and premium, if any, and interest, if any, due and to become due
on such Bonds or portions thereof on and prior to Maturity thereof, and
interest earned from such reinvestment shall be paid over to the Company as
received by the Trustee, free and clear of the Lien of this Indenture; and
PROVIDED, FURTHER, that unless an Event of Default shall have occurred and be
continuing, any moneys held in trust in accordance with this Section on the
Maturity of all such Bonds in excess of the amount required to pay the
principal of and premium, if any, and interest, if any, then due on such
Bonds shall upon Company Order be paid over to the Company free and clear of
the Lien of this Indenture.
ARTICLE TEN
EVENTS OF DEFAULT; REMEDIES
Section
1.001. EVENTS OF DEFAULT.
An "Event of Default", wherever used herein with respect to
the Bonds, means any one the following events:
(a) failure to pay interest, if any, on any Bond within
sixty (60) days after same becomes due and payable; or
(b) failure to pay the principal of or premium, if any, on
any Bond after its Maturity; or
(c) failure to perform or breach of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in the performance of which or breach of which is elsewhere in
this Section specifically dealt with) for a period of sixty (60) days
after there has been given, by registered or certified mail, to the
Company by Trustee, or to the Company and the Trustee by the Holders of
at least 50% in principal amount of the Bonds then Outstanding, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder, unless the Trustee, or the Trustee and the Holders of a
principal amount of Bonds not less than the principal amount of Bonds
the Holders of which gave such notice, as the case may be, shall agree
in writing to an extension of such period prior to its expiration;
PROVIDED, HOWEVER, that the Trustee, or the Trustee and the Holders of
such principal amount of Bonds, as the case may be, shall be deemed to
have agreed to an extension of such period if corrective action is
initiated by the Company within such period and is being diligently
pursued; or
(d) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or (ii) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition by one or more Persons other than
the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or for
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order for relief or
any such other decree or order shall have remained unstayed and in
effect for a period of ninety (90) consecutive days; or
(e) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in a
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the authorization of
such action by the Board of Directors; or
(f) the occurrence of a Matured Event of Default under any
Class "A" Mortgage; PROVIDED, HOWEVER, that, anything in this Indenture
to the contrary notwithstanding, the waiver or cure of such event of
default under such Class "A" Mortgage and the rescission and annulment
of the consequences thereof shall constitute a waiver of the
corresponding Event of Default hereunder and a rescission and annulment
of the consequences thereof.
Section 1.002. ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT.
(a) If an Event of Default shall have occurred and be
continuing, then in every such case the Trustee or the Holders of not
less than a majority in aggregate principal amount of the Bonds then
Outstanding may declare the principal amount (or, if any of the Bonds
are Discount Bonds, such portion of the principal amount of such Bonds
as may be specified in the terms thereof as contemplated by Section
3.01) of all of the Bonds to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and
upon receipt by the Company of notice of such declaration such principal
amount (or specified amount), together with premium, if any, and accrued
interest, if any, thereon, shall become immediately due and payable.
(b) At any time after such a declaration of acceleration of
the maturity of the Bonds then Outstanding shall have been made, but
before any sale of any of the Mortgaged Property has been made and
before a judgment or decree for payment of the money due shall have been
obtained by the Trustee as provided in this Article, the Event or Events
of Default giving rise to such declaration of acceleration shall,
without further act, be deemed to have been waived, and such declaration
and its consequences shall, without further act, be deemed to have been
rescinded and annulled, if:
(i) the Company shall have paid or
deposited with the Trustee a sum sufficient to pay
(A) all overdue interest, if any, on
all Bonds then Outstanding;
(B) the principal of and premium, if
any, on any Bonds then Outstanding which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed
therefor in such Bonds; and
(C) all amounts due to the Trustee
under Section 11.07; and
(ii) any Event or Events of Default, other
than the non-payment of the principal of Bonds which shall
have become due solely by such declaration of acceleration,
shall have been cured or waived as provided in Section 10.17.
No such rescission shall affect any subsequent Event of
Default or impair any right consequent thereon.
Section 1.003. ENTRY UPON MORTGAGED PROPERTY.
If an Event of Default shall have occurred and be continuing,
the Company, upon demand of the Trustee and if and to the extent permitted by
law, shall forthwith surrender to the Trustee the actual possession of, and
the Trustee, by such officers or agents as it may appoint, may enter upon and
take possession of, the Mortgaged Property; and the Trustee may hold, operate
and manage the Mortgaged Property and make all needful repairs and such
renewals, replacements, betterments and improvements as to the Trustee shall
seem prudent; and the Trustee may receive the rents, issues, profits,
revenues and other income of the Mortgaged Property; and, after deducting the
costs and expenses of entering, taking possession, holding, operating and
managing the Mortgaged Property, as well as payments for insurance and taxes
and other proper charges upon the Mortgaged Property prior to the Lien of
this Indenture and reasonable compensation to itself, its agents and counsel,
the Trustee may apply the same as provided in Section 10.07. Whenever all
that is then due in respect of the principal of and premium, if any, and
interest, if any, on the Bonds and under any of the terms of this Indenture
shall have been paid and all defaults hereunder shall have been cured, the
Trustee shall surrender possession of the Mortgaged Property to the Company.
Section 1.004. POWER OF SALE; SUITS FOR ENFORCEMENT.
If an Event of Default shall have occurred and be continuing,
the Trustee, by such officers or agents as it shall appoint, with or without
entry, in its discretion may, subject to the provisions of Section 10.16 and
if and to the extent permitted by law:
(a) sell, subject to any mandatory requirements of
applicable law, the Mortgaged Property as an entirety, or in such
parcels as the Holders of a majority in aggregate principal amount of
the Bonds then Outstanding shall in writing request, or in the absence
of such request, as the Trustee may determine, to the highest bidder at
public auction at such place and at such time (which sale may be
adjourned by the Trustee from time to time in its discretion by
announcement at the time and place fixed for such sale, without further
notice) and upon such terms as the Trustee may fix and briefly specify
in a notice of sale to be published once in each week for three
successive weeks prior to such sale in an Authorized Publication in each
Place of Payment for the Bonds of each series; or
(b) proceed to protect and enforce its rights and the rights
of the Holders of Bonds under this Indenture by sale pursuant to
judicial proceedings or by a suit, action or proceeding in equity or at
law or otherwise, whether for the specific performance of any covenant
or agreement contained in this Indenture or in aid of the execution of
any power granted in this Indenture or for the foreclosure of this
Indenture or for the enforcement of any other legal, equitable or other
remedy, as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or the
Holders of Bonds.
The security afforded by this Indenture is given primarily for a business and
commercial purpose. The real estate encumbered by this Indenture is not used
exclusively for residential purposes. The power of sale granted by
subsection (a) of this Section is made in addition to and not in derogation
of the Statutory Power of Sale set forth in Sec. 501-A of Chapter 9 of Title
33 of Maine Revised Statutes Annotated, as it may be amended from time to
time, which is hereby incorporated by reference herein. To the extent, if
any, that said subsection (a), or any part thereof, is found to be
unenforceable because of a conflict with the provisions of the Statutory
Power of Sale, or any related provisions of Maine law, then such Statutory
Power of Sale shall control.
Section 1.005. INCIDENTS OF SALE.
Upon any sale of any of the Mortgaged Property, whether made
under the power of sale hereby given or pursuant to judicial proceedings, to
the extent permitted by law:
(a) the principal amount (or, if any of the Bonds are
Discount Bonds, such portion of the principal amount of such Bonds as
may be specified in the terms thereof as contemplated by Section 3.01)
of all Outstanding Bonds, if not previously due, shall at once become
and be immediately due and payable together with premium, if any, and
accrued interest, if any, thereon;
(b) any Holder or Holders of Bonds or the Trustee may bid
for and purchase the property offered for sale, and upon compliance with
the terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the
purchase money therefor, deliver any Outstanding Bonds or claims for
interest thereon in lieu of cash to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon, and
such Bonds, in case the amounts so payable thereon shall be less than
the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show partial payment;
(c) the Trustee may make and deliver to the purchaser or
purchasers a good and sufficient deed, bill of sale and instrument of
assignment and transfer of the property sold;
(d) the Trustee is hereby irrevocably appointed the true and
lawful attorney of the Company, in its name and stead, to make all
necessary deeds, bills of sale and instruments of assignment and
transfer of the property so sold; and for that purpose it may execute
all necessary deeds, bills of sale and instruments of assignment and
transfer, and may substitute one or more persons, firms or corporations
with like power, the Company hereby ratifying and confirming all that
its said attorney or such substitute or substitutes shall lawfully do by
virtue hereof; but, if so requested by the Trustee or by any purchaser,
the Company shall ratify and confirm any such sale or transfer by
executing and delivering to the Trustee or to such purchaser or
purchasers all proper deeds, bills of sale, instruments of assignment
and transfer and releases as may be designated in any such request;
(e) all right, title, interest, claim and demand whatsoever,
either at law or in equity or otherwise, of the Company of, in and to
the property so sold shall be divested and such sale shall be a
perpetual bar both at law and in equity against the Company, its
successors and assigns, and against any and all persons claiming or who
may claim the property sold or any part thereof from, through or under
the Company; and
(f) the receipt of the Trustee or of the officer making such
sale shall be a sufficient discharge to the purchaser or purchasers at
such sale for his or their purchase money and such purchaser or
purchasers and his or their assigns or personal representatives shall
not, after paying such purchase money and receiving such receipt, be
obliged to see to the application of such purchase money, or be in
anywise answerable for any loss, misapplication or nonapplication
thereof.
Section 1.006. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
(a) If an Event of Default described in Section 10.01(a) or
10.01(b) shall have occurred and be continuing, the Company shall, upon
demand of the Trustee, pay to it, for the benefit of the Holders of the
Bonds with respect to which such Event of Default shall have occurred,
the whole amount then due and payable on such Bonds for principal and
premium, if any, and interest, if any, and, in addition thereto, such
further amount as shall be sufficient to cover any amounts due to the
Trustee under Section 11.07.
(b) If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an
express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company or any other
obligor upon such Bonds and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company
or any other obligor upon such Bonds, wherever situated.
(c) The Trustee shall, to the extent permitted by law, be
entitled to sue and recover judgment as aforesaid either before, during
or after the pendency of any proceedings for the enforcement of the Lien
of this Indenture, and in case of a sale of the Mortgaged Property or
any part thereof and the application of the proceeds of sale as
aforesaid, the Trustee, in its own name and as trustee of an express
trust, shall be entitled to enforce payment of, and to receive, all
amounts then remaining due and unpaid upon the Bonds then Outstanding
for principal, premium if any, and interest, if any, for the benefit of
the Holders thereof, and shall be entitled to recover judgment for any
portion of the same remaining unpaid, with interest as aforesaid. No
recovery of any such judgment by the Trustee and no levy of any
execution upon any such judgment upon any of the Mortgaged Property or
any other property of the Company shall affect or impair the Lien of
this Indenture upon the Mortgaged Property or any part thereof or any
rights, powers or remedies of the Trustee hereunder, or any rights,
powers or remedies of the Holders of the Bonds.
(d) If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights
and the rights of the Holders by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 1.007. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article,
including any rents, profits, revenues and other income collected pursuant to
Section 10.03 (after the deductions therein provided) and any proceeds of any
sale (after deducting the costs and expenses of such sale, including a
reasonable compensation to the Trustee, its agents and counsel, and any
taxes, assessments or Liens prior to the Lien of this Indenture, except any
thereof subject to which such sale shall have been made), whether made under
any power of sale herein granted or pursuant to judicial proceedings, and any
money collected by the Trustee under Sections 7.02 and 8.06(c) or (d),
together with, in the case of an entry or sale or as otherwise provided
herein, any other sums then held by the Trustee as part of the Mortgaged
Property, shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal or premium, if any, or interest, if any, upon presentation of the
Bonds and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 11.07;
SECOND: To the payment of the whole amount
then due and unpaid upon the Outstanding Bonds for principal and premium, if
any, and interest, if any, in respect of which or for the benefit of which
such money has been collected; and in case such proceeds shall be
insufficient to pay in full the whole amount so due and unpaid upon such
Bonds, then to the payment of such principal and interest, if any, without
any preference or priority, ratably according to the aggregate amount so due
and unpaid, with any balance then remaining to the payment of premium, if
any, ratably as aforesaid; PROVIDED, HOWEVER, that any money collected by the
Trustee pursuant to Sections 7.02 and 8.06(c) in respect of interest and
Section 10.03 shall first be applied to the payment of interest so due; and
THIRD: To the payment of the remainder, if
any, to the Company or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may order.
Section 1.008. RECEIVER.
If an Event of Default shall have occurred and, during the
continuance thereof, the Trustee shall have commenced judicial proceedings to
enforce any right under this Indenture, the Trustee shall, to the extent
permitted by law, be entitled, as against the Company, without notice or
demand and without regard to the adequacy of the security for the Bonds or
the solvency of the Company, to the appointment of a receiver of the
Mortgaged Property.
Section 1.009. TRUSTEE MAY FILE PROOFS OF CLAIM.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any
other obligor upon the Bonds or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Bonds shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the
whole amount of principal, premium, if any, and interest, if
any, owing and unpaid in respect of the Bonds and to file such
other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim
for amounts due to the Trustee under Section 11.07) and of the
Holders allowed in such judicial proceeding; and
(ii) to collect and receive any moneys or
other property payable or deliverable on any such claims and
to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amounts due it under
Section 11.07.
(b) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.
Section 0.10. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.
All rights of action and claims under this Indenture or on the
Bonds may be prosecuted and enforced by the Trustee without the possession of
any of the Bonds or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Holders in respect of which such judgment
has been recovered.
Section 0.11. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given written notice
to the Trustee of a continuing Event of Default;
(b) the Holders of not less than a majority in aggregate
principal amount of the Bonds then Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for sixty (60) days after its receipt of
such notice, request and offer of indemnity shall have failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request
shall have been given to the Trustee during such sixty-day period by the
Holders of a majority in aggregate principal amount of the Bonds then
Outstanding;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.
Section 0.12. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTERESt.
Notwithstanding any other provision in this Indenture, the
Holder of any Bond shall have the right, which is absolute and unconditional
to receive payment of the principal of and premium, if any, and (subject to
Section 3.07) interest, if any, on such Bond on the Stated Maturity or
Maturities expressed in such Bond (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
Section 0.13. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, and
Trustee and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Trustee and such Holder shall continue as though no such proceeding had been
instituted.
Section 0.14. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in Section 3.06(f), no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and, subject to
Section 10.11, every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The assertion
or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
Section 0.15. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default
or an acquiescence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
Section 0.16. CONTROL BY HOLDERS OF BONDS.
If an Event of Default shall have occurred and be continuing,
the Holders of a majority in aggregate principal amount of the Bonds then
Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee herein; PROVIDED,
HOWEVER, that
(a) such direction shall not be in conflict with any rule of
law or with this Indenture, and could not involve the Trustee in
personal liability in circumstances where indemnity would not, in the
Trustee's sole discretion, be adequate;
(b) such direction shall not be unduly prejudicial to the
rights of the nonassenting Holders; and
(c) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 0.17. WAIVER OF PAST DEFAULTS.
(a) Before any sale of any of the Mortgaged Property and
before a judgment or decree for payment of the money due shall have been
obtained by the Trustee as hereinafter in this Article provided, the
Holders of not less than a majority in aggregate principal amount of the
Bonds then Outstanding may on behalf of the Holders of all the Bonds
then Outstanding waive any past default hereunder and its consequences,
except a default:
(i) in the payment of the principal of or
premium, if any, or interest, if any, on any Bond Outstanding,
or
(ii) in respect of a covenant or provision
hereof which under Section 14.02(a) cannot be modified or
amended without the consent of the Holder of each Outstanding
Bond of any series or Tranche affected.
(b) Upon any such waiver, such default shall cease to exist,
and any and all Events of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 0.18. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder of Bonds by
its acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in aggregate principal amount of the Bonds then
Outstanding, or to any suit instituted by any Holder for the enforcement of
the payment of the principal of or premium, if any, or interest, if any, on
any Bond on or after the Stated Maturity or Maturities expressed in such Bond
(or, in the case of redemption, on or after the Redemption Date).
Section 0.19. WAIVER OF APPRAISEMENT AND OTHER LAWS.
To the full extent that it may lawfully so agree, the Company
shall not at any time set up, claim or otherwise seek to take the benefit or
advantage of any appraisement, valuation, stay, extension or redemption law
now or hereafter in effect, in order to prevent or hinder the enforcement of
this Indenture or the absolute sale of the Mortgaged Property, or any part
thereof, or the possession thereof, or any part thereof, by any purchaser at
any sale under this Article; and the Company, for itself and all who may
claim under it, so far as it or they now or hereafter may lawfully do so,
hereby waives the benefit of all such laws. The Company, for itself and all
who may claim under it, waives, to the extent that it may lawfully do so, all
right to have the Mortgaged Property marshalled upon any foreclosure of the
Lien hereof, and agrees that any court having jurisdiction to foreclose the
Lien of this Indenture may order the sale of the Mortgaged Property as an
entirety.
Section 0.20. DEFAULTS UNDER CLASS "A" MORTGAGES.
In addition to every other right and remedy provided herein,
the Trustee may exercise any right or remedy available to the Trustee in its
capacity as owner and holder of Pledged Bonds which arises as a result of a
default or Matured Event of Default under any Class "A" Mortgage, whether or
not an Event of Default shall then have occurred and be continuing.
ARTICLE ELEVEN
THE TRUSTEE
Section
1.0021. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the duties
and responsibilities specified with respect to an indenture trustee in
the Trust Indenture Act.
(b) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(c) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
Section 1.0022. NOTICE OF DEFAULTS.
(a) The Trustee shall give the Holders notice of any default
hereunder in the manner and to the extent required to do so by the Trust
Indenture Act, unless such default shall have been cured or waived;
PROVIDED, HOWEVER, that in the case of any default of the character
specified in Section 10.01(c), no such notice to Holders shall be given
until at least forty-five (45) days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which
is, or after notice or lapse of time, or both, would become, an Event of
Default.
(b) The Trustee shall give to the trustee under each Class
"A" Mortgage a copy of each notice of default given to the Holders
pursuant to this Section. In addition, the Trustee shall give to the
Holders copies of each notice of default under any Class "A" Mortgage
given to the Trustee in its capacity as owner and holder of Pledged
Bonds issued and outstanding thereunder.
Section 1.0023. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 11.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order,
or as otherwise expressly provided herein, and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence is specifically prescribed herein) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any Holder pursuant to this Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall (subject to applicable legal
requirements) be entitled to examine, during normal business hours, the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) except as otherwise provided in Section 10.01(c), the
Trustee shall not be charged with knowledge of any Event of Default
unless either (i) a Responsible Officer of the Trustee assigned to the
Corporate Trustee Administration Department of the Trustee (or any
successor division or department of the Trustee) shall have actual
knowledge of the Event of Default, or (ii) written notice of such Event
of Default shall have been given to the Trustee by the Company, any
other obligor on the Bonds or by any Holder of such Bonds or, in the
case of an Event of Default described in Section 10.01(f), by the
trustee under the related Class "A" Mortgage.
Section 1.0024. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
BONDS.
The recitals contained herein and in the Bonds (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Bonds or of any
security therefor. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Bonds or the
proceeds thereof. The Trustee shall have no responsibility for filing any
document or notice at any time in any public office for the purpose of
perfecting, maintaining the perfection of, or making effective the Lien of
this Indenture or for any other purpose and shall have no responsibility for
seeing to the insurance on the Mortgaged Property or for paying any taxes
relating thereto.
Section 1.0025. MAY HOLD BONDS.
Each of the Trustee, any Authenticating Agent, any Paying
Agent, any Bond Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Bonds
and, subject to Sections 11.08 and 11.13, may otherwise deal with the Company
with the same rights it would have if it were not such Trustee,
Authenticating Agent, Paying Agent, Bond Registrar or other agent.
Section 1.0026. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Company.
Section 1.0027. COMPENSATION AND REIMBURSEMENT.
(a) The Company shall:
(i) pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of
an express trust);
(ii) except as otherwise expressly
provided herein, reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances reasonably
incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents
and counsel). except any such expense, disbursement or advance
as may be attributable to its negligence, wilful misconduct or
bad faith; and
(iii) indemnify the Trustee and hold it
harmless from and against any loss, liability or expense
incurred without negligence, wilful misconduct or bad faith on
its part, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including
the reasonable costs and expenses of defending itself against
any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
(b) As security for the performance of the obligations of
the Company under this Section, the Trustee shall have a Lien prior to
the Bonds upon the Mortgaged Property and any money collected by the
Trustee as proceeds of the Mortgaged Property, other than property and
funds held in trust under Section 9.03.
Section 1.0028. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting interest
within the meaning of the Trust Indenture Act, it shall either eliminate such
conflicting interest or resign to the extent, in the manner and with the
effect, and subject to the conditions, provided in the Trust Indenture Act
and this Indenture.
Section 1.0029. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall
be:
(a) a corporation organized and doing business under the
laws of the United States of America, any state or territory thereof or
the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal
or state authority, or
(b) if and to the extent permitted by the Commission by
rule, regulation or order upon application, a corporation or other
Person and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to supervision
or examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or
examination applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and not
otherwise disqualified under Section 310(a)(5) of the Trust Indenture Act.
If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of such supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition' so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
Section 0.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 11.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 11.11 shall not have been
delivered to the Trustee within thirty (30) days after the giving of
such notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Bonds then Outstanding
delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with
Section 11.08 after written request therefor by the Company or
by any Holder who has been a bona fide Holder for at least six
months, or
(ii) the Trustee shall cease to be
eligible under Section 11.09 and shall fail to resign after
written request therefor by the Company or by any such Holder,
or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed
or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such
case, (x) the Company by a Board Resolution may remove the
Trustee, or (y) subject to Section 10.18, any Holder who has
been a bona fide Holder for at least six months may, on behalf
of itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause (other than as contemplated in clause (y) of
subsection (d) of this Section), the Company, by a Board Resolution,
shall take prompt steps to appoint a successor Trustee or Trustees and
shall comply with the applicable requirements of Section 11.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by
Act of the Holders of a majority in principal amount of the Bonds then
Outstanding delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment in accordance with the applicable requirements of
Section 11.11, become the successor Trustee and to that extent supersede
the successor Trustee appointed by the Company. If no successor Trustee
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 11.11, any Holder who has
been a bona fide Holder of a Bond for at least six months may, on behalf
of itself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee
by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the Bond
Register. Each notice shall include the name of the successor Trustee
and the address of its corporate trust office.
Section 0.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor
Trustee, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all sums owed to
it, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company
shall execute any instruments which fully vest in and confirm to such
successor Trustee all rights, powers and trusts referred to in
subsection (a) of this Section.
(c) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.
Section 0.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any Bonds
shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Bonds so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Bonds.
Section 0.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY.
If the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Bonds), the Trustee shall be subject to any
and all applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or such other obligor). For
purposes of Section 311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company (or any such obligor) for the purpose of
financing the purchase, processing, manufacturing, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with the
creation of the creditor relationship with the Company (or any such
obligor) arising from the making, drawing, negotiating or incurring of
the draft, bill of exchange, acceptance or obligation.
Section 0.14. CO-TRUSTEES AND SEPARATE TRUSTEES.
(a) At any time or times, for the purpose of meeting the
legal requirements of any jurisdiction in which any of the Mortgaged
Property may at the time be located, the Company and the Trustee shall
have power to appoint, and, upon the written request of the Trustee or
of the Holders of at least a majority in aggregate principal amount of
the Bonds then Outstanding, the Company shall for such purpose join with
the Trustee in the execution and delivery of all instruments and
agreements necessary or proper to appoint, one or more Persons approved
by the Trustee either to act as co-trustee, jointly with the Trustee, of
all or any part of the Mortgaged Property, or to act as separate trustee
of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person, in the
capacity aforesaid, any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Section. If the
Company does not join in such appointment within fifteen (15) days after
the receipt by it of a request so to do, or if an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power
to make such appointment.
(b) Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so appointed
to more fully confirm to such co-trustee or separate trustee such
property, title, right or power, any and all such instruments shall, on
request, be executed, acknowledged and delivered by the Company.
(c) Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed subject
to the following conditions:
(i) the Bonds shall be authenticated and
delivered, and all rights, powers, duties and obligations
hereunder in respect of the custody of securities, cash and
other personal property held by, or required to be deposited
or pledged with, the Trustee hereunder, shall be exercised
solely, by the Trustee;
(ii) the rights, powers, duties and
obligations hereby conferred or imposed upon the Trustee in
respect of any property covered by such appointment shall be
conferred or imposed upon and exercised or performed either by
the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be
incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised
and performed by such co-trustee or separate trustee;
(iii) the Trustee at any time, by an
instrument in writing executed by it, with the concurrence of
the Company, may accept the resignation of or remove any co-
trustee or separate trustee appointed under this Section, and,
if an Event of Default shall have occurred and be continuing,
the Trustee shall have power to accept the resignation of, or
remove, any such co-trustee or separate trustee without the
concurrence of the Company. Upon the written request of the
Trustee, the Company shall join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to effectuate such resignation or removal.
A successor to any co-trustee or separate trustee so resigned
or removed may be appointed in the manner provided in this
Section;
(iv) no co-trustee or separate trustee
hereunder shall be personally liable by reason of any act or
omission of the Trustee, or any other such trustee hereunder;
and
(v) any Act of Holders delivered to the
Trustee shall be deemed to have been delivered to each such
co-trustee and separate trustee.
Section 0.15. APPOINTMENT OF AUTHENTICATING AGENT.
(a) The Trustee may appoint an Authenticating Agent or
Agents with respect to the Bonds of one or more series, or any Tranche
thereof, which shall be authorized to act on behalf of the Trustee to
authenticate Bonds of such series or Tranche issued upon original
issuance, exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.06, and Bonds so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Bonds by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Company and shall at all times be a
corporation organized and doing business under the laws of the United
States of America, any state or territory thereof or the District of
Columbia or the Commonwealth of Puerto Rico, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of
not less than $50,000,000 and subject to supervision or examination by
federal or state authority. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
(b) Any corporation into which an Authenticating Agent may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent,
provided such corporation shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act
on the part of the Trustee or the Authenticating Agent.
(c) An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee
may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,
the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect
as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
(d) The Company agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this
Section, and the Trustee shall have no liability for such payments. The
Trustee shall not be responsible for any misconduct, bad faith or
negligence on the part of any Authenticating Agent appointed with due
care by the Trustee hereunder.
(e) The provisions of Sections 3.08, 11.04 and 11.05 shall
be applicable to each Authenticating Agent.
(f) If an appointment with respect to the Bonds of one or
more series, or any Tranche thereof, shall be made pursuant to this
Section, the Bonds of such series or Tranche may have endorsed thereon,
in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication substantially
in the following form:
This is one of the Bonds of the series designated
therein referred to in the within-mentioned Indenture.
Chemical Bank,
as Trustee
By____________________________
As Authenticating Agent
By____________________________
Authorized Officer
(g) If all of the Bonds of a series, or any Tranche thereof,
may not be originally issued at one time, and if the Trustee does not
have an office capable of authenticating Bonds upon original issuance
located in a Place of Payment where the Company wishes to have Bonds of
such series or such Tranche authenticated upon original issuance, the
Trustee, if so requested by the Company in writing (which writing need
not comply with Section 1.05 and need not be accompanied by an Opinion
of Counsel), shall appoint, in accordance with this Section and in
accordance with such procedures as shall be acceptable to the Trustee,
an Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of Bonds or such
Tranche.
ARTICLE TWELVE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
Section
1.0016. LISTS OF HOLDERS; PRESERVATION OF INFORMATION.
Semiannually, not later than May 15 and November 15 in each
year, and at such other times as the Trustee may request in writing, the
Company shall furnish or cause to be furnished to the Trustee information as
to the names and addresses of the Holders, and the Trustee shall preserve
such information and similar information received by it in any other capacity
and afford to the Holders access to information so preserved by it, all to
such extent, if any, and in such manner as shall be required by the Trust
Indenture Act. Every Holder of Bonds, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of
the Holders of Bonds in accordance with Section 312 of the Trust Indenture
Act, or any successor section of such Act, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act, or any successor section of
such Act.
Section 1.0017. REPORTS BY TRUSTEE AND COMPANY.
Annually, not later than sixty (60) days after May 15 in each
year commencing with the first May 15th following the first issuance of Bonds
pursuant to Section 3.01, if required by Section 313(a) of the Trust
Indenture Act, or any successor section of such Act, the Trustee shall
transmit to the Holders and the Commission a report with respect to any
events described in Section 313(a) of the Trust Indenture Act, or any
successor section of such Act, in such manner and to the extent required by
the Trust Indenture Act. The Trustee shall transmit to the Holders and the
Commission, and the Company shall file with the Trustee and transmit to the
Holders, such other information, reports and other documents, if any, at such
times and in such manner, as shall be required by the Trust Indenture Act. A
copy of each report required to be transmitted to the Holders pursuant to
Section 313 of the Trust Indenture Act shall, at the time of such
transmission to the Holders, be furnished to the Company and be filed by the
Trustee with each stock exchange. if any, upon which the Bonds of any series,
or any Tranche thereof, are listed and also with the Commission. The Company
agrees to notify the Trustee when and as the Bonds of such series, of any
such Tranche, become admitted to trading on any national securities exchange.
ARTICLE THIRTEEN
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section
1.0018. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
corporation or convey, or otherwise transfer or lease, subject to the Lien of
this Indenture, the Mortgaged Property as or substantially as an entirety to
any Person, unless:
(a) such consolidation, merger, conveyance, other transfer
or lease shall be on such terms as shall fully preserve in all material
respects the Lien and security of this Indenture and the rights and
powers of the Trustee and the Holders of the Bonds hereunder;
(b) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or other transfer, or which leases, the Mortgaged Property as or
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any state or
territory thereof or the District of Columbia (such corporation being
hereinafter sometimes called the ("Successor Corporation") and shall
execute and deliver to the Trustee an indenture supplemental hereto, in
form recordable and satisfactory to the Trustee, which:
(i) in the case of a consolidation,
merger, conveyance or other transfer, or in the case of a
lease if the term thereof extends beyond the last Stated
Maturity of the Bonds then Outstanding, contains an assumption
by the Successor Corporation of the due and punctual payment
of the principal of and premium, if any, and interest, if any,
on all the Bonds then Outstanding and the performance and
observance of every covenant and condition of this Indenture
to be performed or observed by the Company, and
(ii) in the case of a consolidation,
merger, conveyance or other transfer, contains a grant,
conveyance, transfer and mortgage by the Successor
Corporation, of the same tenor of the Granting Clauses herein:
(A) confirming the Lien of this
Indenture on the Mortgaged Property (as constituted
immediately prior to the time such transaction became
effective) and subjecting to the Lien of this Indenture
all property real, personal and mixed, thereafter
acquired by the Successor Corporation which shall
constitute an improvement, extension or addition to the
Mortgaged Property (as so constituted) or a renewal,
replacement or substitution of or for any part thereof,
and
(B) at the election of the Successor
Corporation, subjecting to the Lien of this Indenture
such property, real, personal or mixed, in addition to
the property described in subclause (A) above, then
owned or thereafter acquired by the Successor
Corporation as the Successor Corporation shall, in its
sole discretion, specify or describe therein,
and the Lien confirmed or created by such grant, conveyance, transfer
and mortgage shall have force, effect and standing similar to those
which the Lien of this Indenture would have had if the Company had not
been a party to such consolidation, merger, conveyance or other transfer
and had itself, after the time such transaction became effective,
purchased, constructed or otherwise acquired the property subject to
such grant, conveyance, transfer and mortgage;
(c) in the case of a lease, such lease shall be made
expressly subject to termination by the Company or by the Trustee at any
time during the continuance of an Event of Default, and also by the
purchaser of the property so leased at any sale thereof hereunder,
whether such sale be made under the power of sale hereby conferred or
pursuant to judicial proceedings; and
(d) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each of which shall
state that such consolidation, merger, conveyance or other transfer or
lease, and such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Section 1.0019. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any conveyance or other
transfer, subject to the Lien of this Indenture, of the Mortgaged Property as
or substantially as an entirety in accordance with Section 13.01, the
Successor Corporation shall succeed to, and be substituted for, and may
exercise every power and right of, the Company under this Indenture with the
same effect as if such Successor Corporation had been named as the "Company"
herein. Without limiting the generality of the foregoing:
(a) all property of the Successor Corporation then subject
to the Lien of this Indenture, of the character described in Section
1.04(a), shall constitute Property Additions;
(b) the Successor Corporation may execute and deliver to the
Trustee, and thereupon the Trustee shall, subject to the provisions of
Article Four, authenticate and deliver, Bonds upon the basis of Property
Additions or upon any other basis provided in Article Four; and
(c) the Successor Corporation may, subject to the applicable
provisions of this Indenture, cause Property Additions to be applied to
any other Authorized Purpose.
All Bonds so executed by the Successor Corporation, and authenticated and
delivered by the Trustee, shall in all respects be entitled to the same
benefit of the Lien and security of this Indenture as all Bonds executed,
authenticated and delivered prior to the time such consolidation, merger,
conveyance or other transfer became effective.
Section 1.0020. EXTENT OF LIEN HEREOF ON PROPERTY OF
SUCCESSOR CORPORATION.
Unless, in the case of a consolidation, merger, conveyance or
other transfer contemplated by Section 13.01, the indenture supplemental
hereto contemplated in clause (ii) of Section 13.01(b), or any other
indenture, contains a grant, conveyance, transfer and mortgage by the
Successor Corporation as described in subclause (B) thereof, neither this
Indenture nor such supplemental indenture shall become or be required to
become or be a Lien upon any of the properties then owned or thereafter
acquired by the Successor Corporation except properties acquired from the
Company in or as a result of such transaction and improvements, extensions
and additions to such properties and renewals, replacements and substitutions
of or for any part or parts of such properties.
Section 1.0021. RELEASE OF COMPANY UPON CONVEYANCE OTHER
TRANSFER.
In the case of a conveyance or other transfer contemplated in
Section 13.01, upon the satisfaction of all the conditions specified in
Section 13.01 the Company (such term being used in this Section without
giving effect to such transaction) shall be released and discharged from all
obligations and covenants under this Indenture and on and under all Bonds
then Outstanding unless the Company shall have delivered to the Trustee an
instrument in which it shall waive such release and discharge.
Section 1.0022. MERGER INTO COMPANY; EXTENT OF LIEN HEREOF.
(a) Nothing in this Indenture shall be deemed to prevent or
restrict any consolidation or merger after the consummation of which the
Company would be the surviving or resulting corporation or any
conveyance or other transfer or lease, subject to the Lien of this
Indenture, of any part of the Mortgaged Property which does not
constitute the entirety, or substantially the entirety, thereof.
(b) Unless, in the case of a consolidation or merger
described in subsection (a) of this Section, an indenture supplemental
hereto shall otherwise provide, this Indenture shall not become or be,
or be required to become or be, a Lien upon any of the properties
acquired by the Company in or as a result of such transaction or any
improvements, extensions or additions to such properties or any
renewals, replacements or substitutions of or for any part or parts of
such properties.
ARTICLE FOURTEEN
SUPPLEMENTAL INDENTURES
Section
1.0023. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
(a) Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(i) to evidence the succession of another
Person to the Company and the assumption by any such successor
of the covenants of the Company herein and in the Bonds, all
as provided in Article Thirteen; or
(ii) to add one or more covenants of the
Company or other provisions for the benefit of all Holders or
for the benefit of the Holders of, or to remain in effect only
so long as there shall be Outstanding, Bonds of one or more
specified series, or one or more specified Tranches thereof,
or to surrender any right or power herein conferred upon the
Company; or
(iii) to correct or amplify the description
of any property at any time subject to the Lien of this
Indenture, or better to assure, convey and confirm unto the
Trustee any property subject or required to be subjected to
the Lien of this Indenture, or to subject to the Lien of this
Indenture additional property; or
(iv) to convey, transfer and assign to the
Trustee and to subject to the Lien of this Indenture with the
same force and effect as if included in the Granting Clauses
herein, property of subsidiaries of the Company used or to be
used for one or more purposes which if owned by the Company
would constitute property used or to be used for one or more
of the Primary Purposes of the Company's Business, which
property shall for all purposes of this Indenture be deemed to
be property of the Company, together with such other
provisions as may be appropriate to express the respective
rights of the Trustee and the Company in regard thereto;
(v) to change or eliminate any provision
of this Indenture or to add any new provision to this
Indenture; PROVIDED, HOWEVER, that if such change, elimination
or addition shall adversely affect the interests of the
Holders of Bonds of any series or Tranche in any material
respect, such change, elimination or addition shall become
effective with respect to such series or Tranche only when no
Bond of such series or Tranche remains Outstanding; or
(vi) to establish the form or terms of
Bonds of any series or Tranche as contemplated by Sections
2.01 and 3.01; or
(vii) to provide for the authentication and
delivery of bearer bonds and coupons appertaining thereto
representing interest, if any, thereon and for the procedures
for the registration, exchange and replacement thereof and for
the giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(viii) to evidence and provide for the
acceptance of appointment hereunder by a successor Trustee or
by a co-trustee or separate trustee; or
(ix) to provide for the procedures
required to permit the Company to utilize, at its option, a
non-certificated system of registration for all, or any series
or Tranche of, the Bonds; or
(x) to change any place or places where
(A) the principal of and premium, if any, and interest, if
any, on all or any series of Bonds, or any Tranche thereof,
shall be payable, (B) all or any series of Bonds, or any
Tranche thereof, may be surrendered for registration of
transfer, (C) all or any series of Bonds, or any Tranche
thereof, may be surrendered for exchange, and (D) notices and
demands to or upon the Company in respect of all or any series
of Bonds, or any Tranche thereof, and this Indenture may be
served; or
(xi) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or
inconsistent with any other provision herein; or to make any
changes to the provisions hereof or to add other provisions
with respect to matters or questions arising under this
Indenture, provided that such other changes or additions shall
not adversely affect the interests of the Holders of Bonds of
any series or Tranche in any material respect; or
(xii) to reflect changes in Generally
Accepted Accounting Principles; or
(xiii) to provide the terms and conditions
of the exchange or conversion, at the option of the holders of
Bonds of any series, of the Bonds of such series for or into
Bonds of other series or stock or other securities of the
Company or any other corporation; or
(xiv) to change the words "General and
Refunding Mortgage Bonds" to "First Mortgage Bonds" in the
descriptive title of all Outstanding Bonds at any time after
the discharge of the 1936 Mortgage; or
(xv) to comply with the rules or
regulations of any national securities exchange on which any
of the Bonds may be listed; or
(xvi) to modify Section 3.01(a) to change
the aggregate principal amount of Bonds which may be
authenticated and delivered under this Indenture.
(b) Without limiting the generality of the foregoing, if the
Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be amended
and:
(i) if any such amendment shall require
one or more changes to any provisions hereof or the inclusion
herein of any additional provisions, or shall by operation of
law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, this Indenture shall be
deemed to have been amended so as to conform to such amendment
to the Trust Indenture Act, and the Company and the Trustee
may, without the consent of any Holders, enter into an
indenture supplemental hereto to evidence such amendment
hereof; or
(ii) if any such amendment shall permit
one or more changes to, or the elimination of, any provisions
hereof which, at the date of the execution and delivery hereof
or at any time thereafter, are required by the Trust Indenture
Act to be contained herein or are contained herein to reflect
any provisions of the Trust Indenture Act as in effect at such
date, the Company and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental hereto to
effect such changes or elimination.
Section 1.0024. SUPPLEMENTAL INDENTURES WITH CONSENT OF
HOLDERS.
(a) With the consent of the Holders of not less than a
majority in aggregate principal amount of the Bonds of all series then
Outstanding under this Indenture, considered as one class, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture; PROVIDED, HOWEVER, that if there shall be
Bonds of more than one series Outstanding hereunder and if a proposed
supplemental indenture shall directly affect the rights of the Holders
of Bonds of one or more, but less than all, of such series, then the
consent only of the Holders of a majority in aggregate principal amount
of the Outstanding Bonds of all series so directly affected, considered
as one class, shall be required; and PROVIDED, FURTHER, that if the
Bonds of any series shall have been issued in more than one Tranche and
if the proposed supplemental indenture shall directly affect the rights
of the Holders of Bonds of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in
aggregate principal amount of the Outstanding Bonds of all Tranches so
directly affected, considered as one class, shall be required; and
PROVIDED, FURTHER, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Bond of each series or
Tranche so directly affected:
(i) change the Stated Maturity of the
principal of, or any installment of principal of or interest
on, any Bond, or reduce the principal amount thereof or the
rate of interest thereon (or the amount of any installment of
interest thereon) or change the method of calculating such
rate or reduce any premium payable upon the redemption
thereof, or reduce the amount of the principal of a Discount
Bond that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section
10.02(a), or change the coin or currency (or other property),
in which any Bond or any premium or the interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after
the Redemption Date); or
(ii) permit the creation of any Lien
ranking prior to the Lien of this Indenture with respect to
all or substantially all of the Mortgaged Property or
terminate the Lien of this Indenture on all or substantially
all of the Mortgaged Property, or deprive such Holder of the
benefit of the security of the Lien of this Indenture; or
(iii) reduce the percentage in principal
amount of the Outstanding Bonds of such series or Tranche, the
consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any
waiver of compliance with any provision of this Indenture or
of any default hereunder and its consequences, or reduce the
requirements of Section 15.04(a) for quorum or voting; or
(iv) modify any of the provisions of this
Section, Section 6.10 or Section 10.17, except to increase the
percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Bond affected
thereby.
(b) A supplemental indenture which (i) changes or eliminates
any covenant or other provision of this Indenture which has expressly
been included solely for the benefit of the Holders of, or which is to
remain in effect only so long as there shall be Outstanding, Bonds of
one or more specified series, or one or more Tranches thereof, or (ii)
modifies the rights of the Holders of Bonds of such series or Tranches
with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Bonds of any
other series or Tranche.
(c) It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
Section 14.03. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 11.01) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties, immunities or
liabilities under this Indenture or otherwise.
Section 14.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Bonds theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby. Any supplemental indenture
permitted by this Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such restatement shall supersede
this Indenture as theretofore in effect for all purposes.
Section 14.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in
effect.
Section 14.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.
Bonds of any series, or any Tranche thereof, authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Bonds of any series, or
any Tranche thereof, so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered in exchange for
Outstanding Bonds of such series or Tranche.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
Section
1.0025. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Bonds of one or more, or all, series,
or any Tranche or Tranches thereof, may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Bonds of such series
or Tranches.
Section 1.0026. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Bonds of one or more, or all, series, or any Tranche or Tranches
thereof, for any purpose specified in Section 15.01, to be held at such
time and (except as provided in subsection (b) of this Section) at such
place in the Borough of Manhattan as the Trustee shall determine, or,
with the approval of the Company, at any other place. Notice of every
such meeting, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall
be given, in the manner provided in Section 1.09, not less than twenty-
one (21) nor more than one hundred and eighty (180) days prior to the
date fixed for the meeting.
(b) The Trustee may be asked to call a meeting of the
Holders of Outstanding Bonds of one or more, or all, series, or any
Tranche or Tranches thereof, by the Company or by the Holders of 25% in
aggregate principal amount of all of such series and Tranches,
considered as one class, for any purpose specified in Section 15.01, by
written request setting forth in reasonable detail the action proposed
to be taken at the meeting. If the Trustee shall have been asked by the
Company to call such a meeting, the Company shall determine the time and
place for such meeting by giving notice thereof in the manner provided
in subsection (a) of this Section, or shall direct the Trustee, in the
name and at the expense of the Company, to give such notice. If the
Trustee shall have been asked to call such a meeting by Holders in
accordance with this subsection (b), and the Trustee shall not have
given the notice of such meeting within twenty-one (21) days after
receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Holders of Bonds of such
series and Tranches in the amount above specified, may determine the
time and the place in the Borough of Manhattan, or in such other place
as shall be determined or approved by the Company, for such meeting and
may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
(c) Any meeting of Holders of Bonds of one or more, or all,
series, or any Tranche or Tranches thereof, shall be valid without
notice if the Holders of all Outstanding Bonds of such series or
Tranches are present in person or by proxy and if representatives of the
Company and the Trustee are present, or if notice is waived in writing
before or after the meeting by the Holders of all Outstanding Bonds of
such series, or any Tranche or Tranches thereof, or by such of them as
are not present at the meeting in person or by proxy, and by the
Company.
Section 1.0027. PERSONS ENTITLED TO VOTE AT MEETINGS; RECORD
DATE.
To be entitled to vote at any meeting of Holders of Bonds of
one or more, or all, series, or any Tranche or Tranches thereof, a Person
shall be (a) a Holder of one or more Outstanding Bonds of such series or
Tranches on the record date fixed as provided below, or (b) a Person
appointed by an instrument in writing by a Holder or Holders of one or more
Outstanding Bonds of such series or Tranches on the record date fixed as
provided below as proxy for such Holder or Holders. The only Persons who
shall be entitled to attend any meeting of Holders of Bonds of any series or
Tranche shall be the Persons entitled to vote at such meeting, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel. The Company may fix in advance a record date in
accordance with Section 1.07(g) for the determination of Holders who are
entitled to vote at a meeting called pursuant to Section 15.02 and, if the
Company does not so fix a record date, the Trustee may
do so.
Section 1.0028. QUORUM; ACTION.
(a) The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Bonds of the series and Tranches
with respect to which a meeting shall have been called as hereinbefore
provided, considered as one class, shall constitute a quorum for a
meeting of Holders of Bonds of such series and Tranches; PROVIDED,
HOWEVER, that if any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Bonds of such series and Tranches, considered as one class,
the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Bonds of such series and Tranches, considered
as one class, shall constitute a quorum. In the absence of a quorum
within one hour of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Bonds of such series and
Tranches, be dissolved. In any other case the meeting may be adjourned
for such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further
adjourned for such period as may be determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Except as
provided by Section 15.05(e), notice of the reconvening of any meeting
adjourned for more than thirty (30) days shall be given as provided in
Section 1.09 not less than ten (10) days prior to the date on which the
meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided
above, of the principal amount of the Outstanding Bonds of such series
and Tranches which shall constitute a quorum.
(b) Except as limited by Section 14.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a
quorum is present as aforesaid may be adopted only by the affirmative
vote of the Holders of a majority in aggregate principal amount of the
Outstanding Bonds of the series and Tranches with respect to which such
meeting shall have been called, considered as one class; PROVIDED,
HOWEVER, that, except as so limited, any resolution with respect to any
action which this Indenture expressly provides may be taken by the
Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Bonds of such series and Tranches,
considered as one class, may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by
the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Bonds of such series and Tranches,
considered as one class.
(c) Any resolution passed or decision taken at any meeting of
Holders of Bonds duly held in accordance with this Section shall be
binding on all the Holders of Bonds of the series and Tranches with
respect to which such meeting shall have been held, whether or not
present or represented at the meeting.
Section 1.0029. ATTENDANCE AT MEETINGS; DETERMINATION OF
VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Bonds may be in
person or by proxy; and, to the extent permitted by law, any such proxy
shall remain in effect and be binding upon any future Holder of the
Bonds with respect to which it was given unless and until specifically
revoked by the Holder or future Holder of such Bonds before being voted;
provided that if a record date has been established in accordance with
Section 15.03, only a Holder of Bonds as to which a proxy was given who
was the Holder thereof on such record date may subsequently revoke such
proxy.
(b) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Bonds in regard to proof of the
holding of such Bonds and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by
any such regulations, the holding of Bonds shall be proved in the manner
specified in Section 1.07 and the appointment of any proxy shall be
proved in the manner specified in Section 1.07. Such regulations may
provide that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof specified in
Section 1.07 or other proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 15.02(b), in
which case the Company or the Holders of Bonds of the series and
Tranches calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in aggregate principal amount of the
Outstanding Bonds of all series and Tranches represented at the meeting,
considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to
one vote for each $1,000 principal amount of Outstanding Bonds held or
represented by him; PROVIDED, HOWEVER, that no vote shall be cast or
counted at any meeting in respect of any Bond challenged as not
Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Bond or proxy.
(e) Any meeting duly called pursuant to Section 15.02 at
which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in aggregate principal amount of the
Outstanding Bonds of all series and Tranches represented at the meeting,
considered as one class; and the meeting may be held as so adjourned
without further notice.
Section 1.0030. COUNTING VOTES AND RECORDING ACTION OF
MEETINGS.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the
signatures of the Holders or of their representatives by proxy and the
principal amounts and serial numbers of the Outstanding Bonds, of the series
and Tranches with respect to which the meeting shall have been called, held
or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports of all votes cast at the meeting. A
record of the proceedings of each meeting of Holders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 15.02 and, if applicable, Section
15.04. At least two copies shall be signed and verified by the affidavits of
the permanent chairman and secretary of the meeting and one such copy shall
be delivered to the Company, and the other to the Trustee to be preserved by
the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
Section 1.0031. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization, direction,
notice, consent, waiver or other action may be made, given or taken by
Holders by written instruments as provided in Section 1.07.
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section
1.0032. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of
or premium if any, or interest, if any, on any Bonds, or any part thereof, or
for any claim based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation, covenant or
agreement under this Indenture, against any incorporator, stockholder,
officer or director, as such, past, present or future of the Company or of
any predecessor or successor corporation (either directly or through the
Company or a predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly agreed and
understood that this Indenture and all the Bonds are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
incurred by, any incorporator, stockholder, officer or director, past,
present or future, of the Company or of any predecessor or successor
corporation, either directly or indirectly through the Company or any
predecessor or successor corporation, because of the indebtedness hereby
authorized or under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the Bonds or to be
implied herefrom or therefrom, and that any such personal liability is hereby
expressly waived and released as a condition of, and as part of the
consideration for, the execution of this Indenture and the issuance of the
Bonds.
---------------------------------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY
By: /s/ Robert S. Briggs
---------------------------
Title: President
[Corporate Seal]
Attest:
/s/ Frederick S. Samp
- ------------------------
Clerk
CHEMICAL BANK,
as Trustee
By: /s/ W. B. Dodge
------------------------
Title: Vice President
-------------------------
[Corporate Seal]
Attest:
/s/ Wanda Eiland
-----------------------
Trust Officer
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On June 28, 1995 before me personally appeared the above-named
ROBERT S. BRIGGS, a PRESIDENT, and FREDERICK S. SAMP, a CLERK, of Bangor
Hydro-Electric Company, the corporation that executed the within and
foregoing instrument, and severally acknowledged said instrument to be their
free act and deed in their said capacities and the free act and deed of the
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
the day and year first above mentioned.
/s/ Matthew H. Frances
--------------------------
Notary Public
#31-5032254
My Commission expires August 22, 1996
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On June 27, 1995 before me personally appeared the above-named
W. B. Dodge, a Vice-President, and Wanda Eiland, a Trust Officer of Chemical
Bank, the national banking institution that executed the within and foregoing
instrument as Trustee, and severally acknowledged said instrument to be their
free act and deed in their said capacities and the free act and deed of the
said national banking institution, as such Trustee.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
the day and year first above mentioned.
/s/ Emily Fayan
------------------------
Notary Public
#24-4737006
My Commission expires December 31, 1995
[NOTARIAL SEAL]
EXHIBIT A
DESCRIPTION OF PROPERTY
All land and interests in land subject to the lien of and referenced in
the Mortgage and Deed of Trust, dated as of July 1, 1936, between Bangor
Hydro-Electric Company and City Bank Farmers Trust Company (as predecessor to
Citibank, N.A.), as supplemented and amended by duly recorded indentures
supplemental thereto (and related real estate property descriptions) (the
"1936 Mortgage") except land and interests in land which have been
specifically released from such lien from time to time; and as originally
recorded in the following places in the State of Maine: in Aroostook County
Registry of Deeds, Book 444, Page 130; in Hancock County Registry of Deeds,
in Book 654, Page 79; in Penobscot County Registry of Deeds, in Book 1117,
Page 3, in Piscataquis County Registry of Deeds, in Book 257, Page 241, in
Washington County Registry of Deeds, in Book 418, Page 102; in Cumberland
County Registry of Deeds, in Book 3957, Page 1; in Waldo County Registry of
Deeds, in Book 786, Page 119; in the City Clerk's Office for the City of
Bangor, in Book 19, Page 304; and in the Rockingham County Registry of Deeds
in the State of New Hampshire, in Book 2351, Page 203.
Such land and interests in land are further described in certain
supplemental indentures, dated respectively as of March 1, 1938, recorded in
the Penobscot County Registry of Deeds in Book 1129, Page 380; January 17,
1939, recorded in the Penobscot County Registry of Deeds in Book 1134, Page
445; March 1, 1941, recorded in the Penobscot County Registry of Deeds in
Book 1167, Page 226; February 11, 1942, recorded in the Penobscot County
Registry of Deeds in Book 1177, Page 412; July 10, 1945, recorded in the
Penobscot County Registry of Deeds in Book 1223, Page 382; July 8, 1947,
recorded in the Penobscot County Registry of Deeds in Book 1268, Page 48;
September 13, 1949, recorded in the Penobscot County Registry of Deeds in
Book 1308, Page 446; May 20, 1952, recorded in the Penobscot County Registry
of Deeds in Book 1363, Page 193; December 1, 1984, recorded in the Penobscot
County Registry of Deeds in Book 3608, Page 117; March 15, 1989, recorded in
the Penobscot County Registry of Deeds in Book 4408, Page 165; July 3, 1990,
recorded in the Penobscot County Registry of Deeds in Book 4678, Page 205;
March 31, 1992, recorded in the Penobscot County Registry of Deeds in Book
5037, Page 229; October 22, 1992, recorded in the Penobscot County Registry
of Deeds in Book 5192, Page 1; and June 23, 1995. Additional supplemental
indentures are recorded in certain other registries of deeds in the State of
Maine. Recording information for such registrations are on file at the
offices of the Company.
EXHIBIT B
Modifications to the 1936 Mortgage
1. The modification of Section 1 by modifying the definition of "net
earnings of the Company" to incorporate the definition of "Adjusted Net
Earnings" from the General and Refunding Mortgage Indenture and Deed of
Trust, dated as of June 1, 1995.
2. The modification of the sixth paragraph of Section 27 of the 1936
Mortgage by (i) substituting "18 months" for "15 months," and
(ii) deleting the phrase "at least twice the interest charges" and
inserting in lieu thereof the phrase "one and one-half (1.50) times the
interest charges."
3. The modification of Section 49 of the 1936 Mortgage by (i) deleting the
last two sentences of the first paragraph thereof, and (ii) adding the
words "in excess of $300,000 for any one loss" before the words "being
payable to the Trustee as its interest may appear" in the first sentence
of the first paragraph thereof.
4. The deletion of ARTICLE SEVENTH of the 1936 Mortgage in its entirety and
all references thereto.
5. The modification of Section 86 of the 1936 Mortgage by deleting all
provisions thereof after subsection (b).
6. The modification of Section 87 of the 1936 Mortgage by deleting the
second paragraph thereof, beginning "Provided, however . . .".
7. The modification of Section 88 of the 1936 Mortgage by deleting (i) all
provisions therein which relate to, incorporate or depend upon any
provisions of Sections 86 and 87 referred to in paragraphs 5 and 6
above, and (ii) the last sentence thereof.
BANGOR HYDRO-ELECTRIC COMPANY
TO
CHEMICAL BANK,
AS TRUSTEE
_____________
SUPPLEMENTAL INDENTURE
DATED AS OF JUNE 15, 1995
TO
GENERAL AND REFUNDING MORTGAGE INDENTURE AND DEED OF TRUST
DATED AS OF JUNE 1, 1995
SUPPLEMENTAL INDENTURE, dated as of June 15, 1995 (the
"Supplemental Indenture"), made by and between BANGOR HYDRO-ELECTRIC COMPANY,
a corporation organized and existing under the laws of the State of Maine
(the "Company"), the post office address of which is 33 State Street, Bangor,
Maine 04401, and CHEMICAL BANK, a corporation organized and existing under
the laws of the State of New York (the "Trustee"), as Trustee under the
General and Refunding Mortgage Indenture and Deed of Trust dated as of June
1, 1995, hereinafter mentioned, the post office address of which is 450 West
33rd Street, New York, New York 10001;
WHEREAS, the Company has heretofore executed and delivered its
General and Refunding Mortgage Indenture and Deed of Trust dated as of June
1, 1995 (the "Indenture"), to the Trustee, for the security of the bonds of
the Company to be issued thereunder (the "Bonds"); and
WHEREAS, the Company desires to create a new series of Bonds
to be issued under the Indenture, to be known as General and Refunding
Mortgage Bonds, Series A (the "Series A Bonds"); and
WHEREAS, pursuant to a Loan Agreement dated as of June 1, 1995
between the Finance Authority of Maine ("FAME") and the Company (the "Loan
Agreement"), One Hundred and Twenty-six Million Dollars ($126,000,000)
aggregate principal amount of Series A Bonds are to be registered in the name
of FAME, and assigned to First Fidelity Bank, the trustee (hereinafter,
together with any successor trustee, called the "FAME Trustee") under a Trust
Indenture, dated as of June 1, 1995 between FAME and the FAME Trustee
(the "FAME Indenture"); and
WHEREAS, the Series A Bonds are to be held in pledge to
evidence and secure the obligations of the Company under the Loan Agreement
and in particular for the security of the payment of the principal and
interest on One Hundred and Twenty-six Million Dollars ($126,000,000)
aggregate principal amount of Finance Authority of Maine Taxable Electric
Rate Stabilization Revenue Notes, Series 1995A (Bangor Hydro-Electric
Company) (the "FAME Bonds") being issued under the FAME Indenture and
Additional Payments (as defined in the Loan Agreement); and
WHEREAS, the Company, in the exercise of the powers and
authority conferred upon and reserved to it under the provisions of the
Indenture, has duly resolved and determined to make, execute and deliver to
the Trustee a Supplemental Indenture in the form hereof for the purposes
herein provided; and
WHEREAS, all conditions and requirements necessary to make
this Supplemental Indenture a valid, binding and legal instrument have been
done, performed and fulfilled and the execution and delivery hereof have been
in all respects duly authorized;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
THAT BANGOR HYDRO-ELECTRIC COMPANY, in consideration of the
service by the Trustee, and its successors, under the Indenture and of One
Dollar to it duly paid by the Trustee at or before the ensealing and delivery
of these presents, the receipt whereof is hereby acknowledged, hereby
covenants and agrees to and with the Trustee and its successors in the trust
under the Indenture, for the benefit of those who shall hold the Bonds as
follows:
ARTICLE I.
DESCRIPTION OF THE SERIES A BONDS.
SECTION 1. The Company hereby creates a new series of Bonds
to be known as "General and Refunding Mortgage Bonds, Series A" (hereinafter
referred to as the "Series A Bonds"). The Series A Bonds shall be executed,
authenticated and delivered in accordance with the provisions of, and shall
in all respects be subject to, all of the terms, conditions and covenants of
the Indenture, as supplemented and modified.
The Series A Bonds shall be evidenced by registered Bonds in
the aggregate principal amount of One Hundred and Twenty-six Million Dollars.
The commencement of the first interest period for the Series A Bonds shall be
June 30, 1995. The Series A Bonds shall mature as provided in Article III
and shall bear interest at the rate of seven and three-hundredths percent
(7.03%) per annum, payable semi-annually on the first day of January and the
first day of July in each year, commencing January 1, 1996. The Series A
Bonds shall upon issuance be delivered by the Company to and be registered in
the name of FAME, shall be assigned by FAME to the FAME Trustee and shall be
transferable thereafter only (i) to the Company as provided herein, or (ii)
as required to effect an assignment thereof to a successor trustee under the
FAME Indenture.
To the extent that the Company, pursuant to the Loan
Agreement, furnishes directly to the FAME Trustee at its principal corporate
trust office all funds required for any and all payments of principal of and
interest on the FAME Bonds, such payments shall be deemed to constitute
corresponding payments of interest and installments of principal on the
Series A Bonds.
Unless payment then is or has been made pursuant to the next
preceding paragraph, payment of the principal of and interest on the Series A
Bonds shall be made in any coin or currency of the United States which at the
time of payment is legal tender for the payment of public and private debts
at the principal corporate trust office of the FAME Trustee, by wire transfer
to the FAME Trustee for the account of FAME in funds immediately available at
said office of the FAME Trustee, in each case on or prior to 11:00 a.m. of
the second Business Day preceding the due date for such payment. Any such
payment of principal or interest shall be credited as and used to make a
corresponding payment of principal and interest on the FAME Bonds.
The Trustee may at any and all times conclusively assume that
the obligations of the Company to make payments with respect to the principal
of and interest on Series A Bonds, so far as such payments shall at the time
have become due, has been fully satisfied and discharged unless and until the
Trustee shall have received a written notice from the FAME Trustee signed by
one of its officers, stating (i) that the Company is in arrears as to the
payments required to be made by it to the FAME Trustee pursuant to the Loan
Agreement and (ii) the amount of the arrearage.
The FAME Trustee, by acceptance of the assignment of the
Series A Bonds, agrees that it shall upon the payment or cancellation of any
FAME Bonds (other than through the application of funds drawn from the
Capital Reserve Fund (as defined in the Loan Agreement) or otherwise provided
directly by FAME (and in each case not reimbursed by the Company)), deliver
to the Company a like principal amount of Series A Bonds, and shall surrender
the remaining Series A Bonds to the Company upon final payment of the FAME
Bonds.
Any notice affecting or relating to the Series A Bonds
required or permitted to be given under the Indenture to Holders may be given
by mailing the same by first class mail, postage prepaid, to the FAME Trustee
at 10 State House Square, Hartford, Connecticut 06103 and to FAME at 83
Western Avenue, Augusta, Maine 04330-7226 or at such other address as may be
provided to the Trustee by written notice from the FAME Trustee or FAME, as
the case may be. The certificate of the Trustee that such mailing has been
effective shall be conclusive evidence of compliance with the requirements of
this Section, whether or not the FAME Trustee or FAME receive such notice.
The Trustee hereunder shall, by virtue of its office as such
Trustee, be the Registrar and Transfer Agent of the Company for the purpose
of registering and transferring Series A Bonds, and shall maintain a Bond
register for the Series A Bonds.
SECTION 2. The Series A Bonds and the Trustee's Certificate
of Authentication shall be substantially in the following forms,
respectively:
[FORM OF FACE OF BOND]
NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER OF THIS BOND AS SET FORTH BELOW. IN ADDITION, THE SECURITY
REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND SUCH SECURITY MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH
APPLICABLE SECURITIES LAWS.
THIS BOND IS NOT TRANSFERABLE EXCEPT (I) TO THE COMPANY OR (II) TO THE
TRUSTEE OR SUCCESSOR TRUSTEE UNDER THE TRUST INDENTURE DATED AS OF JUNE 1,
1995 BETWEEN THE FINANCE AUTHORITY OF MAINE AND FIRST FIDELITY BANK, AS
TRUSTEE.
BANGOR HYDRO-ELECTRIC COMPANY
GENERAL AND REFUNDING MORTGAGE BOND, SERIES A
No. A- $___________
BANGOR HYDRO-ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Maine (the "Company", which term
shall include any successor corporation as defined in the Indenture
hereinafter referred to), for value received, hereby promises to pay to the
Finance Authority of Maine or registered assigns, the principal sum of
_______________ Dollars on the 1st day of July, ____, in any coin or currency
of the United States of America which at the time of payment is legal tender
for public and private debts, and to pay interest thereon in like coin or
currency from June 30, 1995, payable semi-annually, on the first days of
January and July in each year, commencing January 1, 1996, at the rate of
seven and three-hundredths per cent (7.03%) per annum, until the Company's
obligation with respect to the payment of such principal shall be discharged
as provided in the Indenture hereinafter mentioned.
This bond shall not be entitled to any benefit under the
Indenture or any indenture supplemental thereto, or become valid or
obligatory for any purpose, until the form of certificate of authentication
endorsed hereon shall have been signed by or on behalf of Chemical Bank, the
Trustee under the Indenture, or a successor trustee thereto under the
Indenture, or by an authenticating agent duly appointed by the Trustee in
accordance with the terms of the Indenture.
The provisions of this bond are continued on the reverse
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, Bangor Hydro-Electric Company has caused
this bond to be signed (manually or by facsimile signature) in its name by an
Authorized Executive Officer, as defined in the aforesaid Indenture, and its
corporate seal (or a facsimile thereof) to be hereto affixed and attested
(manually or by facsimile signature) by an Authorized Executive Officer, as
defined in such Indenture, on the date hereof.
Dated ________________
BANGOR HYDRO-ELECTRIC COMPANY,
By
------------------------------
Authorized Executive Officer
ATTEST:
____________________________
Authorized Executive Officer
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds of the series designated therein referred to in
the within-mentioned Indenture.
CHEMICAL BANK,
Trustee
By ------------------------
Authorized Officer
[FORM OF REVERSE OF BOND]
This bond is one of the bonds of the Company (the "Bonds")
issued and to be issued under and secured by a General and Refunding Mortgage
Indenture and Deed of Trust (the "Indenture"), dated as of June 1, 1995,
executed by the Company to Chemical Bank, as Trustee (the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the properties mortgaged and pledged, the nature
and extent of the security, the rights of registered owners of the Bonds and
of the Trustee in respect thereof, and the terms and conditions upon which
the Bonds are, and are to be, secured. The Bonds may be issued in series,
for various principal sums, may mature at different times, may bear interest
at different rates and may otherwise vary as provided in the Indenture. This
Bond is one of a series designated as the "General and Refunding Mortgage
Bonds, Series A" (the "Series A Bonds") of the Company, issued under and
secured by the Indenture and described in the supplemental indenture dated as
of June 15, 1995, between the Company and the Trustee (the "Supplemental
Indenture").
This Bond is issued to the Finance Authority of Maine ("FAME")
to evidence and secure the obligation of the Company to pay the principal of
and interest on a like amount of bonds (the "FAME Bonds") issued under a
Trust Indenture dated as of June 1, 1995 ("FAME Indenture") between FAME and
First Fidelity Bank, as trustee ("FAME Trustee"), pursuant to a Loan
Agreement dated as of June 1, 1995 (the "Loan Agreement") and to secure
Additional Payments (as defined in the Loan Agreement).
To the extent that the Company, pursuant to the Loan
Agreement, furnishes directly to the FAME Trustee at its principal corporate
trust office all funds required for any and all payments of principal of and
interest on the FAME Bonds, such payments shall be deemed to constitute
corresponding payments of interest and installments of principal on this
Series A Bond.
Unless payment then is or has been made pursuant to the next
preceding paragraph, payment of the principal of and interest on this Series
A Bond shall be made in any coin or currency of the United States which at
the time of payment is legal tender for the payment of public and private
debts at the principal corporate trust office of the FAME Trustee, by wire
transfer to the FAME Trustee for the account of FAME in funds immediately
available at said office of the FAME Trustee, in each case on or prior to
11:00 a.m. of the second Business Day preceding the due date for such
payment. Any such payment of principal or interest shall be credited as and
used to make a corresponding payment of principal and interest on the FAME
Bonds.
The Trustee may at any and all times conclusively assume that
the obligations of the Company to make payments with respect to the principal
of and interest on this Series A Bond, so far as such payments shall at the
time have become due, has been fully satisfied and discharged unless and
until the Trustee shall have received a written notice from the FAME Trustee
signed by one of its officers, stating (i) that the Company is in arrears as
to the payments required to be made by it to the FAME Trustee pursuant to the
Loan Agreement and (ii) the amount of the arrearage.
The FAME Trustee, by acceptance of the assignment of this
Series A Bond, agrees that it shall upon the payment or cancellation of a
portion of the principal amount of the FAME Bonds (other than through the
application of funds drawn from the Capital Reserve Fund (as defined in the
Loan Agreement) or otherwise provided directly by FAME (and in each case not
reimbursed by the Company)), deliver to the Company a like principal amount
of Series A Bonds, and shall surrender the remaining Series A Bonds to the
Company upon final payment of the FAME Bonds.
Any notice affecting or relating to the Series A Bonds
required or permitted to be given under the Indenture to Holders may be given
by mailing the same by first class mail, postage prepaid, to the FAME Trustee
and FAME. The certificate of the Trustee that such mailing has been
effective shall be conclusive evidence of compliance with the requirements of
the Supplemental Indenture, whether or not the FAME Trustee or FAME receive
such notice.
The Trustee hereunder shall, by virtue of its office as such
Trustee, be the Registrar and Transfer Agent of the Company for the purpose
of registering and transferring Series A Bonds, and shall maintain a Bond
register for the Series A Bonds.
As more fully described in the Supplemental Indenture, Series
A Bonds shall be redeemed in whole by payment of the principal amount hereof
plus accrued interest hereon, if any, to the date fixed for redemption, upon
receipt by the Trustee of a written advice from the FAME Trustee stating that
the principal amount of all the FAME Bonds then outstanding under the FAME
Indenture has been declared due and payable pursuant to the provisions of
Section 7.03 of the FAME Indenture. This Series A Bond is not otherwise
redeemable prior to maturity.
Principal of the Series A Bonds shall be payable on the
following principal payment dates and in the respective amounts as follows:
Principal
Payment
Dates
(July 1) Amount
--------- -----------
1998 $12,300,000
1999 13,100,000
2000 14,000,000
2001 15,100,000
2002 16,100,000
2003 17,200,000
2004 18,400,000
2005 19,800,000
To the extent permitted by, and as provided in, the Indenture,
modifications or alterations of the Indenture, or of any indenture
supplemental thereto, and of the rights and obligations of the Company and of
the holders of the Bonds may be made with the consent of the Company by an
affirmative vote or consent of the holders of a majority in aggregate
principal amount of the Bonds entitled to vote or consent then outstanding
and by an affirmative vote or consent of the holders of a majority in
aggregate principal amount of the Bonds of all series or tranches of any
series entitled to vote or consent then outstanding and affected by such
modification or alteration, in case one or more but less than all of the
series of Bonds or of any tranche or tranches of any series of Bonds then
outstanding under the Indenture are so affected; provided, however, that
without the consent of the Holder of this bond, no such modification or
alteration shall be made which will affect the terms of payment of the
principal of, or interest or premium, if any, on this bond. Notwithstanding
the foregoing, whenever the vote or the consent of the holder of any Series A
Bond is required, the consent of FAME shall also be required for any such
vote or consent to be given effect.
In case an Event of Default, as defined in the Indenture,
shall occur, the principal of all the Series A Bonds at any such time
outstanding may be declared or may become due and payable, upon the
conditions and in the manner and with the effect provided in the Indenture.
The Indenture provides that such declaration may be rescinded under certain
circumstances.
ARTICLE II.
ISSUE OF SERIES A BONDS.
SECTION 1. The Company hereby exercises the right to obtain
the authentication of $126,000,000 principal amount of Bonds pursuant to the
terms of Section 4.06 of the Indenture. All such Bonds shall be Series A
Bonds.
SECTION 2. Such Series A Bonds may be authenticated and
delivered prior to the filing for recordation of this Supplemental Indenture.
ARTICLE III.
PRINCIPAL PAYMENTS.
Principal of the Series A Bonds shall be payable on the
principal payment dates and in the respective amounts as follows:
Principal
Payment
Dates
(July 1) Amount
--------- -----------
1998 $12,300,000
1999 13,100,000
2000 14,000,000
2001 15,100,000
2002 16,100,000
2003 17,200,000
2004 18,400,000
2005 19,800,000
ARTICLE IV.
REDEMPTION OF THE SERIES A BONDS.
SECTION 1. The Series A Bonds shall be redeemed in whole, by
payment of the principal amount thereof plus accrued interest thereon, if
any, to the date fixed for redemption, upon receipt by the Trustee of a
written advice from the FAME Trustee stating (i) that the principal amount of
all the FAME Bonds then outstanding under the FAME Indenture has been
declared due and payable pursuant to the provisions of Section 7.03 of the
FAME Indenture, specifying the date of the accelerated maturity of such FAME
Bonds and the date from which interest on the FAME Bonds issued under the
FAME Indenture has then accrued, stating such declaration of maturity has not
been annulled and demanding payment of the principal amount of the Series A
Bonds plus accrued interest thereon, if any, to the date fixed for redemption
and (ii) the date fixed for such redemption, and the Trustee hereby waives
any other right to receive a notice of redemption under the Indenture;
provided, however, that the date fixed for such redemption shall be not
earlier than the fifth day and not later than the 45th day after receipt by
the Trustee of such advice. The FAME Trustee, by acceptance of the
assignment of the Series A Bonds, waives notice of such redemption pursuant
to Section 5.04 of the Indenture. The aforementioned notice of redemption
from the FAME Trustee shall become null and void for all purposes hereunder
and the Indenture upon receipt by the Trustee of written notice from the FAME
Trustee of the annulment of the acceleration of the maturity of the FAME
Bonds then outstanding under the FAME Indenture and of the rescission of the
aforesaid written advice prior to the redemption date specified in such
notice of redemption, and thereupon no redemption of the Series A Bonds and
no payment in respect thereof as specified in such notice of redemption shall
be effected or required. But no such annulment or rescission shall extend to
any subsequent written advice from the FAME Trustee or impair any right
consequent on such subsequent written advice.
The Series A Bonds are not otherwise redeemable prior to
maturity.
ARTICLE IV.
THE TRUSTEE.
The Trustee hereby accepts the trusts hereby declared and
provided, and agrees to perform the same upon the terms and conditions in the
Indenture set forth and upon the following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this
Supplemental Indenture or the due execution hereof by the Company
or for or in respect of the recitals contained herein, all of which
recitals are made by the Company solely.
ARTICLE V.
MISCELLANEOUS PROVISIONS.
Section 1. The Company covenants and agrees that it will not
enter into an indenture supplemental to the Indenture which amends this
Supplemental Indenture in any manner that affects the rights of FAME set
forth herein without the written consent of FAME.
Section 2. This Supplemental Indenture may be simultaneously
executed in any number of counterparts, each of which when so executed shall
be deemed to be an original; but such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, said Bangor Hydro-Electric Company has
caused this Supplemental Indenture to be executed on its behalf by an
Authorized Executive Officer as defined in the Indenture, and its corporate
seal to be hereto affixed and said seal and this Supplemental Indenture to be
attested by an Authorized Executive Officer as defined in the Indenture; and
Chemical Bank, in evidence of its acceptance of the trust hereby created, has
caused this Supplemental Indenture to be executed on its behalf by its
President or one of its Vice Presidents and its corporate seal to be hereto
affixed and said seal and this Supplemental Indenture to be attested by its
Secretary or one of its Trust Officers all as of the date first above
written.
BANGOR HYDRO-ELECTRIC COMPANY
By /s/ Robert S. Briggs
--------------------------
[CORPORATE SEAL] President and Chief
Executive Officer
ATTEST:
/s/ Federick S. Samp
- -----------------------
Clerk
CHEMICAL BANK
By /s/ W. B. Dodge
---------------------
[CORPORATE SEAL] Vice President
ATTEST:
/s/ Wanda Eiland
- ---------------------
Trust Officer
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on this 28th day of June, 1995, before
me, the undersigned, Matthew Hilton Frances, a Notary Public within and for
the County and State aforesaid, personally came Robert S. Briggs, President
and Chief Executive Officer, and Frederick S. Samp, Clerk, of Bangor Hydro-
Electric Company, a corporation duly organized, incorporated and existing
under the laws of the State of Maine, who are personally known to me to be
such officers, and who are personally known to me to be the same persons who
executed as such officers the within instrument of writing, and such persons
duly acknowledged that they signed, sealed and delivered the said instrument
as their free and voluntary act as such President and Chief Executive Officer
and Clerk, respectively, and as the free and voluntary act of said Bangor
Hydro-Electric Company for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my official seal on the day and year last above written.
/s/ Matthew H. Frances
--------------------------
Notary Public
#31-5032254
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on this 27th day of June, 1995, before
me, the undersigned Emily Fayan, a Notary Public within and for the County
and State aforesaid, personally came W. B. Dodge, a Vice-President and Wanda
Eiland, a Trust Officer, of Chemical Bank, a corporation organized and
existing under the laws of State of New York, who are personally known to me
to be the same persons who executed as such officers the within instrument of
writing, and such persons duly acknowledged that they signed, sealed and
delivered the said instrument as their free and voluntary act as such Vice-
President and Trust Officer, respectively, and as the free and voluntary act
of Chemical Bank for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my official seal on the day and year last above written.
/s/ Emily Fayan
---------------------------
Notary Public
#24-4737006
[NOTARIAL SEAL]
BANGOR HYDRO-ELECTRIC COMPANY
To
CITIBANK, N.A.,
As Trustee
_____________________________
SUPPLEMENTAL INDENTURE
Dated as of June 29, 1995
______________________________
Re: $115,000,000 First Mortgage Bonds
Collateral Series Due 2000
Supplemental to Mortgage and Deed of Trust
Dated as of July 1, 1936
SUPPLEMENTAL INDENTURE, dated as of June 29, 1995, between BANGOR
HYDRO-ELECTRIC COMPANY, a corporation organized and existing under the laws
of the State of Maine (hereinafter called the "COMPANY"), party of the first
part, CITIBANK, N.A. (successor to City Bank Farmers Trust Company), a
national banking association organized under the laws of the United States of
America, having its corporate trust office at 111 Wall Street, in the Borough
of Manhattan, City and State of New York, as Trustee under the Mortgage and
Deed of Trust hereinafter referred to (hereinafter called the "TRUSTEE"),
party of the second part.
WHEREAS, the Company heretofore executed and delivered to City Bank
Farmers Trust Company, as Trustee, its Mortgage and Deed of Trust dated as of
July 1, 1936 (hereinafter referred to as the "ORIGINAL INDENTURE", and
hereinafter as heretofore supplemented and amended by duly recorded
Indentures supplemental thereto, referred to as the "INDENTURE"); and
WHEREAS, City Bank Farmers Trust Company was converted as of the
close of business on January 30, 1959, into a national banking association
named First National City Trust Company and having its head office at 55 Wall
Street, in the Borough of Manhattan, City, County and State of New York; and
WHEREAS, First National City Trust Company was merged on January
15, 1963 into First National City Bank, a national banking association
incorporated and existing under the laws of the United States of America and
having its head office at 55 Wall Street, in the Borough of Manhattan, City,
County and State of New York and said First National City Bank has succeeded
to First National City Trust Company, as Trustee under the Indenture and is
hereinabove denominated as Trustee; and
WHEREAS, First National City Bank changed its name to Citibank,
N.A., effective March 1, 1976; and
WHEREAS, the Original Indenture was recorded in the following
places in the State of Maine: in Aroostook County Registry of Deeds, Book
444, Page 130; in Hancock County Registry of Deeds, in Book 654, Page 79; in
Penobscot County Registry of Deeds, in Book 1117, Page 3, in Piscataquis
County Registry of Deeds, in Book 257, Page 241, in Washington County
Registry of Deeds, in Book 418, Page 102; in Cumberland County Registry of
Deeds, in Book 3957, Page 1; in Waldo County Registry of Deeds, in Book 786,
Page 119; in the City Clerk's Office for the City of Bangor, in Book 19, Page
304; and in the Rockingham County Registry of Deeds in the State of New
Hampshire, in Book 2351, Page 203; and
WHEREAS, pursuant to the provisions of the Indenture, the Company
duly issued the following First Mortgage Bonds: 3 % Series due 1966 in the
aggregate principal amount of $7,108,000, none of which is now outstanding,
3% Series due 1966 in the aggregate principal amount of $500,000, none of
which is now outstanding; 3% Series due 1975 in the aggregate principal
amount of $5,000,000, none of which is now outstanding; 3% Series due 1977 in
the aggregate principal amount of $2,500,000, none of which is now
outstanding; 2 % Series due 1980 in the aggregate principal amount of
$2,000,000, none of which is now outstanding; 3.25% Series due 1982 in the
aggregate principal amount of $1,000,000, none of which is now outstanding:
3-1/8% Series due 1984 in the aggregate principal amount of $1,000,000, none
of which is now outstanding; 3.25% Series due 1985 in the aggregate principal
amount of $1,500,000, none of which is now outstanding; 4% Series due 1988 in
the aggregate principal amount of $2,500,000, none of which is now
outstanding; 4% Series due 1993 in the aggregate principal amount of
$3,500,000, none of which is now outstanding; 6 % Series due 1998 in the
aggregate principal amount of $2,500,000, all of which are now outstanding;
8.25% Series due 1999 in the aggregate principal amount of $3,500,000, [none]
of which are now outstanding; 10.5% Series due 2000 in the aggregate principal
amount of $5,000,000, none of which is now outstanding; 9.25% Series due 2001
in the aggregate principal amount of $3,000,000, none of which are now
outstanding; 8.60% Series due 2003 in the aggregate principal amount of
$2,500,000, none of which are now outstanding; 10.25% Series due 2004 in the
aggregate principal amount of $7,000,000, none of which is now outstanding;
15.25% Series due 1996 in the aggregate principal amount of $5,000,000, none
of which is now outstanding; 16.50% Series due 1996 in the aggregate
principal amount of $15,000,000, none of which is now outstanding; 12.50%
Series due 1998 in the aggregate principal amount of $19,500,000, none of
which are now outstanding; 17.35% Series due 1994 in the aggregate principal
amount of $11,000,000, none of which are now outstanding; 10.25% Series due
2019 in the aggregate principal amount of $15,000,000, all of which are now
outstanding; 10.25% Series due 2020 in the aggregate principal amount of
$30,000,000, all of which are now outstanding; 8.98% Series due 2022 in the
aggregate principal amount of $20,000,000, all of which are now outstanding;
7.38% Series due 2002 in the aggregate principal amount of $20,000,000, all
of which are now outstanding; 12.25% Series due 2001 in the aggregate
principal amount of $14,316,422, $9,773,040 of which are now outstanding; and
7.30% Series due 2003 in the aggregate principal amount of $15,000,000, all
of which are now outstanding; and
WHEREAS, the Company has determined to create and issue, in the
aggregate principal amount of $115,000,000, another series of Bonds under the
Indenture to be designated "Collateral Series due 2000"; and in order to
establish the terms, provisions and conditions of the Bonds of said series,
the Company has determined to execute this Supplemental Indenture; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid, binding and legal instrument have been
performed and fulfilled and the execution and delivery hereof have in all
respects been duly authorized and all things necessary to make the Bonds of
the Collateral Series due 2000, when authenticated by the Trustee and issued
as in the Indenture and in this Supplemental Indenture provided, the valid,
binding and legal obligations of the Company entitled in all respects to the
security of the Indenture, have been done and performed; and
WHEREAS, the Company and the Trustee deem it desirable to enter
into this Supplemental Indenture;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, that in
consideration of the premises and of the sum of One Dollar in lawful money of
the United States of America to the Company duly paid by the Trustee at or
before the execution and delivery of this Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company hereby covenants and agrees with
the Trustee and its successors in the Trust under the Indenture, as hereby
supplemented by this Supplemental Indenture, for the benefit of those who
shall hold the First Mortgage Bonds, and interest coupons, including the
First Mortgage Bonds, Collateral Series due 2000, or any of them, issued or
to be issued under the Indenture or any Indenture supplemental thereto,
including this Supplemental Indenture, as follows:
Section i. Section 3 of the Original Indenture is hereby
amended by adding the following sentence at the
end of said Section:
"Notwithstanding the foregoing, the First Mortgage Bonds,
Collateral Series due 2000 may be issued as Registered Bonds in the
denomination of $1,000 and multiples of $1,000."
Section ii. Section 11 of the Original Indenture is
hereby further amended by deleting the last
sentence at the end of the first paragraph of
such Section 11, and substituting in its stead:
"Notwithstanding the foregoing, the First Mortgage Bonds, 10.5%
Series due 2000 shall bear interest from November 25, 1975; the First
Mortgage Bonds, 10.25% Series due 2004 shall bear interest from the date
of issuance thereof; the First Mortgage Bonds, 15.25% Series due 1996
shall bear interest from the date of issuance thereof; the First
Mortgage Bonds, 16.50% Series due 1996 shall be dated as of, and shall
bear interest from, July 30, 1981; the First Mortgage Bonds, 12.50%
Series due 1998 shall bear interest from the date of issuance thereof;
the First Mortgage Bonds, 17.35% Series due 1994 shall be dated as of
and shall bear interest from, the date of issuance thereof; the First
Mortgage Bonds, 10.25% Series due 2019 shall be dated and shall bear
interest from, the date of issuance thereof; the First Mortgage Bonds,
10.25% Series due 2020 shall be dated and shall bear interest from, the
date of issuance thereof; the First Mortgage Bonds, 8.98% Series due
2022 shall be dated and shall bear interest from, the date of issuance
thereof; the First Mortgage Bonds, 7.38% Series due 2002 shall be dated
and shall bear interest from, the date of issuance thereof; the First
Mortgage Bonds, 7.30% Series due 2003 shall be dated and shall bear
interest from the date of issuance thereof; and the First Mortgage
Bonds, Collateral Series due 2000 shall be dated the date of issuance
thereof and shall bear interest at a rate of 0%."
Section iii. Section 11 of the Original Indenture is
hereby further amended by adding the following
sentence at the end of the second paragraph:
"Notwithstanding the foregoing, upon the issuance of the First
Mortgage Bonds, Collateral Series due 2000, there shall not be reserved
unissued a Coupon Bond or Bonds of the same series."
Section 4. Pursuant to paragraph (b) of Section 93 of the
Indenture, the Indenture is hereby amended as follows, such amendments to
remain in effect for so long as any Bonds of the Collateral Series due 2000
(as defined in Section 5 hereof) are outstanding:
(a) Section 66 of the Indenture is hereby amended by adding the
following after the word "expressed" in paragraph (a) thereof:
", upon a required redemption"
(b) Section 66 of the Indenture is hereby further amended by adding
the following after the word "notwithstanding" in the language
immediately following paragraph (e) thereof:
"(provided that if any default described in paragraph (d)
or (e) occurs and is continuing, all of the Bonds then
outstanding and the interest accrued thereon, if any, shall
immediately become due and payable without declaration,
presentment, demand or notice of any kind by the Trustee or
any holder of Bonds)"
Section 5. (i) The Company hereby creates a new series of
Bonds to be issued under and secured by the Indenture, as hereby
supplemented, in the aggregate principal amount of $115,000,000, to be
designated as "FIRST MORTGAGE BONDS, COLLATERAL SERIES DUE 2000" (referred
to herein as "BONDS OF THE COLLATERAL SERIES DUE 2000"). The Bonds of said
series shall be payable as to principal on June 30, 2000, and shall not bear
interest. The principal thereof shall be payable in any coin or currency of
the United States of America which at the time of payment shall be legal
tender for public and private debts and shall be payable at the corporate
trust office of the Trustee in the Borough of Manhattan, City and State
of New York.
(ii) Definitive Bonds of the Collateral Series due 2000
shall be issued only as fully Registered Bonds without coupons. The
definitive Registered Bonds without coupons shall be issuable in
denominations of $1,000, and any integral multiple of $1,000 approved by
the Company, such approval to be evidenced by the execution thereof. The
several authorized denominations of Registered Bonds without coupons of said
series shall be interchangeable in like aggregate principal amounts.
(iii) The Bonds of the Collateral Series due 2000 are
initially issued to the Administrative Agent (as defined below) pursuant to
the terms of that certain Bond Pledge and Security Agreement, dated as of
June 30, 1995, between the Company and the Administrative Agent (the "Pledge
Agreement"), to secure the obligations of the Company (described in the
Pledge Agreement) under a Credit Agreement, dated as of June 30, 1995, among
the Company, the Banks named therein, the Co-Agents named therein and
Chemical Bank, as administrative agent (in such capacity, together with any
successor, the "Administrative Agent") (as amended from time to time, the
"Credit Agreement"). To the extent that scheduled installment payments are
made in respect of the term loans under the Credit Agreement, such payments
shall constitute a credit against the payment obligations of the Company
with respect to the Bonds of the Collateral Series due 2000 held by the
Administrative Agent under the Pledge Agreement (the "Administrative Agent")
or its transferees, provided that the making of any such payment shall not
constitute a credit (i) in respect of Bonds of the Collateral Series due 2000
registered in the name of the Administrative Agent while any Default or Event
of Default (as defined in the Credit Agreement) has occurred and is
continuing under the Credit Agreement after giving effect to such payment, or
(ii) to the extent a principal amount of Bonds of the Collateral Series due
2000 equal to the amount of any such payment is assigned by the Administrative
Agent to the G&R Trustee (as defined below) as required by the Pledge
Agreement.
If any of the Bonds of the Collateral Series due 2000 are assigned
by the Administrative Agent to the trustee (the "G&R Trustee") under the
General and Refunding Mortgage Indenture and Deed of Trust, dated as of June
1, 1995 between the Company and Chemical Bank, as trustee (the "General and
Refunding Mortgage"), as contemplated by the Pledge Agreement, no payments
shall be required to be made in respect of the Bonds of the Collateral Series
due 2000 so assigned unless and until (i) all Bonds of the Collateral Series
due 2000 become or are declared to be due and payable pursuant to Section 66
of the Indenture, or (ii) demand for redemption of such Bonds is made by the
G&R Trustee as provided in subsection (d) below.
The Trustee may at any and all times conclusively assume that the
obligations of the Company to make payments with respect to the Bonds of the
Collateral Series due 2000, so far as such payments shall at the time have
become due, have been fully satisfied and discharged unless and until (i) all
Bonds of the Collateral Series due 2000 become or are declared to be due and
payable pursuant to Section 66 of the Indenture, (ii) the Trustee shall have
received a written notice from the Administrative Agent signed by one of its
officers stating that the indebtedness of the Company has become, or has been
declared to be, due and payable pursuant to the Credit Agreement and
demanding redemption of such Bonds as provided in subsection (d) of this
Section, or (iii) the Trustee shall have received the notice described in
such subsection (d) from the G&R Trustee in the event any Bonds of the
Collateral Series due 2000 are assigned to the G&R Trustee (and the Trustee
has received written notice thereof).
(iv) The Bonds of the Collateral Series due 2000 are not redeemable at
the option of the Company at any time prior to maturity and are not redeemable
by the operation of the General Reserve Fund provisions of the Indenture or by
the use of proceeds of released Property.So long as the Bonds of the Collateral
Series due 2000 are registered in the name of the Administrative Agent, such
Bonds shall immediately be redeemed by the Company in whole, by payment of 100%
of the outstanding principal amount thereof, on the date of receipt by the
Trustee and the Company of a written notice (the "Acceleration Notice") from
the Administrative Agent stating that the indebtedness of the Company has
become, or has been declared to be, due and payable pursuant to the Credit
Agreement. Each of the Administrative Agent and the Trustee hereby waives any
other right to receive notices of redemption pursuant to Article Eighth of
Indenture. If any Bonds of the Collateral Series due 2000 are assigned by the
Administrative Agent to the G&R Trustee (and written notice thereof is received
by the Trustee), as contemplated by the Pledge Agreement, such Bonds as are so
assigned shall be subject to redemption by the Company at the option of the G&R
Trustee as the holder thereof, by payment of 100% of the principal amount
thereof, on the date of receipt by the Trustee of a written notice from the G&R
Trustee stating that the indebtedness of the Company under the General and
Refunding Mortgage has become, or has been declared to be, due and payable.
So long as the Administrative Agent is the registered holder of any Bonds of
the Collateral Series due 2000, receipt by the Trustee of any such notice
and demand for redemption from the G&R Trustee shall be deemed also to
constitute an Acceleration Notice with respect to any such Bonds held by the
Administrative Agent.
The Bonds of the Collateral Series due 2000 and the Trustee's
certificate to be endorsed on such Bonds, shall be substantially in the
following form:
(FORM OF BOND)
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND SUCH SECURITY MAY NOT BE TRANSFERRED WITHOUT
COMPLIANCE WITH APPLICABLE SECURITIES LAWS.
No. R- $__________
BANGOR HYDRO-ELECTRIC COMPANY
FIRST MORTGAGE BOND
Collateral Series Due 2000
Due June 30, 2000
BANGOR HYDRO-ELECTRIC COMPANY, a corporation organized and existing
under the laws of the State of Maine (hereinafter called the "COMPANY"), for
value received, hereby promises to pay to
______________________________________________
or registered assigns, the principal sum of
__________________________________ DOLLARS ($_________)
on June 30, 2000 upon presentation and surrender hereof to the Trustee. This
bond shall not bear interest.
The principal of this Bond is payable in any coin or currency of
the United States of America which at the time of payment shall be legal
tender for public and private debts, at the corporate trust office of the
Trustee hereinafter named, in the Borough of Manhattan, City and State of New
York.
This Bond is one of a duly authorized issue of First Mortgage Bonds
of the Company, issuable in series and in fully registered form without
interest coupons, and is one of a series designated as "COLLATERAL SERIES DUE
2000", all of which Bonds of whatever series are issued and to be issued
under and, irrespective of the time of issue, are equally secured by a
certain Mortgage and Deed of Trust dated as of July 1, 1936, executed by the
Company to City Bank Farmers Trust Company (of which Citibank, N.A., a
national banking association, is the successor), as Trustee, and all
indentures amendatory thereto and supplemental thereto (all collectively
herein called the "INDENTURE"), to which reference is hereby made for a
description of the properties mortgaged, the nature and extent of the
security, the rights of the holders of the Bonds with respect to such
security and the terms and conditions upon which the Bonds are secured.
In the manner provided in the Indenture, the rights and obligations
of the Company and of the holders of the Bonds may be changed and modified at
any time upon the consent and approval of the holders of 66-2/3% in aggregate
principal amount of the Bonds then outstanding affected by such change or
modification; PROVIDED, HOWEVER, that no such change or modification shall
(a) alter or impair the obligation of the Company to pay the principal of and
interest, if any, on any Bond at the time and place and at the rate and in
the currency provided therein, without the consent of the holder of such
Bond, or (b) permit the creation by the Company of any mortgage, or lien in
the nature of a mortgage, or security interest ranking prior to or PARI PASSU
with the lien of and security interest created by the Indenture, except as in
the Indenture otherwise provided, or (c) permit the reduction of the
percentage of outstanding Bonds affected required for any such change or
modification.
Bonds of this Series are not redeemable at the option of the
Company at any time prior to Maturity and are not redeemable by the operation
of the General Reserve Fund provisions of the Indenture or by the use of
proceeds of released Property. The Bonds of this Series are subject to
mandatory redemption as provided in the supplemental indenture, dated as of
June 29, 1995, establishing such Series.
In case a default, as defined in the Indenture, shall occur, the
principal of all of the Bonds of each and every series issued and outstanding
thereunder may be declared or may become due and payable before maturity in
the manner and with the effect provided in the Indenture.
Subject to compliance with applicable securities laws, this Bond is
transferable by the registered owner in person or by a duly authorized
attorney at the corporate trust office of the Trustee in the Borough of
Manhattan, City and State of New York, upon the surrender and cancellation of
this Bond, and thereupon a registered Bond of this series will be issued to
the transferee in exchange therefor, as provided in the Indenture, and on
payment, if the Company shall so require, of the charge therein provided for.
Bonds of the Collateral Series due 2000 are issuable in the
denominations of $1,000 and any integral multiple of $1,000 approved by the
Company, such approval to be evidenced by the execution thereof. In the
manner prescribed in the Indenture, any registered Bond of such series may be
exchanged for a like aggregate principal amount of registered Bonds of such
series of other authorized denominations.
No recourse shall be had for the payment of any part of the
principal of this Bond, or for any claim based hereon, or for the
consequences of any default in the payment hereof, or otherwise in any manner
in respect hereof or in respect of the Indenture or of the indebtedness
represented hereby, to or against any incorporator, stockholder, officer or
director, past, present or future, of the Company or of any predecessor or
successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any statute or
constitutional provision or rule of law, or by the enforcement of any
assessment or penalty or otherwise, or in any manner; all such liability, by
the acceptance hereof, and as part of the consideration for the issue hereof,
being expressly released, as provided in the Indenture.
This Bond shall not be obligatory or valid for any purpose until
authenticated by the execution by the Trustee of the certificate endorsed
hereon.
IN WITNESS WHEREOF, the Company has caused this Bond to be signed
by its President or one of its Vice Presidents and impressed or imprinted
with its corporate seal or a facsimile thereof, attested by its Treasurer or
an Assistant Treasurer, as of June __, 1995.
BANGOR HYDRO-ELECTRIC COMPANY
By_______________________________
Its President
[SEAL]
ATTEST:
By________________________
Its Treasurer
(FORM OF TRUSTEE'S CERTIFICATE)
TRUSTEE'S AUTHENTICATION CERTIFICATE
This is one of the Bonds of the series designated therein,
described in the within-mentioned Mortgage and Deed of Trust.
CITIBANK, N.A., as Trustee,
By______________________________
Its Authorized Officer
Section 6. The Trustee accepts the trusts created by this
Supplemental Indenture upon the terms and conditions hereof and of the
Indenture. All covenants and provisions of the Indenture shall continue in
full force and effect, as this Supplemental Indenture shall form part of the
Indenture. Except as herein otherwise expressly provided, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture, other than
as set forth in the Indenture. The Trustee shall not be responsible for the
recitals herein or in the Bonds, all of which are made by the Company solely.
Section 7. This Supplemental Indenture may be executed in any
number of counterparts, each of which, if so executed, shall be deemed to be
an original; and all such counterparts shall together constitute but one and
the same instrument
IN WITNESS WHEREOF, Bangor Hydro-Electric Company has caused this
Supplemental Indenture to be executed on its behalf by its President or one
of its Vice Presidents and its corporate seal to be hereto affixed and
attested by its Clerk; and Citibank, N.A., as Trustee as aforesaid, has
caused this Supplemental Indenture to be executed on its behalf by one of its
Vice Presidents and its corporate seal to be hereto affixed and attested by
an Assistant Vice President, all as of the day and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY
WITNESS /s/ Jeffrey M. Maddox By /s/ Robert S. Briggs
------------------------ ------------------------
Its President
ATTEST /s/ Frederick S. Samp
------------------------
Its Clerk
CITIBANK, N.A., as Trustee
as aforesaid,
WITNESS /s/ Reynaldo Duma By /s/ R.T. Kirchner
--------------------- ---------------------
Its Vice President
ATTEST /s/ Carol Ng
----------------------
Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On June 28, 1995 before me personally appeared the above-named R.T.
Kirchner, a Vice President, and Carol Ng, an Assistant Vice President, of
Citibank, N.A., the national banking institution that executed the within and
foregoing instrument as Trustee, and severally acknowledged said instrument
to be their free act and deed in their said capacities and the free act and
deed of the said national banking institution, as such Trustee.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on the day
and year first above mentioned.
/s/ Peter M. Pavlyshin
-------------------------
Notary Public
#41-4991297
My Commission expires January 27, 1996
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On June 28, 1995 before me personally appeared the above-named
ROBERT S. BRIGGS, a PRESIDENT, and FREDERICK S. SAMP, a CLERK, of Bangor
Hydro-Electric Company, the corporation that executed the within and
foregoing instrument, and severally acknowledged said instrument to be their
free act and deed in their said capacities and the free act and deed of the
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
the day and year first above mentioned.
/s/ Matthew H. Frances
-------------------------
Notary Public
31-5032254
My Commission expires August 22, 1996
[NOTARIAL SEAL]
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of this 31st day of March, 1995 by and between BABCOCK-ULTRAPOWER
JONESBORO, a joint venture formed as a California general partnership
("Seller"), and BANGOR HYDRO-ELECTRIC COMPANY, a Maine corporation ("Buyer").
RECITALS
WHEREAS, Seller is the owner of a 24.5 MW wood-fired small power
production facility located in Jonesboro, Maine (the "Facility");
WHEREAS, pursuant to a Power Purchase Agreement dated as of August
13, 1984 (as amended to date, the "Power Purchase Agreement") between Buyer
and Seller, Buyer has committed to purchase the electric output of the
Facility for a term and under such conditions as are set forth therein;
WHEREAS, Buyer, based upon its examination and analysis, believes
that it is acquiring the ability to achieve substantial net present value
savings for its customers by reducing its overall cost of purchased power if
it acquires all right, title and interest of Seller in and to the Power
Purchase Agreement on the terms and conditions set forth herein, and that
consummation of the transactions described herein is in the best interests of
Buyer and its customers; and
WHEREAS, Seller is willing to sell to Buyer all of its right, title
and interest in and to the Power Purchase Agreement on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and covenants contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller, intending to be legally bound, hereby agree
as follows:
ARTICLE 1
PURCHASE AND SALE; CLOSING
1.1 PURCHASE AND SALE. Subject to the terms and conditions set
forth herein, Seller agrees to sell, assign, transfer, convey and deliver to
Buyer on the Closing Date (as hereinafter defined), and Buyer agrees to
purchase from Seller on the Closing Date, all right, title and interest of
Seller in and to the Power Purchase Agreement.
1.2 PURCHASE PRICE; PAYMENTS AT CLOSING. (a) In consideration
for the purchase referred to in Section 1.1 above, Buyer shall on the Closing
Date pay to Seller (i) the amount of $41,500,000 in cash in immediately
available funds and (ii) the principal amount of Loans to be outstanding as
of the Escrow Release Date (as hereinafter defined) (subject to the
adjustment described in Section 1.2(b) below) in immediately available funds,
as specified in the notice delivered pursuant to Section 1.2(c) below (such
amounts described in clauses (i) and (ii) of this Section 1.2(a) being
hereinafter referred to collectively as the "Purchase Price") and (iii) the
amounts described in Section 1.4(a) hereof.
(b) If the Escrow Release Date does not occur on an Installment
Payment Date (as hereinafter defined), the aggregate amount payable pursuant
to Section 1.2(a)(ii) above shall be reduced by (i) the principal amount of
the installment of Loans scheduled to be repaid on the following Installment
Payment Date pursuant to Section 2.4(a)(i) (regularly scheduled payments) and
Section 2.4(b) (accelerated prepayments) of the Loan Agreement (as
hereinafter defined), multiplied by (ii) a fraction equal to the number of
days from and including the previous Installment Payment Date to but not
including the Escrow Release Date divided by the number of days from and
including the previous Installment Payment Date to but not including the
following Installment Payment Date.
(c) The aggregate amount of any payment pursuant to Section
1.2(a)(ii) above shall be equal to the amount set forth in the certificate
delivered by Seller to Buyer pursuant to Section 1.6(x) below. Except as
expressly provided in Section 1.2 (a)(ii) and Section 6.1 of this Agreement,
Seller shall pay all other amounts due and payable under the Loan Agreement
and the Security Documents.
(d) The terms "Agent", "Banks", "Loans", and "Installment Payment
Date" shall have the meanings set forth in the Amended and Restated
Construction and Term Loan Agreement dated as of October 1, 1989 (as amended
to date, the "Loan Agreement") among Seller, the Banks party thereto and The
Bank of New York, as Agent.
1.3 CLOSING DATE. (a) The consummation of the purchase referred
to in Section 1.1 above and the payments set forth in Section 1.2(a) hereof
(the "Closing") shall occur on June 9, 1995 at 10:00 a.m. (New York time), at
the offices of White & Case, 1155 Avenue of the Americas, New York, New York
10036 or at such other time, not later than September 15, 1995, as Buyer may
determine in accordance with this Section 1.3 (the "Closing Date") or such
other place as Seller and Buyer may agree upon. Buyer may select such other
Closing Date, not later than September 15, 1995, as Buyer may determine
provided that such other Closing Date shall be a date not more than five nor
less than four Eurodollar Business Days (as defined in the Loan Agreement)
prior to the date on which the Loans may be prepaid in full pursuant to the
Loan Agreement (unless the Agent otherwise agrees in writing to the
prepayment of the Loans other than as set forth in the Loan Agreement).
Buyer shall provide Seller not less than thirty days prior written notice of
such other Closing Date. In the event Buyer is unable to consummate the
purchase referred to in Section 1.1 on such Closing Date, Buyer may select
another Closing Date (determined in accordance with this paragraph and which,
without the consent of Seller, shall be not less than thirty days following
the applicable Closing Date) by written notice to Seller given not less than
five Eurodollar Business Days prior to the then applicable Closing Date. In
the event that the Closing Date is extended beyond June 9, 1995, Seller
agrees to select only thirty-day Interest Periods (as defined in the Loan
Agreement) with respect to the Loans. Seller agrees not to amend the Loan
Agreement in any manner that would increase the costs payable by Buyer
hereunder or otherwise materially and adversely affect the obligations of
Buyer to Seller under this Agreement.
(b) Concurrently with the consummation of the Closing, Seller
shall provide notice to the Agent and the Banks in accordance with the Loan
Agreement of the prepayment of the Loans in full on the Escrow Release Date.
1.4 OTHER PAYMENTS AT CLOSING.
(a) In addition to the payments required pursuant to Section
1.2(a)(i) and (ii), Buyer shall pay to Seller (or at the direction of Seller
to the applicable third parties or counterparties) on the Closing Date in
cash in immediately available funds an amount equal in the aggregate to:
(i) (x) the book inventory value of, and (y) unless Buyer has
delivered its written undertaking pursuant to Section 1.8 below, all of
Seller's projected disposal costs associated with, the fuel located at
the Facility on the Closing Date (excluding any such fuel which Seller
intends to combust in order to satisfy a power sales commitment to a
third party commencing within thirty days of the Closing Date), as set
forth in the certificate delivered by Seller pursuant to Section
1.6(viii) below; provided that Buyer will not be responsible under this
Section 1.4(a)(i) for the inventory value of any fuel in excess of the
equivalent of 9,104 bone dry short tons or the disposal of any fuel in
excess of the equivalent of 10,014 bone dry short tons;
(ii) undisputed amounts payable by Buyer to Seller under and in
accordance with the Power Purchase Agreement which will have accrued as
of the Escrow Release Date less interest accrued from, and including,
the Closing Date to, but excluding, the Escrow Release Date (the "Escrow
Interest") on all indebtedness incurred by Buyer to fund the Purchase
Price and the amounts payable pursuant to Section 1.4(a)(iii) (the
"Escrow Debt"); provided that Buyer shall have notified Seller in
writing of any amounts disputed in good faith under the Power Purchase
Agreement and its reasons for such dispute at least one business day
(which, for the purposes of this Agreement, shall mean any day other
than a Saturday, Sunday or other day on which banks in New York City or
the State of Maine are authorized or required by law to close) prior to
the Closing Date;
(iii) amounts payable to Seller's counterparties as a result of the
termination as of the Escrow Release Date of the interest rate swap
agreements entered into by Seller in respect of the Loans, as set forth
in the certificate delivered by Seller pursuant to Section 1.6(ix)
below;
(iv) amounts reimbursable by Buyer pursuant to Section 6.1 hereof
with respect to which Seller has provided invoices, and such supporting
documentation as shall be reasonably available to Seller, to Buyer at
least two business days prior to the Closing Date; and
(v) Seller's aggregate projected costs in respect of employee
retraining and employee retention, as set forth in the certificate
delivered by Seller pursuant to Section 1.6(viii) below, which together
with the costs described in Section 1.4(a)(v) of the West Enfield
Purchase Agreement (as hereinafter defined) shall not exceed $265,000 in
the aggregate.
(b) The amounts payable on the Closing Date in respect of Sections
1.4(a)(i) and (v) above shall be as set forth in the certificate delivered by
Seller to Buyer pursuant to Section 1.6(viii) below, and, with respect to
amounts payable under Sections 1.4(a)(i)(y) and 1.4(a)(v), shall be subject
to adjustment as provided in Section 1.7 below. The amounts payable on the
Closing Date in respect of the Power Purchase Agreement under Section
1.4(a)(ii) above shall be determined in accordance with the provisions of the
Power Purchase Agreement, shall be based, as provided therein, upon a reading
of the Facility's meters on the Closing Date and shall be subject to
adjustment for the period between the Closing Date and the Escrow Release
Date as provided in Section 1.7 below based upon a reading of the Facility's
meters on the Escrow Release Date.
1.5 DELIVERIES BY BUYER ON THE CLOSING DATE. On the Closing Date,
Buyer shall deliver to Seller the following (provided that a completed draft
(which may include estimates, as appropriate) of the document described in
subsection (viii) shall be delivered to Seller at least four business days
prior to the Closing Date):
(i) an executed assignment, substantially in the form of Exhibit A
hereto (the "Assignment");
(ii) a copy, certified as of the Closing Date by the Secretary of
Buyer, of the resolutions of its Board of Directors, authorizing the
execution, delivery and performance by it of this Agreement and the
transactions contemplated hereby;
(iii) a certificate, dated as of the Closing Date and signed by the
Secretary of Buyer, as to the incumbency of the officers of Buyer
signing this Agreement and any document or agreement which is to be
signed by Buyer in connection with the Closing;
(iv) a certificate, dated as of the Closing Date and signed by an
officer of Buyer, on behalf of Buyer, to the effect that each of the
representations and warranties of Buyer made in this Agreement are true
and correct in all material respects on the Closing Date;
(v) a Certificate of Good Standing of recent date for Buyer,
issued by the appropriate authority in the State of Maine;
(vi) an opinion of counsel to Buyer in substantially the form of
Exhibit B hereto;
(vii) all other documents, instruments and certificates reasonably
required by Seller or its counsel to consummate the transactions
contemplated hereby; and
(viii) a certificate, dated the Closing Date, setting forth the
amount of the Escrow Debt to be incurred by Buyer and the rate and
amount of the Escrow Interest.
1.6 DELIVERIES BY SELLER ON THE CLOSING DATE . At the Closing,
Seller shall deliver to Buyer the following (provided that completed drafts
(which may include estimates, as appropriate) of the documents described in
subsections (viii), (ix) and (x) shall be delivered to Buyer at least three
business days prior to the Closing Date):
(i) an executed Assignment;
(ii) a copy, certified as of the Closing Date by the Secretary or
an Assistant Secretary of each partner of Seller, of the resolutions of
the Board of Directors of such partner, authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby;
(iii) a certificate, dated as of the Closing Date and signed by the
Secretary or an Assistant Secretary of each partner of Seller, as to the
incumbency of the officers of such partner signing this Agreement and
any document or agreement which is to be signed by such partner in
connection with the Closing;
(iv) a certificate, dated as of the Closing Date and signed by an
officer of each partner of Seller, on behalf of such partner, to the
effect that each of the representations and warranties of Seller made in
this Agreement, insofar as concerns such partner, and, to the best of
such partner's knowledge, insofar as concerns Seller, are true and
correct in all material respects on the Closing Date;
(v) a Certificate of Good Standing of recent date for each partner
of Seller, issued by the appropriate authority in its jurisdiction of
incorporation;
(vi) opinions of counsel to the Seller and of counsel to each
partner of Seller substantially to the effect set forth in Exhibit C
hereto;
(vii) all other documents, instruments and certificates reasonably
required by Buyer or its counsel to consummate the transactions
contemplated hereby;
(viii) a certificate, which shall set forth (A) the amounts payable
under Section 1.4(a)(i)(x), (B) a good faith estimate by Seller as of
the Closing Date of the amounts to be paid to Seller by Buyer pursuant
to Sections 1.4(a)(i)(y) and 1.4(a)(v) above and (C) the amounts to be
paid to Seller by Buyer pursuant to Section 1.4(a)(ii) above, in each
case together with supporting data in reasonable detail and such
supporting documentation as may be reasonably available to Seller;
(ix) a certificate showing the amounts to be paid to Seller by
Buyer on the Closing Date pursuant to Section 1.4(a)(iii) above,
together with supporting data in reasonable detail and such supporting
documentation as may be reasonably available to Seller; and
(x) a certificate, dated as of the Closing Date, setting forth the
aggregate amount of any payment to be made by Buyer as required pursuant
to Section 1.2(a)(ii).
1.7 POST-CLOSING ADJUSTMENTS. (a) On or prior to the fifth
business day after the Escrow Release Date, Seller shall make a final
determination of the amounts payable by Buyer under the Power Purchase
Agreement in accordance with the second sentence of Section 1.4(b) for the
period between the Closing Date and the Escrow Release Date and shall deliver
to Buyer a certificate setting forth such amounts and all calculations in
reasonable detail necessary to support such amounts. Within two business
days following delivery of such certificate, Buyer shall pay Seller in cash
in immediately available funds the amount set forth in such certificate.
(b) If Buyer has not delivered its written undertaking pursuant to
Section 1.8 below, then on the forty-fifth day following the Escrow Release
Date (or the first business day thereafter if such forty-fifth day is not a
business day) or such later date as Seller shall determine if the effect of
such delay is to reduce the amounts which may be payable by Buyer as
hereinafter determined, Seller shall make a final determination of the
amounts payable by Buyer pursuant to Section 1.4(a)(i)(y) above and shall
deliver to Buyer a certificate setting forth such amounts and all
calculations and documentation in reasonable detail necessary to support such
amounts. Within two business days following delivery of such certificate,
Seller shall pay Buyer in cash in immediately available funds (or Buyer shall
pay Seller, as applicable) the difference between the aggregate amount set
forth in such certificate and the aggregate amount paid by Buyer to Seller on
the Closing Date pursuant to Section 1.4(a)(i)(y).
(c) If Buyer has delivered its written undertaking pursuant to
Section 1.8 below, during the period for disposal to be specified in the
undertaking referred to in Section 1.8 below, Seller shall cooperate with
Buyer to permit Buyer reasonable access to the Facility, and, to the extent
available as reasonably determined by Seller, the assistance of Facility
personnel in order for Buyer to conduct the disposal of the fuel in
accordance with such undertaking.
(d) On the six-month anniversary of the Escrow Release Date (or
the first business day thereafter if such six-month anniversary is not a
business day), Seller shall make a final determination of the amount payable
by Buyer pursuant to Section 1.4(a)(v) above and shall deliver to Buyer a
certificate setting forth such amount and all calculations and documentation
in reasonable detail necessary to support them. Within two business days
following delivery of such certificate, Seller shall pay Buyer in cash in
immediately available funds (or Buyer shall pay Seller, as applicable) the
difference between the amount set forth in such certificate and the amount
paid by Buyer to Seller on the Closing Date pursuant to Section 1.4(a)(v),
provided that the payments by Buyer pursuant to such Section 1.4(a)(v) and
this Section 1.7(d), together with the payments by Buyer pursuant to Section
1.4(a)(v) and Section 1.7(d) of the West Enfield Purchase Agreement, shall in
no event exceed $265,000 in the aggregate.
1.8 FUEL DISPOSAL ELECTION. Not later than May 15, 1995, Seller
shall provide Buyer a summary of the terms and conditions to be applicable to
any undertaking by Buyer to dispose of the fuel described in Section
1.4(a)(i). If Buyer wishes to undertake such disposal, Buyer shall negotiate
with and deliver to Seller no later than May 23, 1995 a written undertaking
to such effect substantially on the terms and conditions provided by and
otherwise in form and substance reasonably acceptable to Seller.
1.9 DELIVERIES BY SELLER ON THE UNDERWRITING DATE. In the event
Buyer shall finance all or a portion of the Purchase Price with an offering
of debt securities, Seller shall deliver to Buyer the following not later
than 12:01 p.m., prevailing New York time, on the date Buyer proposes to
execute and deliver a purchase contract with respect to such securities (the
"Underwriting Date"); provided that Buyer shall have given Seller five
business days prior written notice of such Underwriting Date:
(i) a certificate, dated as of the Underwriting Date and signed by
an officer of each partner of Seller, on behalf of such partner, to the
effect that each of the representations and warranties of Seller made in
this Agreement, insofar as concerns such partner, and, to the best of
such partner's knowledge, insofar as concerns Seller, are true and
correct in all material respects on the Underwriting Date;
(ii) an amendment to Schedule 6.3(b), if required, setting forth
any additional claims of Seller under the Power Purchase Agreement
arising from the Effective Date (as hereinafter defined) of this
Agreement to the Underwriting Date which shall survive the consummation
of the sale described in Section 1.1 hereof in accordance with Section
6.3(b) of this Agreement; and
(iii) evidence satisfactory to Buyer that the releases and
discharges described in Section 3.3 hereof shall have been delivered to
the Escrow Agent under the Escrow Agreement hereinafter described.
1.10 ESCROW AGREEMENT. Seller and Buyer agree to execute and
deliver, on or prior to the Underwriting Date, the Escrow Agreement
hereinafter referred to in form and substance reasonably satisfactory to both
Seller and Buyer with an escrow agent reasonably satisfactory to both Seller
and Buyer.
ARTICLE 2
CONDITIONS TO BUYER'S OBLIGATIONS
The obligation of Buyer to consummate the Closing on the Closing
Date is subject to the satisfaction (or waiver by Buyer), on or before the
Closing Date, of each of the conditions set forth below. Each document
required to be delivered on the Closing Date pursuant to this Article 2 shall
be delivered in escrow pursuant to an escrow agreement (the "Escrow
Agreement") which shall provide for the release of all such documents on the
first date after the Closing Date on which the Loans may be prepaid in full
pursuant to the Loan Agreement (the "Escrow Release Date").
2.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Seller contained herein and in all certificates and other
documents and agreements delivered by Seller to Buyer pursuant hereto or in
connection with the transactions contemplated hereby shall be true and
accurate in all material respects as of the date hereof and as of the Closing
Date.
2.2 PERFORMANCE. Seller shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it and shall have
delivered all items required to be delivered pursuant to Section 1.6 by it on
or prior to the Closing Date.
2.3 FINANCING. Buyer shall have obtained the financing, on terms
reasonably satisfactory to Buyer, necessary to pay the Purchase Price and the
payments set forth in Section 1.4(a) above (other than Section 1.4(a)(ii)) on
the Closing Date, which financing shall have been approved by the Maine
Public Utilities Commission ("MPUC") on terms and conditions reasonably
satisfactory to Buyer.
2.4 CONSENTS. Buyer shall have obtained, on terms reasonably
satisfactory to Buyer, any required consents of its lenders under its
revolving credit borrowing arrangements.
2.5 OTHER MPUC APPROVALS. (a) Buyer shall have obtained such
orders or decrees of the MPUC as may be necessary in order to establish the
costs of its performance under this Agreement as assets under generally
accepted accounting principles and to recover such costs and amortize such
assets through rates to customers over such period or periods as may be
reasonably acceptable to Buyer and (b) Buyer shall, at its option, have
secured a certificate of approval for an electric rate stabilization
agreement pursuant to 35-A Me. Rev. Stat. Ann. Secion 3156.
2.6 UNITIL AGREEMENT. The agreement between Buyer and UNITIL
Power Corp. ("UNITIL") amending that portion of the Power Sales Agreement
(the "UNITIL Agreement") between Buyer and UNITIL dated as of March 26, 1986
relating to the resale of energy and capacity from the Facility shall have
been approved by the Federal Energy Regulatory Commission.
2.7 NO LITIGATION. No litigation whose subject matter relates to
any of the transactions contemplated by this Agreement shall be pending or
threatened before any court or regulatory agency the outcome of which, in the
reasonable opinion of Buyer, could materially adversely affect the ability of
Buyer to consummate such transactions or to recover the payments made to
Seller in its rates.
2.8 WEST ENFIELD. On the Closing Date, there shall have been
consummated in accordance with the agreement of even date herewith (the "West
Enfield Purchase Agreement") between Buyer and Babcock-Ultrapower West
Enfield, a joint venture organized under the laws of California, the sale to
the Buyer of all right, title and interest of Babcock-Ultrapower West Enfield
in and to the Power Purchase Agreement, dated as of August 13, 1984, as
amended to date, regarding the wood-fired small power production facility
located in West Enfield, Maine.
2.9 SCHEDULE 6.3(B). Any claims under the Power Purchase Agreement
which Seller shall have proposed to add to Schedule 6.3(b) after the
Underwriting Date shall be reasonably satisfactory to Buyer.
ARTICLE 3
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to consummate the Closing on the Closing
Date is subject to the satisfaction (or waiver by Seller), on or before the
Closing Date, of each of the conditions set forth below. Each document
required to be delivered on the Closing Date pursuant to this Article 3 and
each payment to be made on the Closing Date pursuant to Article 1.2(a) shall
be delivered or made, as the case may be, in escrow pursuant to the Escrow
Agreement which shall provide for the release of all such documents and such
payments on the Escrow Release Date and which shall also provide that any
interest earned on amounts held pursuant to the Escrow Agreement shall be
paid to Seller on the Escrow Release Date.
3.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Buyer contained herein and in all certificates, agreements and
other documents delivered by Buyer to Seller pursuant hereto or in connection
with the transactions contemplated herein shall be true and accurate in all
material respects as of the date hereof and as of the Closing Date.
3.2 PERFORMANCE. Buyer shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it including, without
limitation, payment of the Purchase Price and the payments set forth in
Section 1.4(a) above and shall have delivered all items required to be
delivered pursuant to Section 1.5 by it on or prior to the Closing Date.
3.3 TERMINATION AND RELEASE. (a) Seller shall have received a
release and discharge executed by the Agent and (if necessary) the Banks,
reasonably satisfactory in form and substance to Seller, whereby Seller is
released from and discharged of its obligations under the Loan Agreement, the
Security Documents and the Notes (each as defined in the Loan Agreement), and
such release and discharge shall provide that the Agent and the Banks shall
have released to Seller and otherwise discharged all mortgages, liens,
security interests and encumbrances on any property of the Seller whatsoever
(including without limitation, permits, goods, equipment, intangibles and
deposit accounts) entered into or obtained by the Agent and the Banks in
connection with Seller's obligations under the Loan Agreement, the Security
Documents and the Notes.
(b) On the Closing Date, Seller shall have received satisfactory
assurances of payment in cash in immediately available funds on the Escrow
Release Date of an amount equal to the balance to be on deposit on the Escrow
Release Date, and all accrued interest thereon, in accounts held as cash
collateral and/or reserve accounts in connection with the Loan Agreement
and/or the Security Documents.
3.4 TRANSMISSION AGREEMENT. Seller and Buyer shall have entered
into an agreement on terms and conditions reasonably satisfactory to Seller
for the transmission of power generated at the Facility from the Facility to
points at which Buyer's transmission system interconnects with the
transmission system of other electric utilities for the purpose of enabling
Seller (or any successor owner or user of the Facility) to compete for the
sale of capacity and energy to other utilities in the bulk power supply
market, or (except to the extent such restriction is prohibited by law) to
entities that are not retail customers of Buyer. Such agreement shall
provide for such transmission services at non-discriminatory rates
customarily available among electric utilities. To the extent that the
approval of the Federal Energy Regulatory Commission or other governmental
agency is required as a condition to the effectiveness of such agreement, at
Seller's request and upon payment by Seller to Buyer of any required filing
fee, Buyer will use its best efforts to obtain the requisite approval; such
approval, however, is not a condition to Seller's obligations to consummate
the Closing on the Closing Date.
3.5 SPECIAL FACILITIES. Seller and Buyer shall have entered into
an agreement, on terms and conditions reasonably satisfactory to Seller and
no less favorable to Seller than under the Agreement for Installation of
Special Facilities for Parallel Operation Between Bangor Hydro-Electric
Company and Babcock-Ultrapower Jonesboro (the "Special Facilities Agreement")
in effect as of the date of this Agreement, providing for the continued use
of the Special Facilities (as defined in the Special Facilities Agreement) by
Seller (or any successor owner or user of the Facility). To the extent that
the approval of the MPUC or other governmental agency is required as a
condition to the effectiveness of such agreement, at Seller's request, Buyer
will use its best efforts to obtain the requisite approval; such approval,
however is not a condition to Seller's obligation to consummate the Closing
on the Closing Date. In the absence of such approved agreement, Buyer will
make the Special Facilities available to Seller (and any such successor)
pursuant to the applicable industrial tariff in effect from time to time.
3.6 DISPATCH SERVICES AGREEMENT. Seller and Buyer shall have
entered into an agreement, on terms and conditions reasonably satisfactory to
Seller, requiring Buyer to provide dispatch services to Seller (or any
successor owner or user of the Facility) to allow Seller or such successor to
sell energy and capacity into northeastern power markets. To the extent that
the approval of the Federal Energy Regulatory Commission or other
governmental agency is required as a condition to the effectiveness of such
agreement, at Seller's request and upon payment by Seller to Buyer of any
required filing fee, Buyer will use its best efforts to obtain the requisite
approval; such approval, however, is not a condition to Seller's obligation
to consummate the Closing on the Closing Date.
3.7 STATION SERVICE RATE AGREEMENT. Seller and Buyer shall have
entered into an agreement, on terms and conditions and at a rate reasonably
satisfactory to Seller, providing for the supply of electric power by Buyer
to the Facility (notwithstanding any subsequent change in ownership of the
Facility). To the extent that the approval of the MPUC or other governmental
agency is required as a condition to the effectiveness of such agreement, at
Seller's request, Buyer will use its best efforts to obtain the requisite
approval; such approval, however, is not a condition to Seller's obligation
to consummate the Closing on the Closing Date. In the absence of such
approved agreement, Buyer will make electric power available to the Facility
at rates and pursuant to terms and conditions on file with the MPUC.
3.8 WEST ENFIELD. On the Closing Date, there shall have been
consummated in accordance with the West Enfield Purchase Agreement, the sale
to the Buyer of all right, title and interest of Babcock-Ultrapower West
Enfield in and to the Power Purchase Agreement, dated as of August 13, 1984,
as amended to date, regarding the wood-fired small power production facility
located in West Enfield, Maine.
3.9 NO LITIGATION. No litigation whose subject matter relates to
any of the transactions contemplated by this Agreement shall be pending or
threatened before any court or regulatory agency the outcome of which, in the
reasonable opinion of Seller, could materially adversely affect the ability
of Seller to consummate such transactions.
3.10 SCHEDULE 6.3(B). Any claims under the Power Purchase
Agreement which Buyer shall have proposed to add to Schedule 6.3(b) after the
Underwriting Date shall be reasonably satisfactory to Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller on the date hereof
and as of the Closing Date as follows:
4.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maine and has
the full corporate power and authority to carry on its business as it is now
being conducted.
4.2 AUTHORIZATION. Buyer has the full corporate power and
authority to enter into this Agreement, the Assignment and the agreements
referred to in Sections 3.4 through 3.7 hereof (such agreements referred to
in Sections 3.4. through 3.7 hereof collectively, the "Post-PPA Agreements")
and to perform its obligations hereunder and thereunder. Buyer's execution,
delivery and performance of this Agreement have been, and Buyer's execution,
delivery and performance of the Assignment, the Post-PPA Agreements and all
other documents or instruments incidental thereto will have been, prior to
the execution thereof, approved by all necessary corporate action on the part
of Buyer. Except where governmental approvals for Post-PPA Agreements may be
required as noted in Sections 3.4 through 3.7, this Agreement is, and the
Assignment and the Post-PPA Agreements, when executed and delivered, will be,
the valid and binding obligations of Buyer enforceable in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally and by general principles of equity, regardless of whether such
equitable principles are considered in a proceeding at law or in equity.
4.3 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES AND THIRD
PARTIES. Except for the approval of the MPUC referred to in Section 2.3
above and approvals described in Sections 3.4 to 3.7 with respect to the
Post-PPA Agreements, no consent, approval or authorization of, or
declaration, filing or registration with, any court or governmental or
regulatory authority or any other third party is required to be made or
obtained by Buyer in connection with the execution, delivery and performance
of this Agreement, the Assignment or the Post-PPA Agreements. As of the
Closing Date, the MPUC approval referred to in the preceding sentence has
been obtained. Any stocks, bonds, notes or other evidence of indebtedness
issued or sold or to be issued or sold pursuant to or in reliance on and in
accordance with such MPUC approval are and shall be valid, binding and
enforceable in accordance with their terms, including the terms of any
agreement, instrument or document under or pursuant to which the stocks,
bonds, notes or other evidences of indebtedness are issued.
4.4 LITIGATION. No actions, claims, proceedings, suits,
investigations, orders to show cause, notices of violation or notices of
apparent liability or forfeiture are pending, or to the best knowledge of
Buyer threatened, against Buyer questioning or challenging the validity of
this Agreement, the Assignment or the Post-PPA Agreements or any action taken
or proposed to be taken by Buyer pursuant hereto or in connection with the
transactions contemplated hereby or thereby.
4.5 NO VIOLATION. Subject to any necessary consents of Buyer's
lenders referred to in Section 2.4 above, Buyer's execution, delivery and
performance of this Agreement, the Assignment or the Post-PPA Agreements will
not violate or conflict with, or require a consent or result in a default or
event of default under, any material contract, agreement, note, mortgage or
indenture, or any judgment, order or decree, to which Buyer is a party or by
which it or its assets are bound. As of the Closing Date, the lenders'
approval referred to in the preceding sentence has been obtained.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer on the date hereof
and as of the Closing Date as follows:
5.1 ORGANIZATION. Seller is a joint venture formed as a general
partnership duly organized, validly existing and in good standing under the
laws of the State of California and has the full partnership power and
authority to carry on its business as it is now being conducted.
5.2 AUTHORIZATION. Seller has the full power and authority to
enter into this Agreement, the Assignment and the Post-PPA Agreements and to
perform its obligations hereunder and thereunder. Seller's execution,
delivery and performance of this Agreement have been, and Seller's execution,
delivery and performance of the Assignment and the Post-PPA Agreements will
have been, prior to the execution thereof, approved by all necessary
partnership action on the part of Seller and by all corporate and partnership
action on the part of its partners. This Agreement is, and the Assignment
and the Post-PPA Agreements, when executed and delivered, will be, the valid
and binding obligations of Seller enforceable in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency and other similar laws affecting creditors' rights generally and
by general principles of equity, regardless of whether such equitable
principles are considered in a proceeding at law or in equity.
5.3 CONSENTS AND APPROVALS OF
GOVERNMENTAL AUTHORITIES. Except for any approvals described in Sections
3.4 to 3.7 with respect to the Post-PPA Agreements, no consent, approval or
authorization of, or declaration, filing or registration with, any court or
governmental or regulatory authority is required to be made or obtained by
Seller in connection with its execution, delivery and performance of this
Agreement, the Assignment or the Post-PPA Agreements.
5.4 LITIGATION. No actions, claims, proceedings, suits,
investigations, orders to show cause, notices of violation or notices of
apparent liability or forfeiture are pending, or to the best knowledge of
Seller threatened, against Seller questioning or challenging the validity of
this Agreement, the Assignment or the Post-PPA Agreements or any action taken
or proposed to be taken by Seller pursuant hereto or in connection with the
transactions contemplated hereby or thereby.
5.5 NO VIOLATION. Subject to consent of the Agent and the Banks
under the Loan Agreement, Seller's execution, delivery and performance of
this Agreement, the Assignment or the Post-PPA Agreements will not violate or
conflict with, or require the consent or result in a default or event of
default under, any material contract, agreement, note, mortgage or indenture,
or any judgment, order or decree to which Seller is a party or by which it or
its assets are bound.
ARTICLE 6
MISCELLANEOUS PROVISIONS
6.1 TRANSACTION COSTS. (a) Buyer shall be responsible for all
out-of-pocket costs and expenses incurred by or on behalf of Buyer in
connection with this Agreement, including the fees and costs of its counsel,
and shall also be responsible for fees and costs of counsel to Seller
reasonably incurred in connection with this Agreement and the transactions
contemplated hereby and of counsel to the Agent and the Banks (to the extent
that Seller determines it is responsible for such fees and costs under the
Loan Agreement and the Security Documents) incurred in connection with this
Agreement and the transactions contemplated hereby, in each case whether or
not the Closing occurs. In addition, Buyer shall be responsible for the
travel expenses and out-of-pocket costs of Seller and each partner of Seller
incurred in connection with this Agreement and the transactions contemplated
hereby to the extent such costs exceed $15,000, whether or not the Closing
occurs. Buyer shall also be responsible for all amendment, prepayment,
breakage, termination, up-front, commitment or other Bank fees or costs or
expenses payable in connection with the payment of the obligations of the
Seller under the Loan Agreement as of the Escrow Release Date and the
incurrence by Buyer of new debt in connection with the transactions
contemplated hereby.
(b) This obligation shall survive the Closing or any termination
of this Agreement, and Buyer shall pay such fees, costs and expenses (i)
within 15 days after receipt of invoices submitted to Buyer by Seller
(together with such supporting data in reasonable detail and such supporting
documentation as may be reasonably available to Seller) as such fees, costs
and expenses are incurred, and (ii) at the Closing to the extent they are
known and are the subject of invoices provided to Buyer pursuant to Section
1.4(a)(iv) hereof.
6.2 TERMINATION. This Agreement may be terminated at any time by
the mutual agreement of Seller and Buyer, and will terminate at 12:01 A.M.
(New York time) on September 16, 1995 unless extended by mutual agreement of
Seller and Buyer.
6.3 SURVIVAL. (a) All covenants, agreements, representations,
and warranties made by the parties to this Agreement or in any agreement,
document, or instrument executed and delivered pursuant hereto or in
connection with the transactions contemplated hereby shall survive the
Closing, to the extent of and in accordance with their terms.
(b) From and after the Closing Date and notwithstanding the
consummation of the sale described in Section 1.1 hereof, all rights of Buyer
and Seller against each other under the Power Purchase Agreement in respect
of any claim of either Buyer or Seller which is described in Schedule 6.3(b)
hereof, or any claim arising during the period from the date hereof until the
Closing Date and which shall be described in Schedule 6.3(b) hereof as
amended as of the Closing Date, shall survive and be preserved for further
action by Buyer or Seller in accordance with the terms of the Power Purchase
Agreement as in effect on the date hereof and applicable law.
6.4 TAX INDEMNIFICATION. (a) Buyer hereby agrees to indemnify and
hold Seller and each partner of Seller (each, a "Tax-Indemnified Party")
harmless on an After-Tax Basis from and against any and all taxes, fees,
duties, impost, levies or charges of whatsoever nature (other than taxes of
general applicability based on income) imposed by the State of Maine or any
political subdivision thereof or any taxing authority of such State or
political subdivision and all interest, penalties or similar liabilities with
respect thereto (any such amounts, "Taxes") solely as a result of any payment
made or to be made by Buyer to Seller pursuant to this Agreement or as a
result of the purchase and sale of Seller's right, title and interest in and
to the Power Purchase Agreement as contemplated by this Agreement but only to
the extent such Taxes are imposed as a result of a Change in Law after the
date of this Agreement. Buyer agrees to pay (or reimburse such Tax-
Indemnified Party for payment of) any and all Taxes within 45 days of the
date on which such Tax-Indemnified Party delivers to Buyer the documentation
required by the immediately succeeding paragraph.
Each Tax-Indemnified Party will (i) notify Buyer in writing within
five business days of such Tax-Indemnified Party's receipt of an assessment,
notice or request for payment of any such Tax from a taxing authority, and
(ii) supply to Buyer not less than twenty business days in advance of the due
date therefor calculations, documentation and forms of returns (or, at the
option of such Indemnified Party, pertinent portions of or excerpts from such
returns) demonstrating the nature, amount and calculation of any Tax which
such Tax-Indemnified Party believes Buyer is obligated to pay pursuant to
this Section. In no event will Buyer be obligated to pay interest, penalties
or late charges due as a result of a Tax-Indemnified Party's failure to file
returns or make Tax payments within the time periods required by law unless
such failure is the result of the action or inaction of Buyer. Failure of a
Tax-Indemnified Party to provide any notice or other item to Buyer as
described in this paragraph by the time specified in this or the immediately
succeeding paragraph shall not, however, affect such Tax-Indemnified Party's
right to indemnification as provided in the first paragraph of this Section
6.4(a).
Each Tax-Indemnified Party will promptly notify Buyer of any event
which such Tax-Indemnified Party believes constitutes or may constitute a
Change of Law promptly after becoming aware thereof. Buyer may, at its
option, require such Tax-Indemnified Party, with funds provided by Buyer, to
make any payment of Tax pursuant to this Section under protest and may at
Buyer's sole expense contest the assessment or calculation of such Tax before
the relevant taxing authority. Each Tax-Indemnified Party agrees to Buyer
exercising direction and control of any such protest and any related
proceeding, and will provide reasonable cooperation at Buyer's request and
sole expense in the conduct thereof.
(b) For purposes of Section 6.4(a) above, (i) "Change in Law"
shall mean any finally adopted change in law, rule or regulation, or official
published interpretation thereof in each instance, and (ii) "After-Tax Basis"
shall mean on a basis such that any payment required to be paid on such basis
shall, if necessary, be supplemented by a further payment so that the sum of
the two payments, after deduction of all taxes, penalties, fines, interest
and other charges resulting from the receipt (actual or constructive) of such
payments imposed by or under any Federal, state or local governmental
authority in the United States or subdivision or any taxing authority of any
thereof (assuming for this purpose that each Tax-Indemnified Party is a tax-
paying entity in the State of Maine subject to the maximum applicable
corporate income tax rates then in effect), and after taking into account all
related tax savings (whether by deduction, credit or otherwise) actually
realized as a result of such payments or the event or circumstance giving
rise thereto, shall be equal to the payment so required.
(c) Each Tax-Indemnified Party agrees not to actively support the
adoption of any Change in Law to which the indemnification contained in this
Section 6.4 would apply and further agrees that none of its affiliates shall
do so. In addition, each partner of Seller agrees that at the request and at
the expense of Buyer it will use reasonable efforts to assist in any
challenge to any such Change in Law.
6.5 GENERAL INDEMNIFICATION BY BUYER. Buyer shall defend,
indemnify and hold Seller, each partner thereof, and each partner's
directors, officers, employees, agents, attorneys, and affiliates (each, a
"Seller Indemnified Party") harmless at all times against and in respect of
any claim, action, loss, cost, expense, liability, penalty or interest, or
damage (collectively, "Damages") suffered or incurred by such Seller
Indemnified Party, and all other costs and expenses incurred by such Seller
Indemnified Party in necessary investigation or, after notice to Buyer of its
intent to do so, in attempting to avoid or oppose the imposition thereof,
arising out of, relating to, or resulting from, (i) any breach of any
representation, warranty, covenant, or agreement made by Buyer in this
Agreement, or in any agreement, document, or instrument executed and
delivered pursuant to or in connection with the transactions contemplated
hereby or thereby; or (ii) the non-performance or malperformance of any
obligation to be performed on the part of Buyer under this Agreement or in
any agreement (including, without limitation, any agreement entered into
pursuant to Section 1.8 hereof), document or instrument executed and
delivered pursuant hereto or in connection with the transactions contemplated
hereby or thereby; PROVIDED that Buyer shall not be obligated to indemnify
any Seller Indemnified Party for any Damages suffered or incurred by such
Seller Indemnified Party as a result of such Seller Indemnified Party's gross
negligence or willful misconduct.
6.6 GENERAL INDEMNIFICATION BY SELLER. Seller shall defend,
indemnify and hold Buyer, and each of Buyer's directors, officers, employees,
agents, attorneys, and affiliates (each, a "Buyer Indemnified Party")
harmless at all times against and in respect of any Damages suffered or
incurred by such Buyer Indemnified Party, and all other costs and expenses
incurred by such Buyer Indemnified Party in necessary investigation or, after
notice to Seller of its intent to do so, in attempting to avoid or oppose the
imposition thereof, arising out of, relating to, or resulting from, (i) any
breach of any representation, warranty, covenant, or agreement made by Seller
in this Agreement, or in any agreement, document, or instrument executed and
delivered pursuant to or in connection with the transactions contemplated
hereby or thereby; or (ii) the non-performance or malperformance of any
obligation to be performed on the part of Seller under this Agreement or in
any agreement, document or instrument executed and delivered pursuant hereto
or in connection with the transactions contemplated hereby or thereby;
PROVIDED that Seller shall not be required to indemnify any Buyer Indemnified
Party for any Damages suffered or incurred by such Buyer Indemnified Party as
a result of such Buyer Indemnified Party's gross negligence or willful
misconduct.
6.7 DEFENSE AGAINST ASSERTED CLAIMS; LIMITATIONS. (a) If any
claim or assertion for Damages is made or asserted against any Seller
Indemnified Party or Buyer Indemnified Party, as applicable, as provided in
Section 6.5 or 6.6, such Seller Indemnified Party or Buyer Indemnified Party
(each hereinafter referred to as an "Indemnified Party") shall with
reasonable promptness give to the other party (the "Indemnifying Party")
written notice of the claim or assertion for Damages and request the
Indemnifying Party to defend the same. The Indemnifying Party shall, at its
expense, assume the defense of such claim or assertion with counsel
reasonably satisfactory to the Indemnified Party. The Indemnified Party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
separate counsel shall be at the expense of the Indemnified Party unless (i)
the engagement of such counsel has been specifically authorized by the
Indemnifying Party in writing, (ii) the Indemnifying Party has failed to
assume the defense of such claim or assertion within ten (10) days after
being notified of such claim, (iii) the named parties to such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party shall have reasonably concluded
that there may be one or more legal defenses available to the Indemnified
Party which are different from or in addition to those available to the
Indemnifying Party, or (iv) such action involves a criminal claim against
such Indemnified Party. In the event the conditions set forth in clause
(iii) of the preceding sentence are met, the Indemnifying Party shall not
have the right to assume the defense of such action on behalf of the
Indemnified Party as to such legal defenses available to the Indemnified
Party which are different from or in addition to those available to the
Indemnifying Party, but shall indemnify the Indemnified Party against all
litigation expenses (including reasonable fees of counsel) in connection with
such defenses. The indemnification to which this Section 6.7 relates shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received (together with such
supporting data in reasonable detail and such supporting documentation as may
be reasonably available to the Indemnified Party) or loss, damage, liability,
cost, or expense is incurred; PROVIDED, that no settlement or compromise of
any claim asserted or action commenced in respect of which the Indemnifying
Party will be liable in accordance with its indemnity under this Agreement
shall give rise to liability of such Indemnifying Party unless such
Indemnifying Party shall have been notified in writing of the proposed
settlement or compromise and shall have consented in writing thereto, which
consent shall not be unreasonably withheld so long as any claims which have
been or may be asserted against the Indemnifying Party in such action or any
related or future action are to be released with prejudice in connection with
such settlement or compromise, it being understood, however, that in the
event the Indemnifying Party unreasonably withholds its consent to a
settlement or compromise as to which it has agreed above that such consent
shall not be unreasonably withheld, the Indemnified Party may proceed to
consummate such settlement or compromise without the consent of the
Indemnifying Party and may pursue its indemnification claims hereunder
against the Indemnifying Party as provided herein in respect of the cost of
such settlement or compromise. Buyer and Seller will cooperate with each
other and shall take reasonable measures to obtain the cooperation of
Seller's Indemnified Parties and Buyer's Indemnified Parties, as applicable,
in the defense of any action and the relevant records of each shall be
available to the other with respect to such defense.
(b) In no event shall either party be liable to any Indemnified
Party (as defined in Section 6.7) for any consequential, special, indirect or
incidental damages, or loss of profits, cost of money, claims of customers or
claims of financiers, or any amounts in settlement thereof, howsoever the
same may be caused, in connection with any claim arising under this Agreement
except to the extent any of the foregoing are included in a third party claim
against a Seller Indemnified Party or Buyer Indemnified Party, as the case
may be, to which the provisions of Section 6.5 or 6.6 apply. In addition,
each Seller Indemnified Party and each Buyer Indemnified Party shall use
reasonable efforts to mitigate any Damages which may be the subject of an
indemnification claim by it pursuant to Section 6.5 or 6.6 hereof, as
applicable.
6.8 CONDUCT PRIOR TO CLOSING. During the period from the date of
this Agreement to the Closing Date, (i) Buyer shall confer on a regular and
frequent basis with one or more representatives of Seller to report on the
status of the various conditions set forth in Article 2 hereof, (ii) Seller
agrees to provide reasonable cooperation to Buyer in connection with the
possible minimization of the amounts payable pursuant to Section 1.4(a)(iii)
hereof, and (iii) promptly upon learning thereof, each of Buyer and Seller
shall notify the other of any breach of any representation or warranty set
forth in Section 4 or Section 5 hereof.
6.9 NOTICES. All notices, requests or other communications
required or permitted hereunder shall be given in writing and shall be deemed
to have been duly given, if delivered in hand, on the date of receipt (or
refusal), or if given by Federal Express or similar nationally recognized
expedited overnight commercial courier, when delivered to Federal Express or
similar nationally recognized expedited overnight commercial courier,
addressed to the recipient of the notice, with all freight charges paid, or
if given by facsimile transmission, when sent, to the following addresses and
facsimile numbers:
If to Seller, to:
Babcock & Wilcox Jonesboro Power, Inc.
20 South Van Buren Avenue
Barberton, Ohio 44203
Facsimile: 216-860-1868
Attention: Vice President, Operations
and
ESI Jonesboro Limited Partnership
c/o ESI Energy, Inc.
1400 Centrepark Boulevard, Suite 600
West Palm Beach, Florida 33401
Facsimile: (407) 687-4932
Attention: Vice-President, Business Management
and
L.G.& E. Power 6 Incorporated
2030 Main Street, 12th Floor
Irvine, California 92714
Facsimile: (714) 955-4333
Attention: President
If to Buyer, to:
Bangor Hydro-Electric Company
P.O. Box 932
33 State Street
Bangor, ME 04402-0932
Facsimile: 207-990-6963
Attention: Robert S. Briggs, President
or to such other address or number as any party may have designated for
itself by written notice to the other in the manner herein prescribed, except
that notices of change of address shall be effective only upon receipt.
6.10 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other party and any
assignment made absent such consent shall be void AB INITIO.
6.11 GOVERNING LAW. This agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance
with the laws of the State of Maine.
6.12 COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
6.13 HEADINGS. The headings contained in this Agreement are
inserted for convenience only and are not intended to be determinative or
interpretive of the substance of this Agreement.
6.14 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties,
covenants or undertakings other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof.
6.15 EFFECTIVENESS. This Agreement shall become effective on the
date (the "Effective Date") on which (i) Seller and Buyer shall have signed a
copy hereof (whether the same or different copies), (ii) Buyer shall have
delivered to Seller instruments with the same substantive effect as those
required by Sections 1.5(ii) and (iii) to be delivered by Buyer on the
Closing Date, (iii) Seller shall have delivered to Buyer instruments with the
same substantive effect as those required by Sections 1.6(ii) and (iii) to be
delivered by Seller on the Closing Date, and (iv) Seller shall have received
any necessary consent of the Agent and the Banks under the Loan Agreement to
its execution and delivery of this Agreement.
6.1 CONDITIONS PRECEDENT. Seller and Buyer agree to use
reasonable efforts to satisfy, on or prior to the Closing Date, the
conditions precedent to their respective obligations to consummate the
Closing set forth in Article 2 and Article 3 hereof.
6.17 FUEL PURCHASE. Except as provided herein, Seller shall not
purchase any fuel for use at the Facility unless Buyer shall have consented
to such purchase. Seller may purchase fuel without Buyer's consent provided
that Buyer shall not be obligated pursuant to Section 1.4(a)(i) and Section
1.7(b) to pay the book inventory value or disposal cost of any such fuel
purchased without its consent. Any impairment of Seller's ability to comply
with the Power Purchase Agreement as a result of the operation of this
Section 6.17 shall not be the basis for any claim of a default on the part of
the Seller under the Power Purchase Agreement.
6.18 DISCLOSURE. Each of Seller and Buyer agrees that the terms of
this Agreement may be disclosed to any regulatory agency which has
jurisdiction over Seller, Buyer, or any of their respective affiliates, to
any of their respective lenders, in any filings under the securities laws, in
any disclosure document delivered to its shareholders or in connection with
any offering of its securities.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY,
By: /s/ Robert S. Briggs
---------------------
Name:
Title:
BABCOCK ULTRAPOWER JONESBORO,
a California general partnership
By: L.G.& E. POWER 6
INCORPORATED,
its general partner
By: /s/ Scott Noll
-----------------
Name:
Title:
By: ESI JONESBORO LIMITED
PARTNERSHIP,
a Delaware Limited
Partnership
By: ESI JONESBORO, INC.,
its general partner
By: /s/ Lori Bonilla
------------------
Name:
Title:
By: BABCOCK & WILCOX JONESBORO
POWER, INC.,
its general partner
By: /s/ Jack M. Arnold
----------------------
Name:
Title:
EXHIBIT A
to Purchase Agreement
ASSIGNMENT OF POWER PURCHASE AGREEMENT
THIS ASSIGNMENT OF POWER PURCHASE AGREEMENT (this "Assignment") is
made and entered into as of [closing date] by and between BABCOCK-ULTRAPOWER
JONESBORO, a joint venture formed as a California general partnership (the
"Assignor"), and BANGOR HYDRO-ELECTRIC COMPANY, a Maine corporation (the
"Assignee").
W I T N E S E T H :
WHEREAS, the Assignor and the Assignee are parties to the Power
Purchase Agreement dated as of August 13, 1984 (as amended to date, the
"Power Purchase Agreement");
WHEREAS, the Assignor has agreed to sell to the Assignee and the
Assignee has agreed to purchase all of Assignor's right, title and interest
in and to the Power Purchase Agreement on the terms and conditions set forth
in the Purchase Agreement dated as of March 31, 1995 (the "Purchase
Agreement") by and between the Assignor and the Assignee; and
WHEREAS, it is a condition to the obligations of the parties under
the Purchase Agreement that this Assignment be executed and delivered;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT. The Assignor hereby sells, assigns, transfers,
conveys and delivers to the Assignee, without recourse (except for any
misrepresentation regarding the subject matter stated in the immediately
succeeding sentence) to the Assignor and without any warranty to the
Assignee, either express or implied, as to any matter whatsoever and without
representation except as herein expressly made, and the Assignee hereby
purchases from the Assignor, all of the Assignor's right, title and interest
in and to the Power Purchase Agreement (the "Interest"). The Assignor and
each partner of the Assignor represent to the Assignee that the Assignor is
the sole owner of the Interest herein conveyed and that such Interest of the
Assignor is free and clear of all liens, security interests, claims or
encumbrances whatsoever.
2. RELEASE OF CLAIMS. Except with respect to any claims which
are to survive the execution and delivery of this Assignment and the
consummation of the transactions contemplated by the Purchase Agreement
pursuant to the terms of Section 6.3(b) of the Purchase Agreement, the
Assignor and each partner of the Assignor hereby release the Assignee, its
officers, directors, employees, agents and affiliates, and the Assignee
hereby releases the Assignor, each partner of the Assignor and each partner's
officers, directors, employees, agents and affiliates, fully, finally, and
forever from all claims (known or unknown) which have been or could be
asserted by the parties hereto arising out of, under or in connection with
the Power Purchase Agreement under the statutory or common law of any
jurisdiction, including, without limitation, any and all manner of actions,
causes of action, suits, damages, sums of money, controversies, agreements,
promises, court costs, judgments, attorneys' fees, claims for exemplary or
punitive damages, claims for consequential damages, and all claims and
demands of whatever type in law or in equity, which any party to this
Assignment ever had, now has or which any party to this Assignment hereafter
can, shall or may have for, upon, or by reason of the Power Purchase
Agreement.
3. CAPITALIZED TERMS. All capitalized terms not otherwise
defined in this Assignment shall have the meanings ascribed to such terms in
the Purchase Agreement.
4. COUNTERPARTS. This Assignment may be executed in several
counterparts each of which shall constitute but one and the same instrument.
5. GOVERNING LAW. This Assignment shall be governed by and
construed in accordance with the laws of the State of Maine.
6. AMENDMENTS. This Assignment shall not be amended except by an
instrument in writing executed by the parties through their duly authorized
representatives.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
to be duly executed as of the day and year first written above.
BABCOCK-ULTRAPOWER JONESBORO,
a general partnership, as Assignor
By: L.G.& E. POWER 6 INCORPORATED,
its general partner
By:_______________________
Name:
Title:
By: ESI JONESBORO LIMITED
PARTNERSHIP,
a Delaware Limited
Partnership
By: ESI JONESBORO, INC.,
its general partner
By:_______________________
Name:
Title:
By: BABCOCK & WILCOX JONESBORO
POWER, INC., its general
partner
By:_______________________
Name:
Title:
BANGOR HYDRO-ELECTRIC COMPANY,
a corporation, as Assignee
By________________________
Name:
Title:
EXHIBIT B
[Opinion of Buyer's Counsel]
[Closing date]
re 24.5 MW Production Facility
in Jonesboro, Maine
Babcock & Wilcox Jonesboro Power, Inc.
20 South Van Buren Avenue
Barberton, Ohio 44203
ESI Jonesboro Limited Partnership
c/o ESI Energy, Inc.
1400 Centrepark Boulevard, Suite 600
West Palm Beach, Florida 33401
L.G.& E. Power 6 Incorporated
2030 Main Street, 12th Floor
Irvine, California 92714
Ladies and Gentlemen:
I am General Counsel and Corporate Clerk of Bangor Hydro-Electric
Company ("Buyer"), a Maine corporation, and have acted as its counsel in
connection with the execution and delivery of the Purchase Agreement dated as
of March 31, 1995 (the "Agreement") by and between Babcock-Ultrapower
Jonesboro ("Seller"), a joint venture formed as a California general
partnership, and Buyer relating to the Power Purchase Agreement, dated as of
August 13, 1984, as amended, by and between Seller and Buyer. All
capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to such terms in the Agreement.
In rendering this opinion, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals
and the conformity to authentic original documents of all documents submitted
to me as certified, conformed or photostatic copies.
I have examined and relied upon such documents, corporate records,
certificates of corporate officers and representatives and other instruments
and legal matters as I have deemed necessary for the purposes of the opinions
expressed herein.
Based upon the foregoing, it is my opinion that:
1. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maine. Buyer has full corporate
authority and power to enter into the Agreement, the Post-PPA Agreements and
the Assignment and to perform its obligations thereunder.
2. Except for such approvals with respect to the Post-PPA
Agreements as are set forth in the Agreement, no consent, order,
authorization, waiver, approval or any other action by, or registration,
declaration or filing with, any person, board or body, public or private, is
required for Buyer to enter into the Agreement, the Post-PPA Agreements or
the Assignment or for Buyer to perform, and to be legally bound to perform,
its obligations thereunder.
3. The Agreement, the Post-PPA Agreements and the Assignment have
been duly and validly authorized by all requisite action on the part of
Buyer, have been duly and validly executed and delivered by Buyer and,
assuming due authorization, execution and delivery by Seller, constitute the
legal, valid and binding obligations of Buyer, enforceable against it in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency or other similar laws applicable to
creditors' rights generally and except as the availability of any particular
remedy may be limited by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law, and
subject in the case of the Post-PPA Agreements to the receipt of such
approvals as are described in Sections 3.4 through 3.7 of the Agreement.
4. The execution, delivery and performance of the Agreement, the
Post-PPA Agreements and the Assignment will not result in any violation of
the articles of incorporation or by-laws of Buyer or (subject in the case of
the Post-PPA Agreements to the receipt of such approvals as are described in
Sections 3.4 through 3.7 of the Agreement) any existing statute, law,
governmental rule, regulation, decree or order applicable to Buyer or its
properties, or contravene the provisions of or constitute a default under any
material agreement, indenture, mortgage, lease or other instrument to which
it or its property is or may be bound.
5. There is no action, suit, proceeding or investigation at law or
in equity or by or before any court or administrative agency pending or, to
the best of my knowledge threatened against or affecting Buyer which
questions the validity of the Agreement, the Post-PPA Agreements or the
Assignment which, individually or in the aggregate, would have a material
adverse effect upon the ability of Buyer to enter into and carry out its
obligations under the Agreement, the Post-PPA Agreements or the Assignment.
I am a member of the Bar of the State of Maine and express no
opinion as to any laws other than the laws of the State of Maine and the
federal laws of the United States.
I am furnishing this opinion to you solely for your benefit in
connection with the transactions contemplated by the Agreement and this
opinion is not to be used, circulated, quoted or otherwise referred to for
any other purpose without my prior written approval in each instance.
Very truly yours,
EXHIBIT C
Counsel to Seller and counsel to each partner of Seller shall
deliver opinions, dated the Closing Date, to the effect that:
1. Seller is a general partnership duly organized, validly
existing and in good standing under the laws of the State of California.
Seller is fully authorized and empowered to enter into the Agreement, the
Post-PPA Agreements and the Assignment and to perform its obligations
thereunder.
2. No consent, order, authorization, waiver, approval or any other
action by, or registration, declaration or filing with, any person, board or
body, public or private, is required for Seller to enter into the Agreement,
the Post-PPA Agreements or the Assignment for Seller to perform, and to be
legally bound to perform, its obligations thereunder.
3. The Agreement, the Post-PPA Agreements and the Assignment have
been duly and validly authorized by all requisite action on the part of
Seller, have been duly and validly executed and delivered by Seller and
constitute the legal, valid and binding obligation of Seller, enforceable
against it in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency or other similar laws
applicable to creditors' rights generally and except as the availability of
any particular remedy may be limited by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
4. The execution, delivery and performance of the Agreement, the
Post-PPA Agreements and the Assignment will not result in any violation of
the partnership agreement of Seller or any existing statute, law,
governmental rule, regulation, decree or order applicable to Seller or its
properties, or contravene the provisions of or constitute a default under any
material agreement, indenture, mortgage, lease or other instrument to which
it or its property is or may be bound.
5. There is no action, suit, proceeding or investigation at law or
in equity or by or before any court or administrative agency pending or, to
the best of our knowledge threatened against or affecting Seller which
questions the validity of the Agreement, the Post-PPA Agreements or the
Assignment which, individually or in the aggregate, would have a material
adverse effect upon the ability of Seller to enter into and carry out its
obligations under the Agreement, the Post-PPA Agreements or the Assignment.
6. Seller is the sole owner of the Interest (as defined in the
Assignment) conveyed under the Assignment and such Interest of the Seller is
free and clear of all liens, security interests, claims or encumbrances
whatsoever.
PURCHASE AGREEMENT
Schedule 6.3(b)
DISPUTED ISSUES
Jonesboro Facility
METERING ISSUE
Babcock-Ultrapower Jonesboro contends that the facility has experienced high
purchased electricity charges based on inaccurate usage readings from a
Bangor Hydro meter located at the Jonesboro substation. Extensive system
checking and technical analysis, conducted by Bangor Hydro, Babcock-
Ultrapower Jonesboro, and independent consultants, has demonstrated that the
plant metering has been affected by harmonics in the Bangor Hydro system.
These harmonics have caused imbalances in the system distribution lines that
are improperly registered by Bangor Hydro's meter as electric usage at the
facility. In January 1994 Babcock-Ultrapower Jonesboro, as a customer,
notified Bangor Hydro of the alleged problem and the Partnership's concern
about excessive past billings for electric usage and the potential for
ongoing excessive electric charges if the situation was not corrected.
Despite several follow up requests and the acknowledgement by Bangor Hydro
technicians that a problem exists, a solution has not been implemented to
date, nor have prior overbillings been corrected.
OCTOBER 1994 CAPACITY AND
ENERGY BILLINGS AND 1994 BONUS BILLINGS
The facility completed its scheduled 1994 two-week maintenance outage a day
and a half early and, as was the practice in the past, called Bangor Hydro
for a dispatch order to either begin firm generation or curtail generation.
The facility was instructed to curtail generation and received
acknowledgments from the Bangor Dispatch Operators that the units were
accepted back as available for service.
The facility responded to these dispatch orders and Babcock-Ultrapower
expected to receive decremental energy payments for the period commencing
with Bangor's dispatch order; however, Bangor Hydro refused to pay the total
invoiced amounts, claiming that a mandatory full two-week outage was required
and that no decremental payments were due until this period was completed.
Babcock-Ultrapower contends that the maintenance periods were terminated by
Bangor Hydro's dispatch orders, and that these orders were to be relied upon
based on past practices and actions of Bangor Hydro.
The availability of decremental energy during this period also affects
Babcock-Ultrapower's performance payment under the 1994 Bonus Billing.
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of this 31st day of March, 1995 by and between BABCOCK-ULTRAPOWER WEST
ENFIELD, a joint venture formed as a California general partnership
("Seller"), and BANGOR HYDRO-ELECTRIC COMPANY, a Maine corporation ("Buyer").
RECITALS
WHEREAS, Seller is the owner of a 24.5 MW wood-fired small power
production facility located in West Enfield, Maine (the "Facility");
WHEREAS, pursuant to a Power Purchase Agreement dated as of August
13, 1984 (as amended to date, the "Power Purchase Agreement") between Buyer
and Seller, Buyer has committed to purchase the electric output of the
Facility for a term and under such conditions as are set forth therein;
WHEREAS, Buyer, based upon its examination and analysis, believes
that it is acquiring the ability to achieve substantial net present value
savings for its customers by reducing its overall cost of purchased power if
it acquires all right, title and interest of Seller in and to the Power
Purchase Agreement on the terms and conditions set forth herein, and that
consummation of the transactions described herein is in the best interests of
Buyer and its customers; and
WHEREAS, Seller is willing to sell to Buyer all of its right, title
and interest in and to the Power Purchase Agreement on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and covenants contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller, intending to be legally bound, hereby agree
as follows:
ARTICLE 1
PURCHASE AND SALE; CLOSING
1.1 PURCHASE AND SALE. Subject to the terms and conditions set
forth herein, Seller agrees to sell, assign, transfer, convey and deliver to
Buyer on the Closing Date (as hereinafter defined), and Buyer agrees to
purchase from Seller on the Closing Date, all right, title and interest of
Seller in and to the Power Purchase Agreement.
1.2 PURCHASE PRICE; PAYMENTS AT CLOSING. (a) In consideration
for the purchase referred to in Section 1.1 above, Buyer shall on the Closing
Date pay to Seller (i) the amount of $41,500,000 in cash in immediately
available funds and (ii) the principal amount of Loans to be outstanding as
of the Escrow Release Date (as hereinafter defined) (subject to the
adjustment described in Section 1.2(b) below) in immediately available funds,
as specified in the notice delivered pursuant to Section 1.2(c) below (such
amounts described in clauses (i) and (ii) of this Section 1.2(a) being
hereinafter referred to collectively as the "Purchase Price") and (iii) the
amounts described in Section 1.4(a) hereof.
(b) If the Escrow Release Date does not occur on an Installment
Payment Date (as hereinafter defined), the aggregate amount payable pursuant
to Section 1.2(a)(ii) above shall be reduced by (i) the principal amount of
the installment of Loans scheduled to be repaid on the following Installment
Payment Date pursuant to Section 2.4(a)(i) (regularly scheduled payments) and
Section 2.4(b) (accelerated prepayments) of the Loan Agreement (as
hereinafter defined), multiplied by (ii) a fraction equal to the number of
days from and including the previous Installment Payment Date to but not
including the Escrow Release Date divided by the number of days from and
including the previous Installment Payment Date to but not including the
following Installment Payment Date.
(c) The aggregate amount of any payment pursuant to Section
1.2(a)(ii) above shall be equal to the amount set forth in the certificate
delivered by Seller to Buyer pursuant to Section 1.6(x) below. Except as
expressly provided in Section 1.2 (a)(ii) and Section 6.1 of this Agreement,
Seller shall pay all other amounts due and payable under the Loan Agreement
and the Security Documents.
(d) The terms "Agent", "Banks", "Loans", and "Installment Payment
Date" shall have the meanings set forth in the Amended and Restated
Construction and Term Loan Agreement dated as of October 1, 1989 (as amended
to date, the "Loan Agreement") among Seller, the Banks party thereto and The
Bank of New York, as Agent.
1.3 CLOSING DATE. (a) The consummation of the purchase referred
to in Section 1.1 above and the payments set forth in Section 1.2(a) hereof
(the "Closing") shall occur on June 9, 1995 at 10:00 a.m. (New York time), at
the offices of White & Case, 1155 Avenue of the Americas, New York, New York
10036 or at such other time, not later than September 15, 1995, as Buyer may
determine in accordance with this Section 1.3 (the "Closing Date") or such
other place as Seller and Buyer may agree upon. Buyer may select such other
Closing Date, not later than September 15, 1995, as Buyer may determine
provided that such other Closing Date shall be a date not more than five nor
less than four Eurodollar Business Days (as defined in the Loan Agreement)
prior to the date on which the Loans may be prepaid in full pursuant to the
Loan Agreement (unless the Agent otherwise agrees in writing to the
prepayment of the Loans other than as set forth in the Loan Agreement).
Buyer shall provide Seller not less than thirty days prior written notice of
such other Closing Date. In the event Buyer is unable to consummate the
purchase referred to in Section 1.1 on such Closing Date, Buyer may select
another Closing Date (determined in accordance with this paragraph and which,
without the consent of Seller, shall be not less than thirty days following
the applicable Closing Date) by written notice to Seller given not less than
five Eurodollar Business Days prior to the then applicable Closing Date. In
the event that the Closing Date is extended beyond June 9, 1995, Seller
agrees to select only thirty-day Interest Periods (as defined in the Loan
Agreement) with respect to the Loans. Seller agrees not to amend the Loan
Agreement in any manner that would increase the costs payable by Buyer
hereunder or otherwise materially and adversely affect the obligations of
Buyer to Seller under this Agreement.
(b) Concurrently with the consummation of the Closing, Seller
shall provide notice to the Agent and the Banks in accordance with the Loan
Agreement of the prepayment of the Loans in full on the Escrow Release Date.
1.4 OTHER PAYMENTS AT CLOSING.
(a) In addition to the payments required pursuant to Section
1.2(a)(i) and (ii), Buyer shall pay to Seller (or at the direction of Seller
to the applicable third parties or counterparties) on the Closing Date in
cash in immediately available funds an amount equal in the aggregate to:
(i) (x) the book inventory value of, and (y) unless Buyer has
delivered its written undertaking pursuant to Section 1.8 below, all of
Seller's projected disposal costs associated with, the fuel located at
the Facility on the Closing Date (excluding any such fuel which Seller
intends to combust in order to satisfy a power sales commitment to a
third party commencing within thirty days of the Closing Date), as set
forth in the certificate delivered by Seller pursuant to Section
1.6(viii) below; provided that Buyer will not be responsible under this
Section 1.4(a)(i) for the inventory value of any fuel in excess of the
equivalent of 7,618 bone dry short tons or the disposal of any fuel in
excess of the equivalent of 8,380 bone dry short tons;
(ii) undisputed amounts payable by Buyer to Seller under and in
accordance with the Power Purchase Agreement which will have accrued as
of the Escrow Release Date less interest accrued from, and including,
the Closing Date to, but excluding, the Escrow Release Date (the "Escrow
Interest") on all indebtedness incurred by Buyer to fund the Purchase
Price and the amounts payable pursuant to Section 1.4(a)(iii) (the
"Escrow Debt"); provided that Buyer shall have notified Seller in
writing of any amounts disputed in good faith under the Power Purchase
Agreement and its reasons for such dispute at least one business day
(which, for the purposes of this Agreement, shall mean any day other
than a Saturday, Sunday or other day on which banks in New York City or
the State of Maine are authorized or required by law to close) prior to
the Closing Date;
(iii) amounts payable to Seller's counterparties as a result of the
termination as of the Escrow Release Date of the interest rate swap
agreements entered into by Seller in respect of the Loans, as set forth
in the certificate delivered by Seller pursuant to Section 1.6(ix)
below;
(iv) amounts reimbursable by Buyer pursuant to Section 6.1 hereof
with respect to which Seller has provided invoices, and such supporting
documentation as shall be reasonably available to Seller, to Buyer at
least two business days prior to the Closing Date; and
(v) Seller's aggregate projected costs in respect of employee
retraining and employee retention, as set forth in the certificate
delivered by Seller pursuant to Section 1.6(viii) below, which together
with the costs described in Section 1.4(a)(v) of the Jonesboro Purchase
Agreement (as hereinafter defined) shall not exceed $265,000 in the
aggregate.
(b) The amounts payable on the Closing Date in respect of Sections
1.4(a)(i) and (v) above shall be as set forth in the certificate delivered by
Seller to Buyer pursuant to Section 1.6(viii) below, and, with respect to
amounts payable under Sections 1.4(a)(i)(y) and 1.4(a)(v), shall be subject
to adjustment as provided in Section 1.7 below. The amounts payable on the
Closing Date in respect of the Power Purchase Agreement under Section
1.4(a)(ii) above shall be determined in accordance with the provisions of the
Power Purchase Agreement, shall be based, as provided therein, upon a reading
of the Facility's meters on the Closing Date and shall be subject to
adjustment for the period between the Closing Date and the Escrow Release
Date as provided in Section 1.7 below based upon a reading of the Facility's
meters on the Escrow Release Date.
1.5 DELIVERIES BY BUYER ON THE CLOSING DATE. On the Closing Date,
Buyer shall deliver to Seller the following (provided that a completed draft
(which may include estimates, as appropriate) of the document described in
subsection (viii) shall be delivered to Seller at least four business days
prior to the Closing Date):
(i) an executed assignment, substantially in the form of Exhibit A
hereto (the "Assignment");
(ii) a copy, certified as of the Closing Date by the Secretary of
Buyer, of the resolutions of its Board of Directors, authorizing the
execution, delivery and performance by it of this Agreement and the
transactions contemplated hereby;
(iii) a certificate, dated as of the Closing Date and signed by the
Secretary of Buyer, as to the incumbency of the officers of Buyer
signing this Agreement and any document or agreement which is to be
signed by Buyer in connection with the Closing;
(iv) a certificate, dated as of the Closing Date and signed by an
officer of Buyer, on behalf of Buyer, to the effect that each of the
representations and warranties of Buyer made in this Agreement are true
and correct in all material respects on the Closing Date;
(v) a Certificate of Good Standing of recent date for Buyer,
issued by the appropriate authority in the State of Maine;
(vi) an opinion of counsel to Buyer in substantially the form of
Exhibit B hereto;
(vii) all other documents, instruments and certificates reasonably
required by Seller or its counsel to consummate the transactions
contemplated hereby; and
(viii) a certificate, dated the Closing Date, setting forth the
amount of the Escrow Debt to be incurred by Buyer and the rate and
amount of the Escrow Interest.
1.6 DELIVERIES BY SELLER ON THE CLOSING DATE . At the Closing,
Seller shall deliver to Buyer the following (provided that completed drafts
(which may include estimates, as appropriate) of the documents described in
subsections (viii), (ix) and (x) shall be delivered to Buyer at least three
business days prior to the Closing Date):
(i) an executed Assignment;
(ii) a copy, certified as of the Closing Date by the Secretary or
an Assistant Secretary of each partner of Seller, of the resolutions of
the Board of Directors of such partner, authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby;
(iii) a certificate, dated as of the Closing Date and signed by the
Secretary or an Assistant Secretary of each partner of Seller, as to the
incumbency of the officers of such partner signing this Agreement and
any document or agreement which is to be signed by such partner in
connection with the Closing;
(iv) a certificate, dated as of the Closing Date and signed by an
officer of each partner of Seller, on behalf of such partner, to the
effect that each of the representations and warranties of Seller made in
this Agreement, insofar as concerns such partner, and, to the best of
such partner's knowledge, insofar as concerns Seller, are true and
correct in all material respects on the Closing Date;
(v) a Certificate of Good Standing of recent date for each partner
of Seller, issued by the appropriate authority in its jurisdiction of
incorporation;
(vi) opinions of counsel to the Seller and of counsel to each
partner of Seller substantially to the effect set forth in Exhibit C
hereto;
(vii) all other documents, instruments and certificates reasonably
required by Buyer or its counsel to consummate the transactions
contemplated hereby;
(viii) a certificate, which shall set forth (A) the amounts payable
under Section 1.4(a)(i)(x), (B) a good faith estimate by Seller as of
the Closing Date of the amounts to be paid to Seller by Buyer pursuant
to Sections 1.4(a)(i)(y) and 1.4(a)(v) above and (C) the amounts to be
paid to Seller by Buyer pursuant to Section 1.4(a)(ii) above, in each
case together with supporting data in reasonable detail and such
supporting documentation as may be reasonably available to Seller;
(ix) a certificate showing the amounts to be paid to Seller by
Buyer on the Closing Date pursuant to Section 1.4(a)(iii) above,
together with supporting data in reasonable detail and such supporting
documentation as may be reasonably available to Seller; and
(x) a certificate, dated as of the Closing Date, setting forth the
aggregate amount of any payment to be made by Buyer as required pursuant
to Section 1.2(a)(ii).
1.7 POST-CLOSING ADJUSTMENTS. (a) On or prior to the fifth
business day after the Escrow Release Date, Seller shall make a final
determination of the amounts payable by Buyer under the Power Purchase
Agreement in accordance with the second sentence of Section 1.4(b) for the
period between the Closing Date and the Escrow Release Date and shall deliver
to Buyer a certificate setting forth such amounts and all calculations in
reasonable detail necessary to support such amounts. Within two business
days following delivery of such certificate, Buyer shall pay Seller in cash
in immediately available funds the amount set forth in such certificate.
(b) If Buyer has not delivered its written undertaking pursuant to
Section 1.8 below, then on the forty-fifth day following the Escrow Release
Date (or the first business day thereafter if such forty-fifth day is not a
business day) or such later date as Seller shall determine if the effect of
such delay is to reduce the amounts which may be payable by Buyer as
hereinafter determined, Seller shall make a final determination of the
amounts payable by Buyer pursuant to Section 1.4(a)(i)(y) above and shall
deliver to Buyer a certificate setting forth such amounts and all
calculations and documentation in reasonable detail necessary to support such
amounts. Within two business days following delivery of such certificate,
Seller shall pay Buyer in cash in immediately available funds (or Buyer shall
pay Seller, as applicable) the difference between the aggregate amount set
forth in such certificate and the aggregate amount paid by Buyer to Seller on
the Closing Date pursuant to Section 1.4(a)(i)(y).
(c) If Buyer has delivered its written undertaking pursuant to
Section 1.8 below, during the period for disposal to be specified in the
undertaking referred to in Section 1.8 below, Seller shall cooperate with
Buyer to permit Buyer reasonable access to the Facility, and, to the extent
available as reasonably determined by Seller, the assistance of Facility
personnel in order for Buyer to conduct the disposal of the fuel in
accordance with such undertaking.
(d) On the six-month anniversary of the Escrow Release Date (or
the first business day thereafter if such six-month anniversary is not a
business day), Seller shall make a final determination of the amount payable
by Buyer pursuant to Section 1.4(a)(v) above and shall deliver to Buyer a
certificate setting forth such amount and all calculations and documentation
in reasonable detail necessary to support them. Within two business days
following delivery of such certificate, Seller shall pay Buyer in cash in
immediately available funds (or Buyer shall pay Seller, as applicable) the
difference between the amount set forth in such certificate and the amount
paid by Buyer to Seller on the Closing Date pursuant to Section 1.4(a)(v),
provided that the payments by Buyer pursuant to such Section 1.4(a)(v) and
this Section 1.7(d), together with the payments by Buyer pursuant to Section
1.4(a)(v) and Section 1.7(d) of the Jonesboro Purchase Agreement, shall in no
event exceed $265,000 in the aggregate.
1.8 FUEL DISPOSAL ELECTION. Not later than May 15, 1995, Seller
shall provide Buyer a summary of the terms and conditions to be applicable to
any undertaking by Buyer to dispose of the fuel described in Section
1.4(a)(i). If Buyer wishes to undertake such disposal, Buyer shall negotiate
with and deliver to Seller no later than May 23, 1995 a written undertaking
to such effect substantially on the terms and conditions provided by and
otherwise in form and substance reasonably acceptable to Seller.
1.9 DELIVERIES BY SELLER ON THE UNDERWRITING DATE. In the event
Buyer shall finance all or a portion of the Purchase Price with an offering
of debt securities, Seller shall deliver to Buyer the following not later
than 12:01 p.m., prevailing New York time, on the date Buyer proposes to
execute and deliver a purchase contract with respect to such securities (the
"Underwriting Date"); provided that Buyer shall have given Seller five
business days prior written notice of such Underwriting Date:
(i) a certificate, dated as of the Underwriting Date and signed by
an officer of each partner of Seller, on behalf of such partner, to the
effect that each of the representations and warranties of Seller made in
this Agreement, insofar as concerns such partner, and, to the best of
such partner's knowledge, insofar as concerns Seller, are true and
correct in all material respects on the Underwriting Date;
(ii) an amendment to Schedule 6.3(b), if required, setting forth
any additional claims of Seller under the Power Purchase Agreement
arising from the Effective Date (as hereinafter defined) of this
Agreement to the Underwriting Date which shall survive the consummation
of the sale described in Section 1.1 hereof in accordance with Section
6.3(b) of this Agreement; and
(iii) evidence satisfactory to Buyer that the releases and
discharges described in Section 3.3 hereof shall have been delivered to
the Escrow Agent under the Escrow Agreement hereinafter described.
1.10 ESCROW AGREEMENT. Seller and Buyer agree to execute and
deliver, on or prior to the Underwriting Date, the Escrow Agreement
hereinafter referred to in form and substance reasonably satisfactory to both
Seller and Buyer with an escrow agent reasonably satisfactory to both Seller
and Buyer.
ARTICLE 2
CONDITIONS TO BUYER'S OBLIGATIONS
The obligation of Buyer to consummate the Closing on the Closing
Date is subject to the satisfaction (or waiver by Buyer), on or before the
Closing Date, of each of the conditions set forth below. Each document
required to be delivered on the Closing Date pursuant to this Article 2 shall
be delivered in escrow pursuant to an escrow agreement (the "Escrow
Agreement") which shall provide for the release of all such documents on the
first date after the Closing Date on which the Loans may be prepaid in full
pursuant to the Loan Agreement (the "Escrow Release Date").
2.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Seller contained herein and in all certificates and other
documents and agreements delivered by Seller to Buyer pursuant hereto or in
connection with the transactions contemplated hereby shall be true and
accurate in all material respects as of the date hereof and as of the Closing
Date.
2.2 PERFORMANCE. Seller shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it and shall have
delivered all items required to be delivered pursuant to Section 1.6 by it on
or prior to the Closing Date.
2.3 FINANCING. Buyer shall have obtained the financing, on terms
reasonably satisfactory to Buyer, necessary to pay the Purchase Price and the
payments set forth in Section 1.4(a) above (other than Section 1.4(a)(ii)) on
the Closing Date, which financing shall have been approved by the Maine
Public Utilities Commission ("MPUC") on terms and conditions reasonably
satisfactory to Buyer.
2.4 CONSENTS. Buyer shall have obtained, on terms reasonably
satisfactory to Buyer, any required consents of its lenders under its
revolving credit borrowing arrangements.
2.5 OTHER MPUC APPROVALS. (a) Buyer shall have obtained such
orders or decrees of the MPUC as may be necessary in order to establish the
costs of its performance under this Agreement as assets under generally
accepted accounting principles and to recover such costs and amortize such
assets through rates to customers over such period or periods as may be
reasonably acceptable to Buyer and (b) Buyer shall, at its option, have
secured a certificate of approval for an electric rate stabilization
agreement pursuant to 35-A Me. Rev. Stat. Ann. Section 3156.
2.6 UNITIL AGREEMENT. The agreement between Buyer and UNITIL
Power Corp. ("UNITIL") amending that portion of the Power Sales Agreement
(the "UNITIL Agreement") between Buyer and UNITIL dated as of March 26, 1986
relating to the resale of energy and capacity from the Facility shall have
been approved by the Federal Energy Regulatory Commission.
2.7 NO LITIGATION. No litigation whose subject matter relates to
any of the transactions contemplated by this Agreement shall be pending or
threatened before any court or regulatory agency the outcome of which, in the
reasonable opinion of Buyer, could materially adversely affect the ability of
Buyer to consummate such transactions or to recover the payments made to
Seller in its rates.
2.8 JONESBORO. On the Closing Date, there shall have been
consummated in accordance with the agreement of even date herewith (the
"Jonesboro Purchase Agreement") between Buyer and Babcock-Ultrapower
Jonesboro, a joint venture organized under the laws of California, the sale
to the Buyer of all right, title and interest of Babcock-Ultrapower Jonesboro
in and to the Power Purchase Agreement, dated as of August 13, 1984, as
amended to date, regarding the wood-fired small power production facility
located in Jonesboro, Maine.
2.9 SCHEDULE 6.3(B). Any claims under the Power Purchase Agreement
which Seller shall have proposed to add to Schedule 6.3(b) after the
Underwriting Date shall be reasonably satisfactory to Buyer.
ARTICLE 3
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to consummate the Closing on the Closing
Date is subject to the satisfaction (or waiver by Seller), on or before the
Closing Date, of each of the conditions set forth below. Each document
required to be delivered on the Closing Date pursuant to this Article 3 and
each payment to be made on the Closing Date pursuant to Article 1.2(a) shall
be delivered or made, as the case may be, in escrow pursuant to the Escrow
Agreement which shall provide for the release of all such documents and such
payments on the Escrow Release Date and which shall also provide that any
interest earned on amounts held pursuant to the Escrow Agreement shall be
paid to Seller on the Escrow Release Date.
3.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Buyer contained herein and in all certificates, agreements and
other documents delivered by Buyer to Seller pursuant hereto or in connection
with the transactions contemplated herein shall be true and accurate in all
material respects as of the date hereof and as of the Closing Date.
3.2 PERFORMANCE. Buyer shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it including, without
limitation, payment of the Purchase Price and the payments set forth in
Section 1.4(a) above and shall have delivered all items required to be
delivered pursuant to Section 1.5 by it on or prior to the Closing Date.
3.3 TERMINATION AND RELEASE. (a) Seller shall have received a
release and discharge executed by the Agent and (if necessary) the Banks,
reasonably satisfactory in form and substance to Seller, whereby Seller is
released from and discharged of its obligations under the Loan Agreement, the
Security Documents and the Notes (each as defined in the Loan Agreement), and
such release and discharge shall provide that the Agent and the Banks shall
have released to Seller and otherwise discharged all mortgages, liens,
security interests and encumbrances on any property of the Seller whatsoever
(including without limitation, permits, goods, equipment, intangibles and
deposit accounts) entered into or obtained by the Agent and the Banks in
connection with Seller's obligations under the Loan Agreement, the Security
Documents and the Notes.
(b) On the Closing Date, Seller shall have received satisfactory
assurances of payment in cash in immediately available funds on the Escrow
Release Date of an amount equal to the balance to be on deposit on the Escrow
Release Date, and all accrued interest thereon, in accounts held as cash
collateral and/or reserve accounts in connection with the Loan Agreement
and/or the Security Documents.
3.4 TRANSMISSION AGREEMENT. Seller and Buyer shall have entered
into an agreement on terms and conditions reasonably satisfactory to Seller
for the transmission of power generated at the Facility from the Facility to
points at which Buyer's transmission system interconnects with the
transmission system of other electric utilities for the purpose of enabling
Seller (or any successor owner or user of the Facility) to compete for the
sale of capacity and energy to other utilities in the bulk power supply
market, or (except to the extent such restriction is prohibited by law) to
entities that are not retail customers of Buyer. Such agreement shall
provide for such transmission services at non-discriminatory rates
customarily available among electric utilities. To the extent that the
approval of the Federal Energy Regulatory Commission or other governmental
agency is required as a condition to the effectiveness of such agreement, at
Seller's request and upon payment by Seller to Buyer of any required filing
fee, Buyer will use its best efforts to obtain the requisite approval; such
approval, however, is not a condition to Seller's obligations to consummate
the Closing on the Closing Date.
3.5 SPECIAL FACILITIES. Seller and Buyer shall have entered into
an agreement, on terms and conditions reasonably satisfactory to Seller and
no less favorable to Seller than under the Agreement for Installation of
Special Facilities for Parallel Operation Between Bangor Hydro-Electric
Company and Babcock-Ultrapower West Enfield (the "Special Facilities
Agreement") in effect as of the date of this Agreement, providing for the
continued use of the Special Facilities (as defined in the Special Facilities
Agreement) by Seller (or any successor owner or user of the Facility). To
the extent that the approval of the MPUC or other governmental agency is
required as a condition to the effectiveness of such agreement, at Seller's
request, Buyer will use its best efforts to obtain the requisite approval;
such approval, however is not a condition to Seller's obligation to
consummate the Closing on the Closing Date. In the absence of such approved
agreement, Buyer will make the Special Facilities available to Seller (and
any such successor) pursuant to the applicable industrial tariff in effect
from time to time.
3.6 DISPATCH SERVICES AGREEMENT. Seller and Buyer shall have
entered into an agreement, on terms and conditions reasonably satisfactory to
Seller, requiring Buyer to provide dispatch services to Seller (or any
successor owner or user of the Facility) to allow Seller or such successor to
sell energy and capacity into northeastern power markets. To the extent that
the approval of the Federal Energy Regulatory Commission or other
governmental agency is required as a condition to the effectiveness of such
agreement, at Seller's request and upon payment by Seller to Buyer of any
required filing fee, Buyer will use its best efforts to obtain the requisite
approval; such approval, however, is not a condition to Seller's obligation
to consummate the Closing on the Closing Date.
3.7 STATION SERVICE RATE AGREEMENT. Seller and Buyer shall have
entered into an agreement, on terms and conditions and at a rate reasonably
satisfactory to Seller, providing for the supply of electric power by Buyer
to the Facility (notwithstanding any subsequent change in ownership of the
Facility). To the extent that the approval of the MPUC or other governmental
agency is required as a condition to the effectiveness of such agreement, at
Seller's request, Buyer will use its best efforts to obtain the requisite
approval; such approval, however, is not a condition to Seller's obligation
to consummate the Closing on the Closing Date. In the absence of such
approved agreement, Buyer will make electric power available to the Facility
at rates and pursuant to terms and conditions on file with the MPUC.
3.8 JONESBORO. On the Closing Date, there shall have been
consummated in accordance with the Jonesboro Purchase Agreement, the sale to
the Buyer of all right, title and interest of Babcock-Ultrapower Jonesboro in
and to the Power Purchase Agreement, dated as of August 13, 1984, as amended
to date, regarding the wood-fired small power production facility located in
Jonesboro, Maine.
3.9 NO LITIGATION. No litigation whose subject matter relates to
any of the transactions contemplated by this Agreement shall be pending or
threatened before any court or regulatory agency the outcome of which, in the
reasonable opinion of Seller, could materially adversely affect the ability
of Seller to consummate such transactions.
3.10 SCHEDULE 6.3(B). Any claims under the Power Purchase
Agreement which Buyer shall have proposed to add to Schedule 6.3(b) after the
Underwriting Date shall be reasonably satisfactory to Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller on the date hereof
and as of the Closing Date as follows:
4.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maine and has
the full corporate power and authority to carry on its business as it is now
being conducted.
4.2 AUTHORIZATION. Buyer has the full corporate power and
authority to enter into this Agreement, the Assignment and the agreements
referred to in Sections 3.4 through 3.7 hereof (such agreements referred to
in Sections 3.4. through 3.7 hereof collectively, the "Post-PPA Agreements")
and to perform its obligations hereunder and thereunder. Buyer's execution,
delivery and performance of this Agreement have been, and Buyer's execution,
delivery and performance of the Assignment, the Post-PPA Agreements and all
other documents or instruments incidental thereto will have been, prior to
the execution thereof, approved by all necessary corporate action on the part
of Buyer. Except where governmental approvals for Post-PPA Agreements may be
required as noted in Sections 3.4 through 3.7, this Agreement is, and the
Assignment and the Post-PPA Agreements, when executed and delivered, will be,
the valid and binding obligations of Buyer enforceable in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally and by general principles of equity, regardless of whether such
equitable principles are considered in a proceeding at law or in equity.
4.3 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES AND THIRD
PARTIES. Except for the approval of the MPUC referred to in Section 2.3
above and approvals described in Sections 3.4 to 3.7 with respect to the
Post-PPA Agreements, no consent, approval or authorization of, or
declaration, filing or registration with, any court or governmental or
regulatory authority or any other third party is required to be made or
obtained by Buyer in connection with the execution, delivery and performance
of this Agreement, the Assignment or the Post-PPA Agreements. As of the
Closing Date, the MPUC approval referred to in the preceding sentence has
been obtained. Any stocks, bonds, notes or other evidence of indebtedness
issued or sold or to be issued or sold pursuant to or in reliance on and in
accordance with such MPUC approval are and shall be valid, binding and
enforceable in accordance with their terms, including the terms of any
agreement, instrument or document under or pursuant to which the stocks,
bonds, notes or other evidences of indebtedness are issued.
4.4 LITIGATION. No actions, claims, proceedings, suits,
investigations, orders to show cause, notices of violation or notices of
apparent liability or forfeiture are pending, or to the best knowledge of
Buyer threatened, against Buyer questioning or challenging the validity of
this Agreement, the Assignment or the Post-PPA Agreements or any action taken
or proposed to be taken by Buyer pursuant hereto or in connection with the
transactions contemplated hereby or thereby.
4.5 NO VIOLATION. Subject to any necessary consents of Buyer's
lenders referred to in Section 2.4 above, Buyer's execution, delivery and
performance of this Agreement, the Assignment or the Post-PPA Agreements will
not violate or conflict with, or require a consent or result in a default or
event of default under, any material contract, agreement, note, mortgage or
indenture, or any judgment, order or decree, to which Buyer is a party or by
which it or its assets are bound. As of the Closing Date, the lenders'
approval referred to in the preceding sentence has been obtained.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer on the date hereof
and as of the Closing Date as follows:
5.1 ORGANIZATION. Seller is a joint venture formed as a general
partnership duly organized, validly existing and in good standing under the
laws of the State of California and has the full partnership power and
authority to carry on its business as it is now being conducted.
5.2 AUTHORIZATION. Seller has the full power and authority to
enter into this Agreement, the Assignment and the Post-PPA Agreements and to
perform its obligations hereunder and thereunder. Seller's execution,
delivery and performance of this Agreement have been, and Seller's execution,
delivery and performance of the Assignment and the Post-PPA Agreements will
have been, prior to the execution thereof, approved by all necessary
partnership action on the part of Seller and by all corporate and partnership
action on the part of its partners. This Agreement is, and the Assignment
and the Post-PPA Agreements, when executed and delivered, will be, the valid
and binding obligations of Seller enforceable in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency and other similar laws affecting creditors' rights generally and
by general principles of equity, regardless of whether such equitable
principles are considered in a proceeding at law or in equity.
5.3 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except
for any approvals described in Sections 3.4 to 3.7 with respect to the Post-
PPA Agreements, no consent, approval or authorization of, or declaration,
filing or registration with, any court or governmental or regulatory
authority is required to be made or obtained by Seller in connection with its
execution, delivery and performance of this Agreement, the Assignment or the
Post-PPA Agreements.
5.4 LITIGATION. No actions, claims, proceedings, suits,
investigations, orders to show cause, notices of violation or notices of
apparent liability or forfeiture are pending, or to the best knowledge of
Seller threatened, against Seller questioning or challenging the validity of
this Agreement, the Assignment or the Post-PPA Agreements or any action taken
or proposed to be taken by Seller pursuant hereto or in connection with the
transactions contemplated hereby or thereby.
5.5 NO VIOLATION. Subject to consent of the Agent and the Banks
under the Loan Agreement, Seller's execution, delivery and performance of
this Agreement, the Assignment or the Post-PPA Agreements will not violate or
conflict with, or require the consent or result in a default or event of
default under, any material contract, agreement, note, mortgage or indenture,
or any judgment, order or decree to which Seller is a party or by which it or
its assets are bound.
ARTICLE 6
MISCELLANEOUS PROVISIONS
6.1 TRANSACTION COSTS. (a) Buyer shall be responsible for all
out-of-pocket costs and expenses incurred by or on behalf of Buyer in
connection with this Agreement, including the fees and costs of its counsel,
and shall also be responsible for fees and costs of counsel to Seller
reasonably incurred in connection with this Agreement and the transactions
contemplated hereby and of counsel to the Agent and the Banks (to the extent
that Seller determines it is responsible for such fees and costs under the
Loan Agreement and the Security Documents) incurred in connection with this
Agreement and the transactions contemplated hereby, in each case whether or
not the Closing occurs. In addition, Buyer shall be responsible for the
travel expenses and out-of-pocket costs of Seller and each partner of Seller
incurred in connection with this Agreement and the transactions contemplated
hereby to the extent such costs exceed $15,000, whether or not the Closing
occurs. Buyer shall also be responsible for all amendment, prepayment,
breakage, termination, up-front, commitment or other Bank fees or costs or
expenses payable in connection with the payment of the obligations of the
Seller under the Loan Agreement as of the Escrow Release Date and the
incurrence by Buyer of new debt in connection with the transactions
contemplated hereby.
(b) This obligation shall survive the Closing or any termination
of this Agreement, and Buyer shall pay such fees, costs and expenses (i)
within 15 days after receipt of invoices submitted to Buyer by Seller
(together with such supporting data in reasonable detail and such supporting
documentation as may be reasonably available to Seller) as such fees, costs
and expenses are incurred, and (ii) at the Closing to the extent they are
known and are the subject of invoices provided to Buyer pursuant to Section
1.4(a)(iv) hereof.
6.2 TERMINATION. This Agreement may be terminated at any time by
the mutual agreement of Seller and Buyer, and will terminate at 12:01 A.M.
(New York time) on September 16, 1995 unless extended by mutual agreement of
Seller and Buyer.
6.3 SURVIVAL. (a) All covenants, agreements, representations,
and warranties made by the parties to this Agreement or in any agreement,
document, or instrument executed and delivered pursuant hereto or in
connection with the transactions contemplated hereby shall survive the
Closing, to the extent of and in accordance with their terms.
(b) From and after the Closing Date and notwithstanding the
consummation of the sale described in Section 1.1 hereof, all rights of Buyer
and Seller against each other under the Power Purchase Agreement in respect
of any claim of either Buyer or Seller which is described in Schedule 6.3(b)
hereof, or any claim arising during the period from the date hereof until the
Closing Date and which shall be described in Schedule 6.3(b) hereof as
amended as of the Closing Date, shall survive and be preserved for further
action by Buyer or Seller in accordance with the terms of the Power Purchase
Agreement as in effect on the date hereof and applicable law.
6.4 TAX INDEMNIFICATION. (a) Buyer hereby agrees to indemnify and
hold Seller and each partner of Seller (each, a "Tax-Indemnified Party")
harmless on an After-Tax Basis from and against any and all taxes, fees,
duties, impost, levies or charges of whatsoever nature (other than taxes of
general applicability based on income) imposed by the State of Maine or any
political subdivision thereof or any taxing authority of such State or
political subdivision and all interest, penalties or similar liabilities with
respect thereto (any such amounts, "Taxes") solely as a result of any payment
made or to be made by Buyer to Seller pursuant to this Agreement or as a
result of the purchase and sale of Seller's right, title and interest in and
to the Power Purchase Agreement as contemplated by this Agreement but only to
the extent such Taxes are imposed as a result of a Change in Law after the
date of this Agreement. Buyer agrees to pay (or reimburse such Tax-
Indemnified Party for payment of) any and all Taxes within 45 days of the
date on which such Tax-Indemnified Party delivers to Buyer the documentation
required by the immediately succeeding paragraph.
Each Tax-Indemnified Party will (i) notify Buyer in writing within
five business days of such Tax-Indemnified Party's receipt of an assessment,
notice or request for payment of any such Tax from a taxing authority, and
(ii) supply to Buyer not less than twenty business days in advance of the due
date therefor calculations, documentation and forms of returns (or, at the
option of such Indemnified Party, pertinent portions of or excerpts from such
returns) demonstrating the nature, amount and calculation of any Tax which
such Tax-Indemnified Party believes Buyer is obligated to pay pursuant to
this Section. In no event will Buyer be obligated to pay interest, penalties
or late charges due as a result of a Tax-Indemnified Party's failure to file
returns or make Tax payments within the time periods required by law unless
such failure is the result of the action or inaction of Buyer. Failure of a
Tax-Indemnified Party to provide any notice or other item to Buyer as
described in this paragraph by the time specified in this or the immediately
succeeding paragraph shall not, however, affect such Tax-Indemnified Party's
right to indemnification as provided in the first paragraph of this Section
6.4(a).
Each Tax-Indemnified Party will promptly notify Buyer of any event
which such Tax-Indemnified Party believes constitutes or may constitute a
Change of Law promptly after becoming aware thereof. Buyer may, at its
option, require such Tax-Indemnified Party, with funds provided by Buyer, to
make any payment of Tax pursuant to this Section under protest and may at
Buyer's sole expense contest the assessment or calculation of such Tax before
the relevant taxing authority. Each Tax-Indemnified Party agrees to Buyer
exercising direction and control of any such protest and any related
proceeding, and will provide reasonable cooperation at Buyer's request and
sole expense in the conduct thereof.
(b) For purposes of Section 6.4(a) above, (i) "Change in Law"
shall mean any finally adopted change in law, rule or regulation, or official
published interpretation thereof in each instance, and (ii) "After-Tax Basis"
shall mean on a basis such that any payment required to be paid on such basis
shall, if necessary, be supplemented by a further payment so that the sum of
the two payments, after deduction of all taxes, penalties, fines, interest
and other charges resulting from the receipt (actual or constructive) of such
payments imposed by or under any Federal, state or local governmental
authority in the United States or subdivision or any taxing authority of any
thereof (assuming for this purpose that each Tax-Indemnified Party is a tax-
paying entity in the State of Maine subject to the maximum applicable
corporate income tax rates then in effect), and after taking into account all
related tax savings (whether by deduction, credit or otherwise) actually
realized as a result of such payments or the event or circumstance giving
rise thereto, shall be equal to the payment so required.
(c) Each Tax-Indemnified Party agrees not to actively support the
adoption of any Change in Law to which the indemnification contained in this
Section 6.4 would apply and further agrees that none of its affiliates shall
do so. In addition, each partner of Seller agrees that at the request and at
the expense of Buyer it will use reasonable efforts to assist in any
challenge to any such Change in Law.
6.5 GENERAL INDEMNIFICATION BY BUYER. Buyer shall defend,
indemnify and hold Seller, each partner thereof, and each partner's
directors, officers, employees, agents, attorneys, and affiliates (each, a
"Seller Indemnified Party") harmless at all times against and in respect of
any claim, action, loss, cost, expense, liability, penalty or interest, or
damage (collectively, "Damages") suffered or incurred by such Seller
Indemnified Party, and all other costs and expenses incurred by such Seller
Indemnified Party in necessary investigation or, after notice to Buyer of its
intent to do so, in attempting to avoid or oppose the imposition thereof,
arising out of, relating to, or resulting from, (i) any breach of any
representation, warranty, covenant, or agreement made by Buyer in this
Agreement, or in any agreement, document, or instrument executed and
delivered pursuant to or in connection with the transactions contemplated
hereby or thereby; or (ii) the non-performance or malperformance of any
obligation to be performed on the part of Buyer under this Agreement or in
any agreement (including, without limitation, any agreement entered into
pursuant to Section 1.8 hereof), document or instrument executed and
delivered pursuant hereto or in connection with the transactions contemplated
hereby or thereby; PROVIDED that Buyer shall not be obligated to indemnify
any Seller Indemnified Party for any Damages suffered or incurred by such
Seller Indemnified Party as a result of such Seller Indemnified Party's gross
negligence or willful misconduct.
6.6 GENERAL INDEMNIFICATION BY SELLER. Seller shall defend,
indemnify and hold Buyer, and each of Buyer's directors, officers, employees,
agents, attorneys, and affiliates (each, a "Buyer Indemnified Party")
harmless at all times against and in respect of any Damages suffered or
incurred by such Buyer Indemnified Party, and all other costs and expenses
incurred by such Buyer Indemnified Party in necessary investigation or, after
notice to Seller of its intent to do so, in attempting to avoid or oppose the
imposition thereof, arising out of, relating to, or resulting from, (i) any
breach of any representation, warranty, covenant, or agreement made by Seller
in this Agreement, or in any agreement, document, or instrument executed and
delivered pursuant to or in connection with the transactions contemplated
hereby or thereby; or (ii) the non-performance or malperformance of any
obligation to be performed on the part of Seller under this Agreement or in
any agreement, document or instrument executed and delivered pursuant hereto
or in connection with the transactions contemplated hereby or thereby;
PROVIDED that Seller shall not be required to indemnify any Buyer Indemnified
Party for any Damages suffered or incurred by such Buyer Indemnified Party as
a result of such Buyer Indemnified Party's gross negligence or willful
misconduct.
6.7 DEFENSE AGAINST ASSERTED CLAIMS; LIMITATIONS. (a) If any
claim or assertion for Damages is made or asserted against any Seller
Indemnified Party or Buyer Indemnified Party, as applicable, as provided in
Section 6.5 or 6.6, such Seller Indemnified Party or Buyer Indemnified Party
(each hereinafter referred to as an "Indemnified Party") shall with
reasonable promptness give to the other party (the "Indemnifying Party")
written notice of the claim or assertion for Damages and request the
Indemnifying Party to defend the same. The Indemnifying Party shall, at its
expense, assume the defense of such claim or assertion with counsel
reasonably satisfactory to the Indemnified Party. The Indemnified Party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
separate counsel shall be at the expense of the Indemnified Party unless (i)
the engagement of such counsel has been specifically authorized by the
Indemnifying Party in writing, (ii) the Indemnifying Party has failed to
assume the defense of such claim or assertion within ten (10) days after
being notified of such claim, (iii) the named parties to such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party shall have reasonably concluded
that there may be one or more legal defenses available to the Indemnified
Party which are different from or in addition to those available to the
Indemnifying Party, or (iv) such action involves a criminal claim against
such Indemnified Party. In the event the conditions set forth in clause
(iii) of the preceding sentence are met, the Indemnifying Party shall not
have the right to assume the defense of such action on behalf of the
Indemnified Party as to such legal defenses available to the Indemnified
Party which are different from or in addition to those available to the
Indemnifying Party, but shall indemnify the Indemnified Party against all
litigation expenses (including reasonable fees of counsel) in connection with
such defenses. The indemnification to which this Section 6.7 relates shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received (together with such
supporting data in reasonable detail and such supporting documentation as may
be reasonably available to the Indemnified Party) or loss, damage, liability,
cost, or expense is incurred; PROVIDED, that no settlement or compromise of
any claim asserted or action commenced in respect of which the Indemnifying
Party will be liable in accordance with its indemnity under this Agreement
shall give rise to liability of such Indemnifying Party unless such
Indemnifying Party shall have been notified in writing of the proposed
settlement or compromise and shall have consented in writing thereto, which
consent shall not be unreasonably withheld so long as any claims which have
been or may be asserted against the Indemnifying Party in such action or any
related or future action are to be released with prejudice in connection with
such settlement or compromise, it being understood, however, that in the
event the Indemnifying Party unreasonably withholds its consent to a
settlement or compromise as to which it has agreed above that such consent
shall not be unreasonably withheld, the Indemnified Party may proceed to
consummate such settlement or compromise without the consent of the
Indemnifying Party and may pursue its indemnification claims hereunder
against the Indemnifying Party as provided herein in respect of the cost of
such settlement or compromise. Buyer and Seller will cooperate with each
other and shall take reasonable measures to obtain the cooperation of
Seller's Indemnified Parties and Buyer's Indemnified Parties, as applicable,
in the defense of any action and the relevant records of each shall be
available to the other with respect to such defense.
(b) In no event shall either party be liable to any Idemnified
Party (as defined in Section 6.7) for any consequential, special, indirect or
incidental damages, or loss of profits, cost of money, claims of customers or
claims of financiers, or any amounts in settlement thereof, howsoever the
same may be caused, in connection with any claim arising under this Agreement
except to the extent any of the foregoing are included in a third party claim
against a Seller Indemnified Party or Buyer Indemnified Party, as the case
may be, to which the provisions of Section 6.5 or 6.6 apply. In addition,
each Seller Indemnified Party and each Buyer Indemnified Party shall use
reasonable efforts to mitigate any Damages which may be the subject of an
indemnification claim by it pursuant to Section 6.5 or 6.6 hereof, as
applicable.
6.8 CONDUCT PRIOR TO CLOSING. During the period from the date of
this Agreement to the Closing Date, (i) Buyer shall confer on a regular and
frequent basis with one or more representatives of Seller to report on the
status of the various conditions set forth in Article 2 hereof, (ii) Seller
agrees to provide reasonable cooperation to Buyer in connection with the
possible minimization of the amounts payable pursuant to Section 1.4(a)(iii)
hereof, and (iii) promptly upon learning thereof, each of Buyer and Seller
shall notify the other of any breach of any representation or warranty set
forth in Section 4 or Section 5 hereof.
6.9 NOTICES. All notices, requests or other communications
required or permitted hereunder shall be given in writing and shall be deemed
to have been duly given, if delivered in hand, on the date of receipt (or
refusal), or if given by Federal Express or similar nationally recognized
expedited overnight commercial courier, when delivered to Federal Express or
similar nationally recognized expedited overnight commercial courier,
addressed to the recipient of the notice, with all freight charges paid, or
if given by facsimile transmission, when sent, to the following addresses and
facsimile numbers:
If to Seller, to:
Babcock & Wilcox West Enfield Power, Inc.
20 South Van Buren Avenue
Barberton, Ohio 44203
Facsimile: 216-860-1868
Attention: Vice President, Operations
and
ESI West Enfield Limited Partnership
c/o ESI Energy, Inc.
1400 Centrepark Boulevard, Suite 600
West Palm Beach, Florida 33401
Facsimile: (407) 687-4932
Attention: Vice-President, Business Management
and
L.G.& E. Power 5 Incorporated
2030 Main Street, 12th Floor
Irvine, California 92714
Facsimile: (714) 955-4333
Attention: President
If to Buyer, to:
Bangor Hydro-Electric Company
P.O. Box 932
33 State Street
Bangor, ME 04402-0932
Facsimile: 207-990-6963
Attention: Robert S. Briggs, President
or to such other address or number as any party may have designated for
itself by written notice to the other in the manner herein prescribed, except
that notices of change of address shall be effective only upon receipt.
6.10 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other party and any
assignment made absent such consent shall be void AB INITIO.
6.11 GOVERNING LAW. This agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance
with the laws of the State of Maine.
6.12 COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
6.13 HEADINGS. The headings contained in this Agreement are
inserted for convenience only and are not intended to be determinative or
interpretive of the substance of this Agreement.
6.14 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties,
covenants or undertakings other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof.
6.15 EFFECTIVENESS. This Agreement shall become effective on the
date (the "Effective Date") on which (i) Seller and Buyer shall have signed a
copy hereof (whether the same or different copies), (ii) Buyer shall have
delivered to Seller instruments with the same substantive effect as those
required by Sections 1.5(ii) and (iii) to be delivered by Buyer on the
Closing Date, (iii) Seller shall have delivered to Buyer instruments with the
same substantive effect as those required by Sections 1.6(ii) and (iii) to be
delivered by Seller on the Closing Date, and (iv) Seller shall have received
any necessary consent of the Agent and the Banks under the Loan Agreement to
its execution and delivery of this Agreement.
6.16 CONDITIONS PRECEDENT. Seller and Buyer agree to use
reasonable efforts to satisfy, on or prior to the Closing Date, the
conditions precedent to their respective obligations to consummate the
Closing set forth in Article 2 and Article 3 hereof.
6.17 FUEL PURCHASE. Except as provided herein, Seller shall not
purchase any fuel for use at the Facility unless Buyer shall have consented
to such purchase. Seller may purchase fuel without Buyer's consent provided
that Buyer shall not be obligated pursuant to Section 1.4(a)(i) and Section
1.7(b) to pay the book inventory value or disposal cost of any such fuel
purchased without its consent. Any impairment of Seller's ability to comply
with the Power Purchase Agreement as a result of the operation of this
Section 6.17 shall not be the basis for any claim of a default on the part of
the Seller under the Power Purchase Agreement.
6.18 DISCLOSURE. Each of Seller and Buyer agrees that the terms of
this Agreement may be disclosed to any regulatory agency which has
jurisdiction over Seller, Buyer, or any of their respective affiliates, to
any of their respective lenders, in any filings under the securities laws, in
any disclosure document delivered to its shareholders or in connection with
any offering of its securities.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY,
By: /s/ Robert S. Briggs
-----------------------
Name:
Title:
BABCOCK-ULTRAPOWER WEST ENFIELD,
a California general partnership
By: L.G.& E. POWER 5
INCORPORATED,
its general partner
By: /s/ Scott Noll
-----------------
Name:
Title:
By: ESI WEST ENFIELD LIMITED
PARTNERSHIP,
a Delaware Limited
Partnership
By: ESI WEST ENFIELD,
INC.,
its general partner
By: /s/ Lori Bonilla
-------------------
Name:
Title:
By: BABCOCK & WILCOX WEST
ENFIELD POWER, INC.,
its general partner
By: /s/ Jack M. Arnold
--------------------
Name:
Title:
EXHIBIT A
to Purchase Agreement
ASSIGNMENT OF POWER PURCHASE AGREEMENT
THIS ASSIGNMENT OF POWER PURCHASE AGREEMENT (this "Assignment") is
made and entered into as of [closing date] by and between BABCOCK-ULTRAPOWER
WEST ENFIELD, a joint venture formed as a California general partnership (the
"Assignor"), and BANGOR HYDRO-ELECTRIC COMPANY, a Maine corporation (the
"Assignee").
W I T N E S S E T H :
WHEREAS, the Assignor and the Assignee are parties to the Power
Purchase Agreement dated as of August 13, 1984 (as amended to date, the
"Power Purchase Agreement");
WHEREAS, the Assignor has agreed to sell to the Assignee and the
Assignee has agreed to purchase all of Assignor's right, title and interest
in and to the Power Purchase Agreement on the terms and conditions set forth
in the Purchase Agreement dated as of March 31, 1995 (the "Purchase
Agreement") by and between the Assignor and the Assignee; and
WHEREAS, it is a condition to the obligations of the parties under
the Purchase Agreement that this Assignment be executed and delivered;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT. The Assignor hereby sells, assigns, transfers,
conveys and delivers to the Assignee, without recourse (except for any
misrepresentation regarding the subject matter stated in the immediately
succeeding sentence) to the Assignor and without any warranty to the
Assignee, either express or implied, as to any matter whatsoever and without
representation except as herein expressly made, and the Assignee hereby
purchases from the Assignor, all of the Assignor's right, title and interest
in and to the Power Purchase Agreement (the "Interest"). The Assignor and
each partner of the Assignor represent to the Assignee that the Assignor is
the sole owner of the Interest herein conveyed and that such Interest of the
Assignor is free and clear of all liens, security interests, claims or
encumbrances whatsoever.
2. RELEASE OF CLAIMS. Except with respect to any claims which
are to survive the execution and delivery of this Assignment and the
consummation of the transactions contemplated by the Purchase Agreement
pursuant to the terms of Section 6.3(b) of the Purchase Agreement, the
Assignor and each partner of the Assignor hereby release the Assignee, its
officers, directors, employees, agents and affiliates, and the Assignee
hereby releases the Assignor, each partner of the Assignor and each partner's
officers, directors, employees, agents and affiliates, fully, finally, and
forever from all claims (known or unknown) which have been or could be
asserted by the parties hereto arising out of, under or in connection with
the Power Purchase Agreement under the statutory or common law of any
jurisdiction, including, without limitation, any and all manner of actions,
causes of action, suits, damages, sums of money, controversies, agreements,
promises, court costs, judgments, attorneys' fees, claims for exemplary or
punitive damages, claims for consequential damages, and all claims and
demands of whatever type in law or in equity, which any party to this
Assignment ever had, now has or which any party to this Assignment hereafter
can, shall or may have for, upon, or by reason of the Power Purchase
Agreement.
3. CAPITALIZED TERMS. All capitalized terms not otherwise
defined in this Assignment shall have the meanings ascribed to such terms in
the Purchase Agreement.
4. COUNTERPARTS. This Assignment may be executed in several
counterparts each of which shall constitute but one and the same instrument.
5. GOVERNING LAW. This Assignment shall be governed by and
construed in accordance with the laws of the State of Maine.
6. AMENDMENTS. This Assignment shall not be amended except by an
instrument in writing executed by the parties through their duly authorized
representatives.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
to be duly executed as of the day and year first written above.
BABCOCK-ULTRAPOWER WEST ENFIELD,
a general partnership, as Assignor
By: L.G.& E. POWER 5 INCORPORATED,
its general partner
By:_______________________
Name:
Title:
By: ESI WEST ENFIELD LIMITED
PARTNERSHIP,
a Delaware Limited
Partnership
By: ESI WEST ENFIELD, INC.,
its general partner
By:_______________________
Name:
Title:
By: BABCOCK & WILCOX WEST ENFIELD
POWER, INC., its general
partner
By:_______________________
Name:
Title:
BANGOR HYDRO-ELECTRIC COMPANY,
a corporation, as Assignee
By________________________
Name:
Title:
EXHIBIT B
[Opinion of Buyer's Counsel]
[Closing date]
re 24.5 MW Production Facility
in West Enfield, Maine
Babcock & Wilcox West Enfield Power, Inc.
20 South Van Buren Avenue
Barberton, Ohio 44203
ESI West Enfield Limited Partnership
c/o ESI Energy, Inc.
1400 Centrepark Boulevard, Suite 600
West Palm Beach, Florida 33401
L.G.& E. Power 5 Incorporated
2030 Main Street, 12th Floor
Irvine, California 92714
Ladies and Gentlemen:
I am General Counsel and Corporate Clerk of Bangor Hydro-Electric
Company ("Buyer"), a Maine corporation, and have acted as its counsel in
connection with the execution and delivery of the Purchase Agreement dated as
of March 31, 1995 (the "Agreement") by and between Babcock-Ultrapower West
Enfield ("Seller"), a joint venture formed as a California general
partnership, and Buyer relating to the Power Purchase Agreement, dated as of
August 13, 1984, as amended, by and between Seller and Buyer. All
capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to such terms in the Agreement.
In rendering this opinion, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals
and the conformity to authentic original documents of all documents submitted
to me as certified, conformed or photostatic copies.
I have examined and relied upon such documents, corporate records,
certificates of corporate officers and representatives and other instruments
and legal matters as I have deemed necessary for the purposes of the opinions
expressed herein.
Based upon the foregoing, it is my opinion that:
1. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maine. Buyer has full corporate
authority and power to enter into the Agreement, the Post-PPA Agreements and
the Assignment and to perform its obligations thereunder.
2. Except for such approvals with respect to the Post-PPA
Agreements as are set forth in the Agreement, no consent, order,
authorization, waiver, approval or any other action by, or registration,
declaration or filing with, any person, board or body, public or private, is
required for Buyer to enter into the Agreement, the Post-PPA Agreements or
the Assignment or for Buyer to perform, and to be legally bound to perform,
its obligations thereunder.
3. The Agreement, the Post-PPA Agreements and the Assignment have
been duly and validly authorized by all requisite action on the part of
Buyer, have been duly and validly executed and delivered by Buyer and,
assuming due authorization, execution and delivery by Seller, constitute the
legal, valid and binding obligations of Buyer, enforceable against it in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency or other similar laws applicable to
creditors' rights generally and except as the availability of any particular
remedy may be limited by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law, and
subject in the case of the Post-PPA Agreements to the receipt of such
approvals as are described in Sections 3.4 through 3.7 of the Agreement.
4. The execution, delivery and performance of the Agreement, the
Post-PPA Agreements and the Assignment will not result in any violation of
the articles of incorporation or by-laws of Buyer or (subject in the case of
the Post-PPA Agreements to the receipt of such approvals as are described in
Sections 3.4 through 3.7 of the Agreement) any existing statute, law,
governmental rule, regulation, decree or order applicable to Buyer or its
properties, or contravene the provisions of or constitute a default under any
material agreement, indenture, mortgage, lease or other instrument to which
it or its property is or may be bound.
5. There is no action, suit, proceeding or investigation at law or
in equity or by or before any court or administrative agency pending or, to
the best of my knowledge threatened against or affecting Buyer which
questions the validity of the Agreement, the Post-PPA Agreements or the
Assignment which, individually or in the aggregate, would have a material
adverse effect upon the ability of Buyer to enter into and carry out its
obligations under the Agreement, the Post-PPA Agreements or the Assignment.
I am a member of the Bar of the State of Maine and express no
opinion as to any laws other than the laws of the State of Maine and the
federal laws of the United States.
I am furnishing this opinion to you solely for your benefit in
connection with the transactions contemplated by the Agreement and this
opinion is not to be used, circulated, quoted or otherwise referred to for
any other purpose without my prior written approval in each instance.
Very truly yours,
EXHIBIT C
Counsel to Seller and counsel to each partner of Seller shall
deliver opinions, dated the Closing Date, to the effect that:
1. Seller is a general partnership duly organized, validly
existing and in good standing under the laws of the State of California.
Seller is fully authorized and empowered to enter into the Agreement, the
Post-PPA Agreements and the Assignment and to perform its obligations
thereunder.
2. No consent, order, authorization, waiver, approval or any other
action by, or registration, declaration or filing with, any person, board or
body, public or private, is required for Seller to enter into the Agreement,
the Post-PPA Agreements or the Assignment for Seller to perform, and to be
legally bound to perform, its obligations thereunder.
3. The Agreement, the Post-PPA Agreements and the Assignment have
been duly and validly authorized by all requisite action on the part of
Seller, have been duly and validly executed and delivered by Seller and
constitute the legal, valid and binding obligation of Seller, enforceable
against it in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency or other similar laws
applicable to creditors' rights generally and except as the availability of
any particular remedy may be limited by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
4. The execution, delivery and performance of the Agreement, the
Post-PPA Agreements and the Assignment will not result in any violation of
the partnership agreement of Seller or any existing statute, law,
governmental rule, regulation, decree or order applicable to Seller or its
properties, or contravene the provisions of or constitute a default under any
material agreement, indenture, mortgage, lease or other instrument to which
it or its property is or may be bound.
5. There is no action, suit, proceeding or investigation at law or
in equity or by or before any court or administrative agency pending or, to
the best of our knowledge threatened against or affecting Seller which
questions the validity of the Agreement, the Post-PPA Agreements or the
Assignment which, individually or in the aggregate, would have a material
adverse effect upon the ability of Seller to enter into and carry out its
obligations under the Agreement, the Post-PPA Agreements or the Assignment.
6. Seller is the sole owner of the Interest (as defined in the
Assignment) conveyed under the Assignment and such Interest of the Seller is
free and clear of all liens, security interests, claims or encumbrances
whatsoever.
PURCHASE AGREEMENT
Schedule 6.3(b)
DISPUTED ISSUES
West Enfield Facility
OCTOBER 1994 CAPACITY AND
ENERGY BILLINGS AND 1994 BONUS BILLINGS
The facility completed its scheduled 1994 two-week maintenance outage a day
and a half early and, as was the practice in the past, called Bangor Hydro
for a dispatch order to either begin firm generation or curtail generation.
The facility was instructed to curtail generation and received
acknowledgments from the Bangor Dispatch Operators that the units were
accepted back as available for service.
The facility responded to these dispatch orders and Babcock-Ultrapower
expected to receive decremental energy payments for the period commencing
with Bangor's dispatch order; however, Bangor Hydro refused to pay the total
invoiced amounts, claiming that a mandatory full two-week outage was required
and that no decremental payments were due until this period was completed.
Babcock-Ultrapower contends that the maintenance periods were terminated by
Bangor Hydro's dispatch orders, and that these orders were to be relied upon
based on past practices and actions of Bangor Hydro.
The availability of decremental energy during this period also affects
Babcock-Ultrapower's performance payment under the 1994 Bonus Billing.
