Exhibit ▇▇.▇▇
MASTER LOAN AGREEMENT
by and between
FLEET NATIONAL BANK
"Bank"
and
MAINE PUBLIC SERVICE COMPANY
"Borrower"
Dated as of November 22, 2004
TABLE OF CONTENTS
1. INTRODUCTION.............................................................3
2. OBLIGATIONS..............................................................3
3. BORROWER'S PLACES OF BUSINESS............................................3
4. BORROWER'S REPRESENTATIONS AND WARRANTIES................................4
5. LOAN FACILITIES..........................................................6
6. BANK'S REPORTS..........................................................11
7. SET OFF; EXPENSES.......................................................11
8. BORROWER'S REPORTS......................................................12
9. GENERAL AGREEMENTS OF BORROWER..........................................13
10. BORROWER'S NEGATIVE COVENANTS...........................................17
11. BORROWER'S FINANCIAL COVENANTS..........................................17
12. DEFAULT.................................................................20
13. JURY TRIAL WAIVER.......................................................23
14. CONSENT TO JURISDICTION.................................................24
15. TERMINATION AND EXPIRATION NOT TO AFFECT BANK'S RIGHTS..................24
16. MISCELLANEOUS...........................................................24
SCHEDULES
EXHIBIT
FLEET NATIONAL BANK
MASTER LOAN AGREEMENT
Portland, Maine
Dated as of November 22, 2004
1. INTRODUCTION. MAINE PUBLIC SERVICE COMPANY, a Maine corporation with
its principal place of business in Presque Isle, Maine, (hereinafter called
"BORROWER") for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, hereby enters into this
Master Loan Agreement with FLEET
NATIONAL BANK, a Bank of America company with a place of business at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter, together with its
successors and assigns hereunder, called the "BANK").
2. OBLIGATIONS. This Agreement applies to payment and performance of all
debts, liabilities and obligations of the Borrower to the Bank hereunder and
also any and all other debts, liabilities and obligations of the Borrower to the
Bank of every kind and description, direct or indirect, absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising,
that are related to the transactions described in this Agreement, including all
obligations to perform acts and refrain from taking action as well as all
obligations to pay money, specifically including all obligations to pay
interest, fees, charges, expenses and overdrafts, and also including, without
limitation, all obligations and liabilities which the Bank may incur or become
liable for, on account of, as a result of, or in connection with the
transactions between the Bank and the Borrower for which the Borrower is
responsible under this Agreement, including, without limitation, any which may
arise out of any letter of credit, banker's acceptance or similar instrument or
obligation issued or incurred by the Bank for the account of the Borrower, and
further including any obligations arising under any credit card receivables,
currency swap, electronic fund transfers (whether through automated clearing
houses or otherwise) provisional credit, check cashing, foreign exchange
contracts, interest rate swap, cap, floor or hedging agreements, or similar
agreements and all obligations of the Borrower to the Bank arising out of or in
connection with any Automated Clearing House ("ACH") agreements relating to the
processing of ACH transactions, together with all fees, expenses, charges and
other amounts owing by or chargeable to the Borrower under any ACH agreements
(all of the foregoing are hereinafter collectively called "OBLIGATIONS").
3. BORROWER'S PLACES OF BUSINESS. Borrower represents and warrants that it
has no places of business outside the State of Maine, except as otherwise
disclosed herein. Borrower represents and warrants that its only place of
business (or, if it has more than one, its chief executive office) and the
office where it keeps its records, is the place indicated at the end of
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this Agreement. Borrower will promptly notify Bank in writing of any change in
the location of its chief executive office, or of any place of business or
office where its records are kept.
4. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants that:
(a) It is a regulated utility and a corporation duly organized, validly
existing and in good standing under the laws of the State of Maine and shall
hereafter remain in good standing as a corporation in that state, and is duly
qualified and in good standing in every other jurisdiction in which the nature
or location of its assets or operations may require such qualification, other
than any jurisdiction where the failure to so qualify will not have a material
adverse effect on its financial condition, business or prospects, which other
jurisdictions are listed on SCHEDULE A, annexed hereto, and shall hereafter
remain duly qualified and in good standing in every such other jurisdiction.
Borrower has identified on SCHEDULE B, annexed hereto, all of its subsidiaries
and their respective jurisdictions of organization, addresses and the percentage
of ownership. Each of Borrower's subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and shall hereafter remain in good standing as a corporation in
that jurisdiction, and is duly qualified and in good standing in every other
jurisdiction in which, by reason of the nature or location of such subsidiary's
assets or operations, such qualification may be necessary, which other
jurisdictions are listed on SCHEDULE B, annexed hereto, and shall hereafter
remain duly qualified and in good standing in such other jurisdictions. None of
Borrower's subsidiaries has any subsidiaries.
(b) Borrower's exact legal name is as set forth in this Agreement and
Borrower will not change its legal name, without giving Bank at least thirty
(30) days' prior written notice of the same. Borrower represents that it does
not conduct business under any other name, and will not do so without giving
Bank at least thirty (30) days' prior written notice of the same. THE BORROWER'S
CORPORATE CHARTER NUMBER IN THE STATE OF MAINE IS 19170013D.
(c) The execution, delivery and performance of this Agreement, and of
any other documents executed in connection herewith, are within Borrower's
corporate powers, have been duly authorized, are not in contravention of law or
the terms of its articles of incorporation, bylaws or other governance
documents, or of any indenture, agreement or undertaking to which it is a party
or by which it or any of its properties may be bound.
(d) The Articles of Incorporation of Borrower, and all amendments
thereto, have been duly filed and are in proper order. All of Borrower's books
and records including but not limited to its minute books, stock register and
books of account, are all materially accurate and up to date and will be so
maintained. All of Borrower's issued and outstanding stock interests were duly
issued and are fully paid and non-assessable; the Borrower is a wholly-owned
subsidiary of Maine & Maritimes Corporation, a Maine corporation.
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(e) Borrower owns all of the assets reflected in its most recent
financial statements provided to Bank, except leased assets or assets sold,
transferred or otherwise disposed of, in the ordinary course of business since
the date thereof, and such assets together with any assets acquired since such
date, are free and clear of any lien, pledge, security interest, charge,
mortgage or encumbrance of any nature whatsoever, except only the following
(collectively, the "PERMITTED LIENS"): (i) the liens, security interests and
other encumbrances listed on SCHEDULE C annexed hereto, (ii) those leases (if
any) set forth on SCHEDULE D annexed hereto in which Borrower is lessor, (iii)
landlords', carriers', warehousemen's and other similar liens arising by
operation of law in the ordinary course of its business, but only if the bills
to which they relate are paid in the ordinary course or are the subject of good
faith dispute; (iv) liens arising out of pledge or deposits under worker's
compensation, unemployment insurance, old age pension, social security,
retirement benefits or other similar legislation; and (v) liens and security
interests in favor of Bank or consented to in writing by Bank . Borrower leases
no material amount of real or personal property as lessee, except for the leases
described on SCHEDULE D; in each case such lease is in full force and effect and
Borrower is not in material default thereunder.
(f) Borrower has made or filed all tax returns, reports and declarations
relating to any material tax liability required by any jurisdiction to which it
is subject; has paid all taxes shown or determined to be due thereon except
those being diligently contested in good faith and which it has, prior to the
date of such contest, identified in writing to Bank as being contested; and has
made adequate provision for the payment of all taxes so contested, and has also
made adequate provision for taxes due in respect of subsequent periods.
(g) Except for the restrictions, judgments, awards, decrees, orders,
rules and regulations of the Maine Public Utilities Commission that are
applicable to the Borrower, the Borrower (i) is currently subject to no charter
or other legal restriction, or any judgment, award, decree, order, governmental
rule or regulation or contractual restriction which could have a material
adverse effect on its financial condition, business or prospects, and (ii) is in
compliance with its articles of incorporation, bylaws, all contractual
requirements by which it or any of its properties may be bound and all
applicable laws, rules and regulations (including without limitation those
relating to environmental protection) other than laws, rules or regulations (i)
the validity or applicability of which it is diligently contesting in good faith
and which it has, prior to the date of such contest, identified in writing to
Bank as being contested, or (ii) the failure to comply with which cannot
reasonably be expected to materially adversely affect its financial condition,
business or prospects.
(h) There is no action, suit, proceeding or investigation pending or, to
its knowledge, threatened against or affecting Borrower or any of its assets
which, if determined adversely to it, would or could have a material adverse
effect on its financial condition, business or prospects, except as set forth on
SCHEDULE E.
(i) Borrower is in material compliance with ERISA with respect to any
Plan; no Reportable Event has occurred and is continuing with respect to any
Plan; and it has no unfunded
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vested liability under any Plan. The word "PLAN" as used in this Agreement means
any employee plan subject to Title IV of the Employee Retirement Income Security
Act of 1974, as amended, ("ERISA") maintained for employees of Borrower, any
subsidiary of Borrower or any other trade or business under common control with
Borrower within the meaning of Section 414(c) of the Internal Revenue Code of
1986, as amended, or any regulations thereunder.
(j) Borrower is in material compliance with all other applicable
federal, state and local laws and ordinances. Borrower shall maintain at all
times all necessary licenses, permits and approvals to own and operate its
business. If required by Bank, Borrower's counsel shall provide written opinions
regarding these issues.
5. LOAN FACILITIES.
(a) TERM LOAN: On the date hereof, Bank shall advance to Borrower Six
Million Dollars ($6,000,000) (the "TERM LOAN"); the Term Loan will be due on
November 22, 2011, if not due sooner in accordance with the terms hereof (the
"MATURITY DATE"). The Term Loan shall bear interest computed at a fluctuating
interest rate equal to the rate from time to time announced by Bank as its prime
lending rate (the "PRIME RATE"), SUBJECT TO CHANGE OF RATE in accordance with
changes in the Prime Rate, such adjustments in rate to be made automatically and
to be effective immediately with all changes in the Prime Rate without notice or
demand of any kind. Bank's prime rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer. In
the event Bank shall cease to designate a prime rate and shall fail to designate
a replacement therefor, then the term "Prime Rate" shall mean the rate of
interest published in THE WALL STREET JOURNAL as the Prime Rate or the base rate
on corporate loans posted by at least 75% of the nation's 30 largest banks, as
it may vary. The Term Loan shall be repaid in equal monthly installments of
Scheduled Principal (as defined below), plus accrued interest, commencing on
December 1, 2004 and continuing on the same day of each month thereafter until
the Maturity Date when all amounts remaining unpaid with respect to the Term
Loan shall be paid in full. The term "Scheduled Principal" shall mean $50,000
for the monthly principal payments due December 1, 2004, through November 1,
2007, inclusive; $80,000 for the monthly principal payments due December 1, 2007
through November 1, 2009, inclusive; and $95,000 for the monthly principal
payments due December1, 2009 through November 1, 2011, inclusive. Borrower shall
execute and deliver to Bank at the Closing a promissory note with respect to the
Term Loan.
(b) USE OF PROCEEDS: Borrower shall use loan proceeds of the Term Loan
to refinance existing indebtedness and for no other purposes.
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(c) INTEREST RATE OPTION:
(i) At the option of the Borrower and subject to the terms and
conditions hereinafter set forth, the Borrower may elect from time to time
to have the interest rate applicable to one or more advances under the Term
Loan to be the LIBOR Rate, or to convert any outstanding Loan to a Loan of
another Type, PROVIDED that (i) with respect to any such election, or
conversion of a Loan to a LIBOR Loan, the Borrower shall give the Bank
prior notice of such election (which notice must be received by Bank prior
to 3:00 p.m. Portland, Maine time two Business Days before the date of the
advance or conversion); and (ii) no such election of a LIBOR Loan or
conversion to a LIBOR Loan may be made when any Event of Default has
occurred and is continuing. All or any part of an outstanding Loan of any
Type may be converted as provided herein, PROVIDED that partial conversions
shall be in an aggregate principal amount of at least $100,000. There shall
be no more than five LIBOR Loans outstanding at any one time. Each request
relating to a LIBOR Loan shall be irrevocable by the Borrower.
(ii) Any Loans of any Type may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained herein; PROVIDED that no
LIBOR Loan may be continued as such when any Event of Default has occurred
and is continuing, but shall be automatically converted to a Prime Rate
Loan on the last day of the Interest Period relating thereto.
(iii) In the event that the Borrower does not notify the Bank of
its election hereunder with respect to any Loan at the expiration of an
Interest Period, such Loan shall be automatically renewed as a Loan of the
same Type and for the same Interest Period (unless the Loan is a LIBOR Loan
and such a renewal would cause the expiration of the Interest Period to
extend beyond the Maturity Date, in which case such LIBOR Loan shall be
converted to a Prime Rate Loan).
(iv) Unless sooner demanded after an Event of Default, all
interest on LIBOR Loans shall be paid monthly.
(v) Borrower may provide notice of its election hereunder in
writing or by telephone, provided, however, that any telephonic notice
shall follow such procedures as Bank may require and Bank shall have no
duty to confirm the authority of a person making a telephonic request.
(d) PREPAYMENT OF LOANS: The Borrower shall have the right at any time
to prepay any Prime Rate Loan without premium or penalty, PROVIDED that any
amount prepaid shall be accompanied by accrued interest on the principal repaid
to the date of payment. To the extent that a Loan is a LIBOR Loan, and unless
the Bank reasonably determines that current market conditions can not
accommodate a prepayment request, then the Borrower shall have the right to
prepay such Loan on or before the expiration of the applicable Interest Period,
as a whole or in
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part, upon prior notice to the Bank, PROVIDED that such prepayment shall be
accompanied by (a) accrued interest through the date of prepayment, and (b) an
amount calculated in accordance with the Yield Maintenance Formula. Such
optional prepayment privilege is in addition to, and not in substitution of, any
repayment of principal required or otherwise contemplated under this Agreement.
Any payment of a LIBOR Loan that occurs prior to the expiration of the
applicable Interest Period shall be accompanied by an amount calculated in
accordance with the Yield Maintenance Formula whether such payment is payable
because of demand, default or otherwise. Borrower may provide notice of its
election hereunder in writing or by telephone, provided, however, that any
telephonic notice shall follow such procedures as Bank may require and Bank
shall have no duty to confirm the authority of a person making a telephonic
request.
(e) LOAN REQUEST PROCEDURE: Each request to convert some or all of the
Term Loan balance from one Type of Loan to another, shall constitute a request
for a Loan pursuant to which these procedures shall apply. Amounts repaid with
respect to the Term Loan may not be reborrowed. The Borrower may request Loans
hereunder on any Business Day, provided there is then no Event of Default
hereunder; and further provided that Borrower shall give Bank prior notice
(which notice must be received by Bank prior to 3:00 p.m. Portland, Maine time)
on the day (or, in the case of a LIBOR Loan, on the day that is two Business
Days before the day) of the requested advance date specifying: (i) the amount to
be borrowed, (ii) the requested borrowing date, (iii) whether the borrowing is
to be a Prime Rate Loan or a LIBOR Loan or a combination thereof (and if so, in
what proportions), and (iv) if the advance is to be entirely or partly a LIBOR
Loan, the length of the Interest Period. Borrower may provide notice of its
election hereunder in writing or by telephone, provided, however, that any
telephonic notice shall follow such procedures as Bank may require and Bank
shall have no duty to confirm the authority of a person making a telephonic
request. If Borrower's request fails to specify whether a request is for a LIBOR
Loan or a Prime Rate Loan, it shall be deemed a request for a Prime Rate Loan.
If Borrower fails to request the maintenance of an existing LIBOR Loan prior to
the end of the Interest Period for such LIBOR Loan in accordance with the
procedure set forth herein, then such Loan shall be automatically renewed as a
Loan of the same Type and for the same Interest Period (unless such a renewal
would cause the expiration of the Interest Period to extend beyond the Maturity
Date, in which case such LIBOR Loan shall be converted to a Prime Rate Loan).
(f) CERTAIN DEFINITIONS: The following terms used herein, and in any
notes or other documents relating hereto, shall have the following meanings:
"BUSINESS DAY" means any day, other than a Saturday, Sunday or day which
shall be in the State of Maine a legal holiday, on which banks in Portland,
Maine, are open for the conduct of a substantial part of their commercial
banking business.
"INTEREST PERIOD" means, in the event that interest is calculated at the
Prime Rate, the Interest Period shall be one (1) day, and in the event that
interest is calculated at the LIBOR Rate, the Interest Period shall be a period
commencing on the date so designated by the Borrower in its
8
irrevocable written notice to Bank and ending 30, 60, or 90 days thereafter, as
the Borrower may elect in such notice pursuant to Section 5(e); provided that:
(i) any Interest Period that would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business 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 Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period may extend beyond the Maturity Date.
"LIBOR" means, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. Dollars, for a
period of time comparable to such LIBOR Loan which appears on the Telerate page
3750 as of 11:00 a.m. London time on the day that is two London Banking Days
preceding the first day of such LIBOR Advance; provided, however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the LIBOR rate shall be the rate (rounded upward,
if necessary, to the nearest one hundred-thousandth of a percentage point),
determined on the basis of the offered rates for deposits in U.S. dollars for a
period of time comparable to such LIBOR Advance which are offered by four major
banks in the London interbank market at approximately 11:00 a.m. London time, on
the day that is two (2) London Banking Days preceding the first day of such
LIBOR Loan as selected by Bank. The principal London office of each of the four
major London banks will be requested to provide a quotation of its U.S. Dollar
deposit offered rate. If at least two such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will be determined
on the basis of the rates quoted for loans in U.S. dollars to leading European
banks for a period of time comparable to such LIBOR Loan offered by major banks
in New York City at approximately 11:00 a.m. New York City time, on the day that
is two London Banking Days preceding the first day of such LIBOR Loan. In the
event that Bank is unable to obtain any such quotation as provided above, it
will be deemed that LIBOR pursuant to a LIBOR Loan cannot be determined and only
Prime Rate Loans will be available hereunder until LIBOR quotations again become
available to Bank. In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits
of Bank, then for any period during which such Reserve Percentage shall apply,
LIBOR shall be equal to the amount determined above divided by an amount equal
to 1 minus the Reserve Percentage. "Reserve Percentage" shall mean the minimum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed on member banks of the Federal Reserve System
against "Euro-currency Liabilities" as defined in Regulation D. "Banking Day"
9
shall mean, in respect of any city, any day on which commercial banks are open
for business in that city.
"LIBOR LOANS" means any Loans for which the interest rate is the LIBOR
Rate.
"LIBOR RATE" means a fixed annual rate of interest equal to LIBOR plus One
and One Half Percent (1.5%).
"LOAN" means a loan, sometimes referred to herein as an advance, made to
the Borrower by the Bank pursuant to Section 4 of this Agreement, and "Loans"
means all of such loans, collectively.
"PRIME RATE LOANS" means any Loans for which the interest rate is based on
the Prime Rate.
"SUBSIDIARY" means, with respect to any person (the "parent"), any
corporation, association or other business entity of which securities or other
ownership interests representing more than 50% of the ordinary voting power are,
at the time as of which any determination is being made, owned or controlled by
the parent or one or more subsidiaries of the parent, and shall include any
entities designated as subsidiaries on the Borrower's audited financial
statements.
"TYPE" means, with respect to any Loan, its nature as a Prime Rate Loan or
a LIBOR Loan.
"YIELD MAINTENANCE FORMULA" shall be calculated as follows: the published
rate of United States Treasury Notes or Bills (Bills on a discounted basis shall
be converted to a bond equivalent) (as published weekly in the Federal Reserve
Statistical Release in the issue of such publication most recently preceding the
date of prepayment) with a maturity date that is the same as, or is the nearest
date subsequent to, the last day of the Interest Period for the Loan being
prepaid, shall be subtracted from the annual rate of interest applicable to such
Loan. If the result is zero or a negative number, there shall be no additional
amount due. If the result is a positive number, then the resulting percentage
shall be multiplied by the amount of the principal balance being prepaid. The
resulting amount will be divided by 360 and multiplied by the number of days
remaining until the end of the applicable Interest Period. Said amount shall be
reduced to present value, calculated by using the above referenced applicable
United States Treasury Note or ▇▇▇▇ rate and the number of days remaining
between the date of the prepayment and the end of the applicable Interest
Period.
(g) INTEREST RATE CALCULATIONS; LATE FEE. All computations of interest
shall be made on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed. If the entire amount of any required principal
and/or interest is not paid in full within fifteen (15) days after the same is
due, Borrower shall pay to Bank a late fee equal to five percent (5%) of the
required payment.
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6. BANK'S REPORTS. After the end of each month, Bank will render to
Borrower a statement of Borrower's loan account with Bank hereunder, showing all
applicable credits and debits. Each statement shall be considered correct and to
have been accepted by Borrower and shall be conclusively binding upon Borrower
in respect of all charges, debits and credits of whatsoever nature contained
therein, and the closing balance shown therein, unless Borrower notifies Bank in
writing of any discrepancy within sixty (60) days from the mailing by Bank to
Borrower of any such monthly statement.
7. SET OFF; EXPENSES.
(a) Borrower hereby acknowledges Bank's right of setoff as security for
all liabilities and obligations to Bank, whether now existing or hereafter
arising, upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Bank or any
entity under the control of Bank of America Corporation and its successors and
assigns or in transit to any of them. At any time, without demand or notice (any
such notice being expressly waived by Borrower), Bank may setoff the same or any
part thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the Loan. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING
ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
(b) The Borrower shall pay to Bank on demand any and all reasonable
counsel fees and other reasonable expenses incurred by Bank in connection with
the preparation, interpretation, enforcement, administration or amendment of
this Agreement or of any documents relating hereto, and any and all expenses,
including, but not limited to all reasonable attorneys' fees and expenses, which
may be expended by Bank to obtain or enforce payment in the prosecution or
defense of any action or concerning any matter growing out of or connected with
the subject matter of this Agreement, the Obligations or any of Bank's rights or
interests therein or thereto, including, without limiting the generality of the
foregoing, any reasonable counsel fees or expenses incurred in any bankruptcy or
insolvency proceedings and all costs and expenses incurred or paid by Bank in
connection with the administration, supervision, protection or realization on
any security held by Bank for the debt secured hereby, whether such security was
granted by Borrower or by any other person primarily or secondarily liable (with
or without recourse) with respect to such debt, and all reasonable costs and
expenses incurred by Bank in connection with the defense, settlement or
satisfaction of any action, claim or demand asserted against Bank in connection
with the debt secured hereby, all of which amounts shall be considered advances
to protect Bank's security, and shall be secured hereby. After an Event of
Default, and without limiting any other rights or remedies, Bank may, upon
written notice, at any time pay or discharge any taxes, liens, security
interests or other encumbrances at any time levied
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against or placed on any of the Borrower's facilities, and may procure and pay
any premiums on any insurance required to be carried by Borrower, and provide
for the maintenance and preservation of any of the Borrower's facilities, and
otherwise take any action reasonably deemed necessary by Bank to protect its
interests, and all amounts expended by Bank in connection with any of the
foregoing matters, including reasonable attorneys' fees, shall be considered
obligations of Borrower.
8. BORROWER'S REPORTS.
(a) Borrower shall deliver, or cause to be delivered, to Bank, all
documents listed below, as frequently as indicated below, or at such other times
as Bank may reasonably request, and all other documents and information
requested by Bank, whether or not the same are listed below, with such frequency
as Bank may request:
Document Frequency Due
-------- -------------
Financial statements for Borrower Quarterly, within 60 days
and Maine & Maritimes Corporation after fiscal quarter-end
Annual audited financial reports Annually, within 90 days
for Borrower and for after fiscal year-end
Maine &Maritimes Corporation
An Officer's Certificate showing compliance Quarterly, within 60 days
with financial covenants, in form after fiscal quarter-end
satisfactory to Bank
Annual projected income statement, Annually, within 90 days
Based on budget, in form reasonably after the beginning of
satisfactory to Bank and with the fiscal year in question
monthly detail, for Borrower
(b) Quarterly financials shall be prepared in accordance with generally
accepted accounting principles consistently applied ("GAAP") and certified by
Borrower's chief financial officer.
(c) Annual audited financial reports shall be prepared in accordance
with generally accepted accounting principles consistently applied, accompanied
by an opinion thereon, with no exceptions other than those that are acceptable
to Bank, by a firm of independent public accountants selected by the Borrower
and reasonably acceptable to Bank and with such independent public accountant's
statement that they have reviewed the provisions of this Agreement in accordance
with generally accepted accounting principles and that they have no knowledge of
any event or condition which constitutes an Event of Default or which, after
notice
12
or expiration of any applicable grace period or both, would constitute
such an Event of Default or, if they have such knowledge, specifying the nature
and period of existence thereof, provided, however, that in issuing such
statement, such accountants shall not be required to go beyond normal procedures
conducted in connection with their audit.
(d) In addition to the foregoing, Borrower shall provide Bank promptly
with such other and additional information concerning Borrower, the operation of
Borrower's business, and Borrower's financial condition, including financial
reports and statements, as Bank may from time to time reasonably request. All
financial information provided to Bank in connection with or pursuant to this
Agreement shall be prepared in accordance with generally accepted accounting or
auditing principles (as applicable) applied consistently in the preparation
thereof and consistently with prior periods to fairly reflect the financial
condition of Borrower at the close of, and its results of operations for, the
periods in question.
9. GENERAL AGREEMENTS OF BORROWER.
(a) Borrower agrees to keep its facilities insured with coverage and in
amounts not less than that usually carried by one engaged in a like business and
in any event not less than that reasonably required by Bank. In addition,
Borrower shall maintain appropriate liability insurance and all insurance
required by law, including any necessary workers' compensation insurance. All
insurance required hereunder shall be provided by insurance companies qualified
to do business in Maine, satisfactory to Bank, shall be in such form and in such
amounts as Bank may reasonably require and, without limiting the foregoing,
shall provide that such insurance shall not be canceled or modified without at
least thirty (30) days prior notice to the Bank.
(b) Borrower shall, and shall cause each of its subsidiaries to, to the
extent applicable to the Borrower's or such subsidiary's property or its
business, materially comply with all laws, ordinances and regulations of the
United States, each state, each political subdivision thereof, and of each
governmental authority.
(c) Borrower will pay all real and personal property taxes, assessments
and charges and all franchise, income, unemployment, old age benefits,
withholding, sales and other taxes assessed against it, or payable by it at such
times and in such manner as will prevent any interest or penalties from accruing
and as will prevent any lien or charge from attaching to its property (except
for such taxes, assessments and charges being contested by Borrower in good
faith, prior written notice of such contest having been given to Bank).
(d) Borrower will promptly pay when due all governmental and other
taxes, charges and assessments upon its facilities or for their use or operation
or upon this Agreement, or upon any note or notes evidencing the Obligations
(except for such taxes, assessments and charges being contested by it in good
faith, prior written notice of such contest having been given to Bank, and will,
at the request of Bank, promptly furnish Bank the receipted bills therefor.
After an Event of Default , Bank may discharge taxes, liens, security interests
or other encumbrances at
13
any time levied or placed on such facilities, may pay for insurance on such
facilities and may pay for the maintenance and preservation of such facilities.
Borrower agrees to reimburse Bank on demand for any payments made, or any
expenses incurred by Bank pursuant to the foregoing authorization, and until it
so reimburses Bank, any such sums paid or advanced by Bank shall constitute part
of the Obligations.
(e) Borrower will immediately notify Bank in writing (a) if it has
reason to believe that, or receives any notice that, any Hazardous Materials (as
hereinafter defined) may exist, may have been (or are threatened to be)
released, or have been or may be generated, handled, stored, used, treated,
transported, disposed of, released or maintained, on, under, over, from, or
within, any site owned, leased or operated, in whole or in part, by it (each
called a "SITE" herein), except in each case in material compliance with all
applicable laws, ordinances, rules and regulations, or (b) if it has reason to
know of, or receives any notice of, any loss, cost or expense in excess of
$25,000 incurred by any person or entity in connection with any Hazardous
Materials (i) on, under, over, from or within any Site or (ii) generated,
stored, transported, handled, released or disposed of by or on behalf of
Borrower, or (c) if it has reason to know of, or receives any notice of, any
investigation, action or the incurring of any loss by any governmental authority
in connection with the assessment, containment, removal, remediation or disposal
of any Hazardous Materials for which expense or loss it may be liable or as a
result of which its property may be subject to a lien, in each case unless
listed on Schedule F. As used herein, the term "HAZARDOUS MATERIALS" shall mean
and include any hazardous, toxic, dangerous, radioactive, noxious materials,
substances, objects, gases, and/or wastes, including without limitation all of
the following: (a) asbestos in any form; (b) urea formaldehyde foam insulation;
(c) polychlorinated biphenyls ("PCBS") or transformers or other equipment which
contain dielectric fluid containing any level of PCBs; (d) oil, gasoline and
other petroleum products, and underground or above ground storage tanks for
Hazardous Materials; (e) any other chemical, material, gas, object, waste or
substance which is prohibited, limited, or regulated or subject to regulation by
any federal, state, county, regional, local, or other governmental authority;
and (f) all chemicals, materials, substances, objects, gases, and/or wastes
which are now or may hereafter be regulated by any of the following, including
any of the foregoing that are characterized within any of the terms "hazardous
waste", "hazardous or toxic substance", "hazardous material", or "oil" as each
of those terms is defined in any of the following, as the same have been or may
be amended (the "ACTS"): the Uncontrolled Hazardous Substance Sites Act, 38
M.R.S.A. Section 1361 ET SEQ. (1989); the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 ET SEQ.
(1983)("CERCLA"); the Superfund Amendments and Reauthorization Act of 1986
("▇▇▇▇"); the Federal Water Pollution Control Act (the "CLEAN WATER ACT"), 33
U.S.C. Section 1251 ET SEQ. and 33 U.S.C. Section 1342 ET SEQ.; the Resource
Conservation and Recovery Act, as amended by the Hazardous and Solid Waste
Amendments of 1984 ("RCRA"), 42 U.S.C. 6901 ET SEQ.; the Safe Drinking Water
Act, 14 U.S.C. Sections 1401-1450; the Toxic Substances Control Act, 15 U.S.C.
Sections 2601-2629; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 ET SEQ.; the Clean Air Act, 42 U.S.C. Section 7401 ET SEQ.; the
State of Maine statutory provisions relating to Underground Storage Facilities
and Ground Water Protection, 38 M.R.S.A. Section 561 ET SEQ.; and also including
within the Acts any regulation promulgated under any of the foregoing, or any
other local, state or
14
federal regulation, law or ordinance relating in any way to any Hazardous
Materials, or any successor provision to any of the foregoing. Borrower hereby
agrees to defend, indemnify and hold harmless Bank from and against any and all
liabilities, executions, awards, judgments, claims, damages, demands, penalties,
actions, debts, suits, expenditures, indemnities, losses, charges or other
amounts that are or may become due from Bank in connection with, or arising
directly or indirectly out of any Hazardous Materials on, under, over, within or
released or originating from, any Site or otherwise relating to it, meaning and
intending hereby to assume the obligation to pay, and to indemnify and hold
harmless Bank for, without limitation, (1) all costs reasonably incurred or
expended by Bank in connection with the removal, neutralization or other
remediation of all Hazardous Materials from any Site after an Event of Default,
including without limitation all costs of investigation, monitoring, remedial
response, removal, restoration, feasibility studies, remedial work, cleanup,
engineering reports, and permit acquisitions incurred in connection therewith;
(2) all costs reasonably incurred and sums expended by Bank in determining the
compliance of such removal with all applicable regulations and standards; (3)
all liability of, or expense to, Bank reasonably incurred as a result of the
improper removal, storage, handling, transport or disposal of Hazardous
Materials from any Site, by whomever performed, or arising out of exposure to
Hazardous Materials of any individual while in or on any Site, or otherwise in
connection with the existence or removal of, or failure to remove, any and all
Hazardous Materials, on or from any Site, together with (4) all of Bank's
reasonable costs of defending against any proceedings brought by or on behalf of
any individual or entity allegedly injured as a result of the presence of
Hazardous Materials on any Site, or emanating from a site in any manner, whether
such claim is decided adversely to or in favor of Bank, and (5) any reasonable
attorney's fees incurred in connection with any of the foregoing matters; and
Borrower does hereby further unconditionally assume and agree to indemnify and
make Bank whole if Bank should incur any liability whatsoever under any of the
Acts because of this Agreement or any acts or omissions connected herewith or
otherwise because of Bank's relationship to Borrower, except to the extent
resulting from Bank's gross negligence or willful misconduct. The indemnity set
forth herein shall survive the repayment of all Obligations and the termination
of Bank's agreement to make loans available to Borrower and the termination of
this Agreement.
(f) Except for any gross negligence or willful misconduct of Bank,
Borrower will indemnify and save Bank harmless from all losses, costs, damages,
liabilities or expenses (including, without limitation, court costs and
reasonable attorneys' fees) that Bank may sustain or incur by reason of
enforcing the Obligations, or in the prosecution or defense of any action or
proceeding concerning any matter growing out of or in connection with this
Agreement and/or any other documents now or hereafter executed in connection
with this Agreement and/or the Obligations. This indemnity shall survive the
repayment of the Obligations and the termination of Bank's agreement to make
loans available to Borrower and the termination of this Agreement.
(g) At the reasonable request of Bank, Borrower will furnish to Bank,
from time to time, within ten (10) days after the accrual in accordance with
applicable law of its obligation to make deposits for F.I.C.A. and withholding
taxes, and/or sales taxes, proof satisfactory to Bank that such deposits have
been made as required. Should Borrower fail to make any of such
15
deposits or furnish such proof then Bank may, in its sole and absolute
discretion, (a) make any of such deposits or any part thereof, (b) pay such
taxes, or any part thereof, or (c) set up such reserves as Bank, in its
judgment, may deem necessary to satisfy the liability for such taxes. Each
amount so deposited, paid or reserved shall constitute an advance under the
terms hereof, and shall be repayable on demand with interest. Nothing herein
shall be deemed to obligate Bank to make any such deposit or payment or to set
up such reserve, and the making of any one or more of such deposits or payments
or the setting-up of any such reserve shall not constitute (i) an agreement on
Bank's part to take any further or similar action on that or any other occasion,
or (ii) a waiver of any default by Borrower under the terms hereof.
(h) All indebtedness of Borrower to Bank under this and under any other
agreement constitute one general obligation. It is distinctly understood and
agreed that all of the rights of Bank contained in this Agreement shall likewise
apply, insofar as applicable, to any modification of or supplement to this
Agreement and to any other agreements between Bank and Borrower. Any default
under this Agreement by Borrower shall constitute, likewise, a default by
Borrower under any and all other agreements of Borrower with Bank then existing,
and any default by Borrower under any other agreement with Bank, including
without limitation the promissory notes executed and delivered to Bank by
Borrower in connection with this Agreement, shall constitute a default by
Borrower under this Agreement.
(i) Borrower will, at its expense, upon the request of Bank promptly and
duly execute and deliver such documents and assurances and take such actions as
may be necessary or desirable in Bank's sole discretion in order to correct any
material defect, error or omission which may at any time be discovered in this
Agreement or the documents related hereto, or to carry out more effectively the
intent and purpose of this Agreement or to reasonably establish, perfect and
protect Bank's rights and remedies created or intended to be created hereunder.
(j) If Borrower shall fail to maintain its primary depositary accounts
and one or more cash management accounts with Bank at all times during the term
hereof then the applicable interest rate hereunder shall increase by fifty (50)
basis points (0.5%). The extension of credit evidenced by this Agreement is made
in express reliance on Borrower's agreement to maintain such accounts.
(k) Borrower will promptly notify Bank of any material adverse change in
Borrower's financial condition or any condition or event which constitutes, or
over the passage of time or upon notice or both would constitute an Event of
Default under this Agreement or any other agreement with Bank, or of any
obligation of Borrower to others, or of any threat or pending claim, litigation,
arbitration or governmental proceeding material to Borrower or its business or
operations.
16
10. BORROWER'S NEGATIVE COVENANTS.
(a) LIENS: Borrower shall not create, permit to be created or suffer to
exist any lien, encumbrance or security interest of any kind upon the Borrower's
facilities, except for the Permitted Liens.
(b) TRANSACTIONS WITH AFFILIATES: Except for agreements approved by the
Maine Public Utilities Commission, Borrower shall not enter into any lease or
other transaction with any shareholder, officer or affiliate on terms any less
favorable than those which might be obtained at the time from persons who (or
entities which) are not such a shareholder, officer or affiliate.
(c) SUBSIDIARIES: Without the prior written consent of Bank, which shall
not be unreasonably withheld, Borrower shall not create any new subsidiaries or
sell, transfer or otherwise dispose of any stock or other equity interest of any
subsidiary or permit any subsidiary to sell, assign, exchange or otherwise
dispose of any of its assets except in the ordinary course of business.
(d) MERGERS, CONSOLIDATIONS, CONVERSIONS OR SALES: Without the prior
written consent of the Bank, which shall not be unreasonably withheld or
delayed, the Borrower shall not (i) merge or consolidate with or into any
corporation or other entity, or convert into another entity or participate in a
share exchange; (ii) enter into any joint venture or partnership with any
person, firm, corporation or other entity; (iii) convey, lease or sell all or
any material portion of its property or assets or business to any other person,
firm, corporation or other entity; (iv) convey, lease or sell any of its assets
to any person, firm, corporation or other entity for less than the fair market
value thereof. Any sale, transfer, encumbrance or pledge of equity interests in
Borrower will require written approval of the Bank, which approval will not be
unreasonably withheld.
(e) JURISDICTION OF ORGANIZATION. Borrower shall not change its
jurisdiction of organization without the prior written consent of Bank.
11. BORROWER'S FINANCIAL COVENANTS.
(a) RATIO OF INDEBTEDNESS FOR BORROWED MONEY TO TOTAL CAPITAL. The
Borrower will not permit Consolidated Indebtedness for Borrowed Money to exceed
65% of Consolidated Total Capital at any time.
(b) RATIO OF NET INCOME TO FIXED CHARGES. The Borrower will not permit
the ratio of (i) Consolidated Net Income Available for Fixed Charges for the
period of 12 consecutive months ended at the end of any fiscal quarter to (ii)
Consolidated Interest Expense for such twelve-month period to be less than 1.75
to 1.00.
(c) MINIMUM TANGIBLE NET WORTH: The Borrower will not permit its
Tangible Net Worth to be less than $30,000,000 at any time.
17
(d) DEFINITIONS: As used herein, the following terms have the following
meanings:
"CAPITAL LEASE" means a lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP.
"CODE" means the Internal Revenue Code of 1986.
"COMMON SHAREHOLDERS' EQUITY" means, at any particular date, the total of
the following amounts that, in conformity with GAAP, would be shown on the
consolidated balance sheet of the Borrower and its Subsidiaries as of such date:
(i) capital stock taken at par or stated value, plus (ii) paid-in capital, plus
(iii) retained earnings, minus (iv) treasury stock, at cost.
"CONSOLIDATED INDEBTEDNESS FOR BORROWED MONEY" means, at any particular
date, the total amount of (i) Debt of the Borrower and its Subsidiaries,
excluding intercompany items, that, in conformity with GAAP, would be included
on a consolidated balance sheet of the Borrower and its Subsidiaries (a) in
respect of money borrowed, (b) in respect of obligations evidenced by a note,
bond, debenture or other like written obligation to pay money, (c) in respect of
obligations under Capital Leases, and (d) in respect of obligations under
conditional sales or other title retention agreements, and (ii) Debt of other
Persons of the nature described in clauses (a) through (d) above which is
guaranteed by the Borrower or a Subsidiary or with respect to which the Borrower
or a Subsidiary is contingently liable.
"CONSOLIDATED INTEREST EXPENSE" means, for any specified period, the total
consolidated interest charges of the Borrower and its Subsidiaries for such
period, determined in accordance with GAAP, plus (i) the allowance for borrowed
funds used during construction for such period, minus (ii) interest on customer
deposits for such period.
"CONSOLIDATED NET INCOME AVAILABLE FOR FIXED CHARGES" means, for any
specified period, the consolidated income or loss before extraordinary items of
the Borrower and its Subsidiaries for such period, determined in accordance with
GAAP, plus (i) Consolidated Interest Expense for such period, plus (ii) the
provision for income taxes for such period, minus (iii) the allowance for equity
funds used during construction for such period.
"CONSOLIDATED TOTAL CAPITAL" means, at a particular date, the total of the
amounts that, in conformity with GAAP, would be included on a consolidated
balance sheet of the Borrower and its Subsidiaries as of such date in respect of
(i) Consolidated Indebtedness for Borrowed Money (excluding Debt of other
Persons guaranteed by the Borrower or a Subsidiary), (ii) preferred and
preference stock, and (iii) Common Shareholders' Equity.
"DEBT" means, as to any Person at any date, all items that, in conformity
with GAAP, would be classified as liabilities on a balance sheet of such Person
as of such date and in any event shall without limitation include (i)
indebtedness for borrowed money or constituting the
18
deferred purchase price of assets or other property or services in respect of
which the Person is liable, (ii) obligations with respect to any conditional
sales agreement or title retention agreement, (iii) indebtedness arising under
acceptance facilities and the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all liabilities secured by any Lien on any property owned by
such Person even though it has not assumed or otherwise become liable for the
payment thereof, (v) obligations under Capital Leases, (vi) obligations,
contingent or otherwise, with respect to any performance bonds, (vii) unfunded
vested benefits under Plans and potential withdrawal liabilities under
Multiemployer Plans, and (viii) all guarantees by such Person for the payment of
indebtedness of others of the character described in (i) through (vii) above.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means, as applied to any Person, any Person who is a
member of a group that is under common control with such Person and who,
together with such first Person is treated as a single employer within the
meaning of Section 414(b), (c), (m) or (o) of the Code, or Section 4001 (b) of
ERISA.
"LIEN" means any mortgage, deed to secure debt, deed of trust, pledge,
charge, encumbrance, security interest, collateral assignment or other lien or
restriction of any kind, whether based on common law, constitutional provision,
statute or contract, and shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate of the Borrower
is making, or is obligated to make, contributions or with respect to which the
Borrower or any ERISA Affiliate of the Borrower has any liability.
"PERSON" means an individual or a corporation, business trust, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, government (or an agency or political subdivision
thereof) or any other entity.
"PLAN" means any "PENSION PLAN" (as defined in Section 3(2) of ERISA) that
is subject to the provisions of Title IV of ERISA or Section 412 of the Code
(other than a Multiemployer Plan) and that (a) is maintained for employees of
the Borrower or any of its ERISA Affiliates or (b) with respect to which the
Borrower or any of its current or former ERISA Affiliates has liability.
"SUBSIDIARY" of any Person means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such specified Person, by such
specified Person and any one or more other Subsidiaries of such Person, or by
any one or more other Subsidiaries of such specified Person.
19
"TANGIBLE NET WORTH" means, at a particular date, the total of all amounts
that, in conformity with GAAP, would be included on a consolidated balance sheet
of the Borrower and its Subsidiaries as of such date in respect of Common
Shareholders' Equity, plus (i) the amount of preferred and preference stock not
subject to mandatory redemption, minus (ii) goodwill.
12. DEFAULT. Upon the occurrence of any one or more of the following
Events of Default:
(a) The execution of an assignment for the benefit of the creditors of
Borrower, or the occurrence of any other voluntary or involuntary liquidation or
(other than in the ordinary course of business) extension of debt agreement for
Borrower; the failure by Borrower to generally pay its debts as they mature;
adjudication of bankruptcy or insolvency relative to Borrower; the entry of an
order for relief or similar order with respect to Borrower in any proceeding
pursuant to Title 11 of the United States Code entitled "Bankruptcy" (commonly
referred to as the Bankruptcy Code) or any other federal bankruptcy law; the
filing of any complaint, application, or petition by or against Borrower
initiating any matter in which it is or may be granted any relief from debts
pursuant to any other insolvency statute or procedure, but if such filing is
against Borrower by one or more third parties, only if Borrower shall fail to
contest such filing actively or shall fail to cause it to be removed within
sixty (60) days; the calling by Borrower of a meeting of creditors of Borrower;
the formation with respect to Borrower of a formal or informal creditor's
committee; the offering by or entering into by Borrower of any composition,
extension or any other arrangement seeking relief or extension for its debts
generally, or the initiation of any other judicial or non-judicial proceeding or
agreement by, against or including Borrower which seeks or intends to accomplish
a reorganization or arrangement with creditors; or
(b) The termination of existence, dissolution, or liquidation of
Borrower or any guarantor; or
(c) The ceasing or failure of this Agreement, at any time after its
execution and delivery and for any reason, to be in full force and effect; or
any determination or declaration that this Agreement is null and void; or the
commencement or prosecution of any contest challenging the validity or
enforceability hereof by Borrower or any guarantor; or any denial by Borrower
that it has any further liability or obligation hereunder; or
(d) The service of any process upon Bank seeking to attach by trustee
process any funds of Borrower on deposit with Bank, if the aggregate of such
attachments equals or exceeds $500,000 at any given time and such attachment is
not dissolved or bonded over to Bank's satisfaction within thirty (30) days; or
(e) The failure by Borrower promptly, punctually and faithfully to
perform or to observe any term, covenant or agreement on its part to be
performed or observed pursuant to the following provisions of this Agreement, or
the material inaccuracy of the representations and
20
warranties included in the following provisions, as of the time given: Sections
9(a), 9(k), 10(d), 10(e), 11;
then the principal of and all interest on the loans then outstanding, and all
other amounts due hereunder, shall become forthwith due and payable without
presentment, demand, protest or notice of any kind, all of which Borrower hereby
expressly waives.
Upon the occurrence of any one or more of the following Events of Default
(together with the Events of Default listed above, the "EVENTS OF DEFAULT" and
individually an "EVENT OF DEFAULT"):
(f) The failure by Borrower to pay any amount due under this Agreement
or any of the promissory notes relating hereto within fifteen (15) days of the
due date; or
(g) The failure by Borrower to pay upon demand (or within fifteen (15)
days of when due, if not payable on demand) any other of the Obligations, or any
portion thereof; or
(h) The failure by Borrower promptly, punctually and faithfully to
perform or to observe any term covenant or agreement on its part to be performed
or observed pursuant to any provisions of this Agreement (other than as
expressly set forth in this Section 10), and the continuance thereof for thirty
(30) days after notice of such default has been given; or
(i) The occurrence of any event of default such that any indebtedness of
Borrower in excess of $1,500,000 from any lender other than Bank could be
accelerated, regardless of whether such acceleration has taken place; or
(j) Any filing against or relating to Borrower of (i) a federal tax lien
in favor of the United States of America or any political subdivision of the
United States of America, or (ii) a state tax lien in favor of any state of the
United States of America or any political subdivision of any such state, other
than a lien for taxes not yet due and payable, unless such lien is removed or
bonded over to the Bank's satisfaction within thirty (30) days; or
(k) The occurrence of any event of default under any other agreement
between Bank and Borrower or under any instrument or document given to Bank by
Borrower , whether such agreement, instrument, or document now exists or
hereafter arises (regardless of whether Bank has exercised any of its rights
upon default under any such other agreement, instrument or document) and the
failure to cure such default within any applicable grace period; or
(l) Any act by, against, or relating to Borrower, or its property or
assets, which act constitutes the application for, consent to, acquiescence in,
or sufferance of the appointment of a receiver, trustee or other person,
pursuant to court action or otherwise, over all or any material part of its
property; or
21
(m) The entry of any judgment against Borrower in an amount in the
aggregate greater than $500,000, which judgment is not satisfied, bonded over or
appealed from (with execution or similar process stayed) within thirty (30) days
of entry; or
(n) The entry of any court order which enjoins, restrains or in any way
prevents Borrower from conducting all or any substantial part of its business
affairs in the ordinary course of business; or
(o) The occurrence of any uninsured or materially underinsured loss,
theft, damage or destruction to any material asset(s) of Borrower; or
(p) Any act by, against, or relating to Borrower or its assets pursuant
to which any creditor of Borrower seeks to reclaim or repossess, or reclaims or
repossesses, all or a substantial portion of its assets; or
(q) The existence or occurrence of any of the following events with
respect to Borrower or any ERISA affiliate: (i) any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code)
involving any Plan; (ii) any "reportable event" (as defined in Section 4043 of
ERISA and the regulations issued under such Section) with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to terminate
any Plan or the termination of any Plan; (iv) any event or circumstance which
might constitute grounds entitling the Pension Benefit Guaranty Corporation
("PBGC") to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Plan, or
the institution by the PBGC of any such proceedings; or (v) any partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan; or any
reorganization, insolvency, or termination of any Multiemployer Plan; and in
each case above, such event or condition, together with all other events or
conditions, if any, could in the opinion of Bank subject Borrower to any
material tax, penalty, or other liability to a Plan, a Multiemployer Plan, the
PBGC, or otherwise; or
(r) The attachment of any security interest, lien or mortgage not in
favor of Bank, other than Permitted Liens, upon the Borrower's facilities,
without Bank's prior written consent and the continuation thereof for thirty
(30) days after Borrower gains actual knowledge thereof; or
(s) The determination by Bank that any material representation or
warranty heretofore, now or hereafter made by Borrower to Bank, in any document,
instrument or agreement was not materially true or accurate when given;
then or at any time thereafter while such Event of Default described in Sections
12(f) through 12 (s) is continuing, Bank may declare all indebtedness of
Borrower hereunder due and payable, whereupon it shall become forthwith due and
payable, without further presentment, demand, protest or notice of any kind, all
of which Borrower hereby expressly waives.
22
The occurrence of any such Event of Default shall also constitute, without
notice or demand, a default under all other agreements between Bank and Borrower
and under all instruments and documents given to Bank by Borrower, but only to
the extent included within Obligations, whether such agreements, instruments, or
documents now exist or hereafter arise.
Upon the occurrence and during the continuance of any Event of Default,
Bank may declare any and all obligations Bank may have hereunder to be canceled,
may declare any or all Obligations to be due and payable, and may proceed to
enforce payment of the Obligations and to exercise any and all of the rights and
remedies afforded to Bank by the Uniform Commercial Code, under the terms of
this Agreement, or otherwise. In addition, upon the occurrence and during the
continuance of any Event of Default, all Obligations (including, without
limitation, principal, interest accrued to the time of demand on the
Obligations, or upon the entry of any judgment) shall bear interest payable on
demand at a rate per annum of four (4%) percent in excess of the Prime Rate, for
so long as the Event of Default remains uncured.
13. JURY TRIAL WAIVER. IT IS MUTUALLY AGREED BY BANK AND BORROWER THAT THE
RESPECTIVE PARTIES HERETO SHALL AND HEREBY DO WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING, COUNTERCLAIM, OBJECTION TO CLAIM IN A BANKRUPTCY CASE, OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES HERETO AGAINST ANY OF THE
OTHERS ON ANY MATTER WHATSOEVER ARISING OUT OF, RELATED TO, OR IN ANY WAY
CONNECTED WITH THIS AGREEMENT AND/OR THE TRANSACTIONS OR DOCUMENTS CONTEMPLATED
HEREBY. WITHOUT IN ANY WAY LIMITING THE SCOPE OR EFFECT OF THE FOREGOING WAIVER
OF THE JURY TRIAL RIGHT, THE PARTIES HERETO SPECIFICALLY AGREE THAT SUCH WAIVER
SHALL BE EFFECTIVE IN ANY ACTION ARISING OUT OF OR RELATED TO: (A) ANY ALLEGED
ORAL PROMISE OR COMMITMENT BY BANK, (B) ANY ALLEGED MODIFICATION OR AMENDMENT OF
THIS AGREEMENT AND/OR THE TRANSACTIONS OR DOCUMENTS CONTEMPLATED HEREBY, WHETHER
IN WRITING, ORAL, OR BY ALLEGED CONDUCT; (C) ANY ENFORCEMENT OF THIS AGREEMENT
AND/OR THE TRANSACTIONS OR DOCUMENTS CONTEMPLATED HEREBY, AND (D) ANY
REPOSSESSION, TAKING OF POSSESSION, OR DISPOSITION OF COLLATERAL SECURING THE
INDEBTEDNESS EVIDENCED BY THIS AGREEMENT AND/OR THE TRANSACTIONS OR DOCUMENTS
CONTEMPLATED HEREBY. WITHOUT IN ANY WAY LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY ARE WAIVED BY
OPERATION OF THIS PARAGRAPH AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT AND/OR THE TRANSACTIONS OR DOCUMENTS CONTEMPLATED HEREBY OR ANY
PROVISION THEREOF.
23
14. CONSENT TO JURISDICTION. Borrower and Bank agree that any judicial
action or proceeding to enforce or arising out of this Agreement may, subject to
the provisions of Section 12 hereof, be commenced in any court of the State of
Maine or in the District Court of the United States for the District of Maine.
15. TERMINATION AND EXPIRATION NOT TO AFFECT BANK'S RIGHTS. Unless and
until all loans made by Bank to Borrower hereunder and all other Obligations and
commitments of Bank under which an Obligation could arise, outstanding as of the
time of the termination or expiration of this Agreement, have been paid in full
(and, in the case of such commitments, have been terminated), such termination
or expiration shall in no way affect the rights and powers herein granted to
Bank, and until such payment in full (and termination) all rights and powers
herein granted to Bank in respect thereof and otherwise, and all liabilities,
obligations and agreements of Borrower hereunder, shall remain in full force and
effect. Until all of the Obligations have been fully paid and satisfied and all
commitments of Bank under which an Obligation could arise have expired, Borrower
shall continue to fully comply with the terms and conditions of this Agreement
as herein provided. Prior to such payment in full of all of the Obligations and
the simultaneous termination of all of such commitments by Bank, Borrower's
obligations under this Agreement shall constitute a continuing agreement in
every respect.
16. MISCELLANEOUS.
(a) No delay or omission on the part of Bank in exercising any rights
shall operate as a waiver of such right or any other right. Waiver on any one
occasion shall not be construed as a bar to or waiver of any right or remedy on
any future or other occasion. All of Bank's rights and remedies, whether
evidenced hereby or by any other agreement, instrument or paper, shall be
cumulative and may be exercised singularly or concurrently.
(b) Bank is authorized to make loans under the terms of this Agreement
upon the request, either written or oral, in the name of Borrower or any
authorized person whose name appears at the end of this Agreement or of any
persons from time to time holding the office of President of Borrower or of such
other officers and authorized signatories as may from time to time be set forth
in any banking and borrowing resolutions, or of any other agents or officers
with apparent authority to act for Borrower in requesting loans hereunder.
(c) The Bank may at any time pledge all or any portion of its rights
under the loan documents including any portion of the promissory note to any of
the twelve (12) Federal Reserve Banks organized under Section 4 of the Federal
Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement thereof shall
release Bank from its obligations under any of the loan documents.
(d) Subject to Maine Public Utilities Commission Approval, if required,
and notice to Borrower, the Bank shall have the right at any time or from time
to time, and without Borrower's consent, to assign all or any portion of its
rights and obligations hereunder to one or more banks
24
or other financial institutions (each, an "Assignee"), and Borrower and each
guarantor agrees that it shall execute, or cause to be executed, such documents,
including without limitation, amendments to this Agreement and to any other
documents, instruments and agreements executed in connection herewith as the
Bank shall deem necessary to effect the foregoing. In addition, at the request
of the Bank and any such Assignee, the Borrower shall issue one or more new
promissory notes, as applicable, to any such Assignee and if the Bank has
retained any of its rights and obligations hereunder following such assignment,
to the Bank, which new promissory notes shall be issued in replacement of, but
not in discharge of, the liability evidenced by the promissory note held by the
Bank prior to such assignment and shall reflect the amount of the respective
commitments and loans held by such Assignee and the Bank after giving effect to
such assignment. Upon the execution and delivery of appropriate assignment
documentation, amendments and any other documentation required by the Bank in
connection with such assignment, and the payment by Assignee of the purchase
price agreed to by the Bank, and such Assignee, such Assignee shall be a party
to this Agreement and shall have all of the rights and obligations of the Bank
hereunder (and under any and all other guaranties, documents, instruments and
agreements executed in connection herewith) to the extent that such rights and
obligations have been assigned by the Bank pursuant to the assignment
documentation between the Bank and such Assignee, and the Bank shall be released
from its obligations hereunder and thereunder to a corresponding extent.
(e) Subject to Maine Public Utilities Commission Approval, if required,
Bank shall have the right at any time and from time to time, and without the
consent of or notice to Borrower , to grant to one or more banks or other
financial institutions (each, a "PARTICIPANT") participating interests in Bank's
obligation to lend hereunder and/or any or all of the loans held by Bank
hereunder. In the event of any such grant by Bank of a participating interest to
a Participant, whether or not upon notice to Borrower, Bank shall remain
responsible for the performance of its obligations hereunder and Borrower shall
continue to deal solely and directly with Bank in connection with the Bank's
rights and obligations hereunder. Bank may furnish any information concerning
Borrower in its possession from time to time to prospective Participants,
provided that Bank shall require any such prospective Participant to agree in
writing to maintain the confidentiality of such information.
(f) Upon receipt of an affidavit of an officer of Bank as to the loss,
theft, destruction or mutilation of the Note relating to this Agreement or any
other security document which is not of public record, and, in the case of any
such loss, theft, destruction or mutilation, upon cancellation of such Note or
other security document, Borrower will issue, in lieu thereof, a replacement
note or other security document in the same principal amount thereof and
otherwise of like tenor. Borrower may condition its agreement to provide the
foregoing upon Bank's written agreement to indemnify Borrower from and against
any and all claims, liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs and expenses of any kind whatsoever which may
be imposed upon the Borrower in connection with the presentation or attempted
collection of the lost, stolen, destroyed or mutilated document that is being
replaced.
25
(g) All agreements between Borrower and Bank are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount paid or agreed to be paid to Bank for the use or the
forbearance of the indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law" shall mean the
law in effect as of the date hereof provided, however, that in the event there
is a change in the law which results in a higher permissible rate of interest,
then this Agreement shall be governed by such new law as of its effective date.
In this regard, it is expressly agreed that it is the intent of Borrower and
Bank in the execution, delivery and acceptance of this Agreement to contract in
strict compliance with the laws of the State of Maine from time to time in
effect. If, under or from any circumstances whatsoever, fulfillment of any
provision hereof or of any promissory note evidencing the Loans at the time of
performance of such provision shall be due, shall involve transcending the limit
of such validity prescribed by applicable law, then the obligation to be
fulfilled shall automatically be reduced to the limits of such validity, and if
under or from circumstances whatsoever Bank should ever receive as interest an
amount which would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the principal balance
hereunder and not to the payment of interest. This provision shall control every
other provision of all agreements between Borrower and Bank.
(h) This Agreement, together with the Note related hereto, are intended
by the parties as the final, complete and exclusive statement of the
transactions evidenced by this Agreement. All prior or contemporaneous promises,
agreements and understandings, whether oral or written, are deemed to be
superseded by this Agreement, and no party is relying on any promise, agreement
or understanding not set forth in this Agreement. This Agreement may not be
amended or modified except by a written instrument describing such amendment or
modification executed by Borrower and Bank.
(i) Borrower agrees that any and all loans made by Bank to Borrower or
for its account under this Agreement shall be conclusively deemed to have been
authorized by Borrower and to have been made pursuant to duly authorized
requests therefor on its behalf.
(j) Unless otherwise defined in this Agreement, capitalized words shall
have the meanings set forth in the Uniform Commercial Code as in effect in the
State of Maine as of the date of this Agreement.
(k) Any paragraph and section headings used in this Agreement are for
convenience only, and shall not affect the meaning or construction of this
Agreement. If one or more provisions of this Agreement (or the application
thereof) shall be invalid, illegal or unenforceable in any respect in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
in any way the validity, legality or enforceability of such provision (or its
application) in any other jurisdiction or of any other provision of this
Agreement (or its application) in any jurisdiction. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes any prior written or verbal communications or instruments
relating thereto.
26
(l) All notices and other communications hereunder shall be made by hand
delivery, overnight courier, or certified or registered mail, return receipt
requested, and shall be deemed to be received by the party to whom sent upon
delivery, if delivered by hand ; one business day after sending, if sent by
overnight courier; and three business days after mailing, if sent by certified
or registered mail. All such notices shall be deemed given upon such deemed
receipt. All such notices and other communications to a party hereto shall be
addressed to such party at the address set forth at the end of this Agreement
(or to such other address as such party may designate for itself in a notice to
the other party given in accordance with this section) and shall be sent postage
and other charges prepaid.
(m) By signing below, Borrower agrees and acknowledges that, under Maine
law, no promise, contract, or agreement to lend money, extend credit, forbear
from collection of debt or make any other accommodation for the repayment of a
debt for more than $250,000 may be enforced against Bank unless the promise,
contract, or agreement (or some memorandum or note thereof) is in writing and
signed by Bank.
(n) This Agreement, and the documents related thereto, are being
executed and delivered by Borrower in Presque Isle, Maine, and the laws of the
State of Maine shall govern the interpretation, enforcement and construction of
this Agreement and the of rights and duties of the parties hereto. This
Agreement shall take effect as a sealed instrument and shall be effective as of
the date first set forth above, regardless of the actual date of execution and
delivery.
27
Witnessed By: MAINE PUBLIC SERVICE COMPANY
By:
----------------------- ------------------------------
Name:
Title:
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Copies of notices to the Borrower shall also
be sent to the following address, but a failure
to do so shall not affect the validity of any
such notice:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Broder Micoleau LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Witnessed by: FLEET NATIONAL BANK
By:
----------------------- ------------------------------
Title:
Address:
Two ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
28
SCHEDULES
The following Schedules to the
Master Loan Agreement to which they are
attached are respectively described in the section indicated. Those Schedules in
which no information has been inserted shall be deemed to read "None".
29
SCHEDULE A
1. Other Jurisdictions In Which Borrower Is Organized or Qualified to do
Business (Section 4(a))
None.
30
SCHEDULE B
Subsidiaries (Section 4(a))
Jurisdiction of
Name Incorporation Address Affiliation to Borrower
---- --------------- ------- ------------------------
Maine & ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 100% wholly owned
Brunswick Canada Presque Isle, ME subsidiary
Electrical 04769
Power Co.
31
SCHEDULE C
Other Encumbrances and Liens (Section 4(e)(i))
Secured Party Description of Payment Terms and
Or Mortgagee of Collateral Dates of Maturity
------------- -------------- -----------------
A. U.S. Bank Trust National Blanket Indenture
Association, Trustee
B. Bank of New York , Trustee Blanket Indenture
C. The following:
(i) Liens for taxes, assessments, or governmental charges for the then
current year and taxes, assessments or governmental charges not then delinquent,
and liens for taxes, assessments or governmental charges already delinquent, but
whose validity is at the time being contested in good faith by the Company in
compliance with the provisions of Section 4(f);
(ii) Liens and charges incidental to construction or current operation
which have not at such time been filed or asserted or the payment of which has
been adequately secured or which are immaterial in amount;
(iii) Liens, securing obligations neither assumed by the Borrower or a
subsidiary nor on account of which they customarily pay interest directly or
indirectly, existing, either at the date hereof, or, as to property hereafter
acquired, at the time of acquisition by the Borrower or a subsidiary, upon real
estate or rights in or relating to real estate acquired by the Borrower or a
subsidiary for substation or transmission, distribution or other right-of-way
purposes;
(iv) Any right which any municipal or governmental body or agency 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 Borrower or a
subsidiary upon payment of reasonable compensation therefore or to terminate any
franchise, license or other rights or to regulate the property and business of
the Borrower or a subsidiary, PROVIDED that any such compensation is applied in
accordance with the requirements of the First Mortgage Indenture and the Second
Mortgage Indenture;
(v) Liens of judgments covered by insurance or if not so covered not
exceeding at any one time $500,000 in aggregate amount and liens in respect of
judgments or awards in respect of which an appeal or proceeding for review shall
be pending or a stay of execution shall have been obtained, Borrower shall have
notified Bank in writing of such appeal, proceeding or stay prior to the
commencement thereof, and in respect of which adequate reserves shall have been
established on the books of the Borrower or a subsidiary;
32
(vi) Easements or reservations in respect of any property of the Borrower
for the purpose of rights-of-way and similar purposes, reservations,
restrictions, covenants, party wall agreements, conditions of record and other
encumbrances (other than to secure the payment of money), which do not
materially interfere with the proper operation and development of the property
affected thereby;
(vii) Any lien or encumbrance, moneys sufficient for the discharge of
which have been deposited in trust with the trustee or mortgagee under the
instrument evidencing such lien or encumbrance, with irrevocable authority to
such trustee or mortgagee to apply such moneys to the discharge of such lien or
encumbrance to the extent required for such purpose;
(viii) Any lien reserved as security for rent or for compliance with other
provisions of the lease in the case of any leasehold estate;
(ix) Liens in respect of attachments which were discharged with 60 days
after entry, or which have been bonded and are being contested in good faith and
by appropriate proceedings diligently conducted, PROVIDED that Borrower has so
notified Bank in writing prior to the commencement of such contest and FURTHER
PROVIDED that no such lien exceeds $500,000 or secures an amount in excess of
such amount;
(x) Deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of borrowed money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business;
(xi) Extensions or renewals of any liens permitted by this definition in
respect of all or a part of the property theretofore subject thereto; and
(xii) The undivided interest of other owners, and liens on such undivided
interests, in property owned jointly with the Borrower, whether or not the
Borrower is presently entitled to require partition of such property.
33
SCHEDULE D
Leases (Section 4(e))
BORROWER AS LESSOR:
Description Date of Lease
Lessee of Property and Term
------ ----------- -------------
BORROWER AS LESSEE:
Description Date of Lease
Lessor of Property and Term
------ ----------- -------------
34
SCHEDULE E
Litigation and Other Proceedings (Section 4(h))
No litigation; reference is made to the latest 10-Q filing with the Securities
and Exchange Commission for information on regulatory matters.
35
SCHEDULE F
Environmental Matters (Section 9(e))
36