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 ▇▇▇▇▇▇▇-Ultrapower West Enfield in the Town of West Enfield,
Maine and between the Borrower and ▇▇▇▇▇▇▇-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 ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Attention: Chief Executive Officer)
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
and
If by overnight courier, to:
Finance Authority of Maine
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Attention: Chief Executive Officer)
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) IF TO THE BORROWER, TO:
Bangor Hydro-Electric Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Attention: Treasurer)
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) IF TO THE TRUSTEE, TO:
First Fidelity Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
ABA #▇▇▇▇▇▇▇▇▇
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
BANGOR HYDRO-ELECTRIC COMPANY
[SEAL] By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Attest:
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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 ▇▇▇▇▇▇▇
- Ultrapower West Enfield and ▇▇▇▇▇▇▇ - 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