Exhibit 10.1
================================================================================
THE BROOKLYN UNION GAS COMPANY,
doing business as KEYSPAN ENERGY DELIVERY NEW YORK
$400,000,000
5.60% Senior Unsecured Notes due November 29, 2016
----------------------------------------------------------
NOTE PURCHASE AGREEMENT
-------------
Dated as of November 29, 2006
================================================================================
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES.................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES.............................................................1
SECTION 3. CLOSING................................................................................2
SECTION 4. CONDITIONS TO CLOSING..................................................................2
Section 4.1. Representations and Warranties.........................................................2
Section 4.2. Performance; No Default................................................................2
Section 4.3. Compliance Certificates................................................................2
Section 4.4. Opinions of Counsel....................................................................3
Section 4.5. Purchase Permitted By Applicable Law, Etc..............................................3
Section 4.6. Sale of Other Notes....................................................................3
Section 4.7. Payment of Special Counsel Fees........................................................3
Section 4.8. Private Placement Number...............................................................3
Section 4.9. Changes in Corporate Structure.........................................................3
Section 4.10. Funding Instructions...................................................................4
Section 4.11. Proceedings and Documents..............................................................4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................4
Section 5.1. Organization; Power and Authority......................................................4
Section 5.2. Authorization, Etc.....................................................................4
Section 5.3. Disclosure.............................................................................4
Section 5.4. Organization and Ownership of Shares of Subsidiaries...................................5
Section 5.5. Financial Statements; Material Liabilities.............................................5
Section 5.6. Compliance with Laws, Other Instruments, Etc...........................................5
Section 5.7. Governmental Authorizations, Etc.......................................................6
Section 5.8. Litigation; Observance of Statutes and Orders..........................................6
Section 5.9. Taxes..................................................................................6
Section 5.10. Title to Property; Leases..............................................................6
Section 5.11. Licenses, Permits, Etc.................................................................7
Section 5.12. Compliance with ERISA..................................................................7
Section 5.13. Private Offering by the Company........................................................8
Section 5.14. Use of Proceeds; Margin Regulations....................................................8
Section 5.15. Existing Indebtedness..................................................................8
Section 5.16. Foreign Assets Control Regulations, Etc................................................9
Section 5.17. Status under Certain Statutes..........................................................9
i
SECTION 6. REPRESENTATIONS OF THE PURCHASERS......................................................9
Section 6.1. Purchase for Investment................................................................9
Section 6.2. Source of Funds.......................................................................10
SECTION 7. INFORMATION AS TO COMPANY.............................................................11
Section 7.1. Financial and Business Information....................................................11
Section 7.2. Officer's Certificate.................................................................13
Section 7.3. Visitation............................................................................14
SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES...................................................14
Section 8.1. Maturity..............................................................................14
Section 8.2. Optional Prepayments with Make-Whole Amount...........................................14
Section 8.3. Allocation of Partial Prepayments.....................................................15
Section 8.4. Maturity; Surrender, Etc..............................................................15
Section 8.5. Purchase of Notes.....................................................................15
Section 8.6. Make-Whole Amount.....................................................................16
SECTION 9. AFFIRMATIVE COVENANTS.................................................................17
Section 9.1. Payments on the Notes.................................................................17
Section 9.2. Compliance with Law...................................................................17
Section 9.3. Insurance.............................................................................17
Section 9.4. Maintenance of Properties.............................................................18
Section 9.5. Payment of Taxes......................................................................18
Section 9.6. Corporate Existence, Etc..............................................................18
Section 9.7. Books and Records.....................................................................18
Section 9.8. Regulated Business....................................................................18
SECTION 10. NEGATIVE COVENANTS....................................................................18
Section 10.1. Transactions with Affiliates..........................................................19
Section 10.2. Merger, Consolidation, Etc............................................................19
Section 10.3. Line of Business......................................................................19
Section 10.4. Liens.................................................................................19
Section 10.5. Most Favored Noteholder...............................................................20
Section 10.6. Terrorism Sanctions Regulations.......................................................20
SECTION 11. EVENTS OF DEFAULT.....................................................................20
SECTION 12. REMEDIES ON DEFAULT, ETC..............................................................22
Section 12.1. Acceleration..........................................................................22
Section 12.2. Other Remedies........................................................................23
Section 12.3. Rescission............................................................................23
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.....................................23
ii
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................24
Section 13.1. Registration of Notes.................................................................24
Section 13.2. Transfer and Exchange of Notes........................................................24
Section 13.3. Replacement of Notes..................................................................24
Section 13.4. Agent Services........................................................................25
SECTION 14. PAYMENTS ON NOTES.....................................................................25
Section 14.1. Place of Payment......................................................................25
Section 14.2. Home Office Payment...................................................................25
SECTION 15. EXPENSES, ETC.........................................................................26
Section 15.1. Transaction Expenses..................................................................26
Section 15.2. Survival..............................................................................26
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................27
SECTION 17. AMENDMENT AND WAIVER..................................................................27
Section 17.1. Requirements..........................................................................27
Section 17.2. Solicitation of Holders of Notes......................................................27
Section 17.3. Binding Effect, Etc...................................................................28
Section 17.4. Notes Held by Company, Etc............................................................28
SECTION 18. NOTICES...............................................................................28
SECTION 19. REPRODUCTION OF DOCUMENTS.............................................................29
SECTION 20. CONFIDENTIAL INFORMATION..............................................................29
SECTION 21. SUBSTITUTION OF PURCHASER.............................................................30
SECTION 22. MISCELLANEOUS.........................................................................30
Section 22.1. Successors and Assigns................................................................30
Section 22.2. Payments Due on Non-Business Days.....................................................31
Section 22.3. Accounting Terms......................................................................31
Section 22.4. Severability..........................................................................31
Section 22.5. Construction, Etc.....................................................................31
Section 22.6. Counterparts..........................................................................31
Section 22.7. Governing Law.........................................................................31
Section 22.8. Jurisdiction and Process; Waiver of Jury Trial........................................31
iii
Schedule A -- Information Relating to Purchasers
Schedule B -- Defined Terms
Schedule 5.3 -- Disclosure Documents
Schedule 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
Schedule 5.5 -- Financial Statements Schedule
5.15 -- Existing Indebtedness
Exhibit 1 -- Form of 5.60% Senior Unsecured Note due November 29, 2016
Exhibit 4.4(a) -- Form of Opinion of Counsel for the Company
Exhibit 4.4(b) -- Form of Opinion of Special Counsel for the Company
iv
THE BROOKLYN UNION GAS COMPANY,
doing business as KEYSPAN ENERGY DELIVERY NEW YORK
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
5.60% Senior Unsecured Notes due November 29, 2016
November 29, 2006
TO EACH OF THE PURCHASERS LISTED IN
SCHEDULE A:
Ladies and Gentlemen:
THE BROOKLYN UNION GAS COMPANY, doing business as KEYSPAN ENERGY DELIVERY
NEW YORK, a New York corporation (the "Company"), agrees with each of the
purchasers whose names appear at the end hereof (each, a "Purchaser" and,
collectively, the "Purchasers") as follows:
Section 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $400,000,000 aggregate
principal amount of its 5.60% Senior Unsecured Notes due November 29, 2016 (the
"Notes", such term to include any such notes issued in substitution therefor
pursuant to Section 13). The Notes shall be substantially in the form set forth
in Exhibit 1. Certain capitalized and other terms used in this Agreement are
defined in Schedule B. References to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
Section 2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser's name in Schedule A at the purchase price of
100% of the principal amount thereof. The Purchasers' obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.
Section 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser shall
occur at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, 1301 Avenue of the Americas, New
York, New York, at 10:00 a.m., New York, New York time, at a closing (the
"Closing") on November 29, 2006 or on such other Business Day thereafter on or
prior to December 31, 2006, as may be agreed upon by the Company and the
Purchasers. At the Closing, the Company will deliver to each Purchaser the Notes
to be purchased by such Purchaser in the form of a single Note (or such greater
number of Notes in denominations of at least $100,000 as such Purchaser may
request), dated the date of the Closing and registered in such Purchaser's name
(or in the name of its nominee), against delivery by such Purchaser to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of the Company to account number ▇▇▇▇▇▇▇▇ at Citibank, N.A., New York,
New York, ABA # ▇▇▇▇▇▇▇▇▇, Reference: KEDNY/KEDLI Issuance. If at the Closing
the Company shall fail to tender such Notes to any Purchaser as provided above
in this Section 3, or any of the conditions specified in Section 4 shall not
have been fulfilled to such Purchaser's satisfaction, such Purchaser shall, at
its election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights such Purchaser may have by reason of such
failure or such nonfulfillment.
Section 4. CONDITIONS TO CLOSING.
Each Purchaser's obligation to purchase and pay for the Notes to be sold to
such Purchaser at the Closing is subject to the fulfillment to such Purchaser's
satisfaction or waiver, prior to or at the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing and after
giving effect to the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Section 5.14) no Default or Event of Default
shall have occurred and be continuing.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to such
Purchaser an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have
been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to such
Purchaser a certificate of its Secretary or Assistant Secretary, dated the
date of Closing, certifying as to the resolutions attached thereto and
other corporate proceedings relating to the authorization, execution and
delivery of the Notes and this Agreement.
2
Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance reasonably satisfactory to such Purchaser, dated
the date of the Closing (a) from ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq., General Counsel to
KeySpan Corporation and Counsel to the Company, covering the matters set forth
in Exhibit 4.4(a) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably request (and
the Company hereby instructs its counsel to deliver such opinion to the
Purchasers), (b) from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special counsel for the
Company, covering the matters set forth in Exhibit 4.4(b) and covering such
other matters incident to the transactions contemplated hereby as such Purchaser
or its counsel may reasonably request (and the Company hereby instructs its
special counsel to deliver such opinion to the Purchasers) and (c) from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, the Purchasers' special counsel, in connection with the
transactions contemplated hereby and covering such other matters incident to
such transactions as such Purchaser may reasonably request.
Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the
Closing such Purchaser's purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject such
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by such Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at the Closing as specified in Schedule
A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the reasonable fees, charges and disbursements of the Purchasers' special
counsel referred to in Section 4.4(c) to the extent reflected in a statement of
such counsel rendered to the Company at least one (1) Business Day prior to the
Closing.
Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with the SVO) shall have
been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. The Company shall not have
changed its jurisdiction of incorporation or organization, as applicable, or
been a party to any merger or consolidation or succeeded to all or any
substantial part of the liabilities of any other entity, at any time following
the date of the most recent financial statements referred to in Schedule 5.5.
3
Section 4.10. Funding Instructions. At least three (3) Business Days prior
to the date of the Closing, each Purchaser shall have received written
instructions signed by a Responsible Officer on letterhead of the Company
confirming the information specified in Section 3 including (i) the name and
address of the transferee bank, (ii) such transferee bank's ABA number and (iii)
the account name and number into which the purchase price for the Notes is to be
deposited.
Section 4.11. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to such Purchaser and its special counsel, and such
Purchaser and its special counsel shall have received all such counterpart
originals or certified or other copies of such documents as such Purchaser or
such special counsel may reasonably request.
Section 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agents, ▇.▇. ▇▇▇▇▇▇
Securities Inc. and RBS Greenwich Capital, has delivered to each Purchaser a
copy of a confidential Private Placement Memorandum, dated October, 2006 (the
"Memorandum"), relating to the transactions contemplated hereby. This Agreement,
the Memorandum and the documents, certificates or other writings delivered to
the Purchasers by or on behalf of the Company in connection with the
transactions contemplated hereby and identified in Schedule 5.3, and the
financial statements listed in Schedule 5.5 (this Agreement, the Memorandum and
such documents, certificates or other writings and such financial statements
delivered to each Purchaser prior to November 18, 2006 being referred to,
collectively, as the "Disclosure Documents"), taken as a whole, do not contain
4
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Disclosure
Documents, since December 31, 2005, there has been no change in the financial
condition, operations, business or properties of the Company or any of its
Subsidiaries except changes that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
Section 5.4. Organization and Ownership of Shares of Subsidiaries.
(a) Schedule 5.4 is a complete and correct list of the Company's
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization and the percentage of shares of each class
of its capital stock or similar equity interests outstanding owned by the
Company and each other Subsidiary.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and
clear of any Lien.
(c) Each Subsidiary identified in Schedule 5.4 is a corporation,
limited liability company or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate, limited liability
company or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the consolidated financial statements of
the Company and its Subsidiaries listed on Schedule 5.5. All of said financial
statements (including in each case the related schedules and notes) fairly
present in all material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments). The Company and its Subsidiaries do not have any
Material liabilities that are not disclosed on such financial statements or
otherwise disclosed in the Disclosure Documents.
Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other Material
5
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes, other than those that have
already been obtained and which are in full force and effect; provided, that no
representation is made with respect to compliance with foreign securities laws
or the securities or "blue sky" laws of the various States of the United States.
Section 5.8. Litigation; Observance of Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any Subsidiary
in any court or before any arbitrator of any kind or before or by any
Governmental Authority, other than those described under the heading
"Executive Summary - Recent Developments," and under the heading "Company
Overview - Environmental Matters," in the Memorandum and in Schedule 5.3,
that, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including, without limitation, Environmental Laws or the USA
Patriot Act) of any Governmental Authority, which default or violation,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all income
tax returns that are required to have been filed in any jurisdiction, and have
paid all taxes shown to be due and payable on such returns and all other taxes
and assessments payable by them, to the extent such taxes and assessments have
become due and payable and before they have become delinquent, except for any
taxes and assessments (i) the amount of which is not individually or in the
aggregate Material or (ii) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Federal income tax
liabilities of the Company and its Subsidiaries have been finally determined
(whether by reason of completed audits or the statute of limitations having run)
for all fiscal years up to and including the fiscal year ended September 30,
1996.
Section 5.10. Title to Property; Leases. The Company and its Subsidiaries
have good and sufficient title to their respective Material properties,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
6
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement, except for those defects in title and Liens that, individually
or in the aggregate, would not have a Material Adverse Effect. All Material
leases are valid and subsisting and are in full force and effect in all material
respects.
Section 5.11. Licenses, Permits, Etc. The Company and its Subsidiaries own
or possess all licenses, permits, franchises, authorizations, patents,
copyrights, proprietary software, service marks, trademarks and trade names, or
rights thereto, that are Material, without known conflict with the rights of
others, except for those conflicts that, individually or in the aggregate, would
not have a Material Adverse Effect.
Section 5.12. Compliance with ERISA.
(a) Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect: (i) each employee benefit
plan (as defined in section 3(3) of ERISA), that is, or within the
preceding five (5) years, has been established or maintained, or to which
contributions are, or within the preceding five years, have been made or
required to be made by the Company, has been operated and administered in
compliance with all applicable laws; (ii) neither the Company nor any ERISA
Affiliate has incurred any liabilities pursuant to ERISA or the penalty or
excise tax provisions of the Code for failure to comply with continuation
coverage obligations mandated by section 4980B of the Code with respect to
any employee welfare benefit plan (as defined in section 3(1) of ERISA);
and (iii) neither the Company nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to any employee pension benefit plan (as
defined in section 3(2) of ERISA), and no event, transaction or condition
has occurred or exists that would reasonably be expected to result in the
incurrence of any such liability by the Company, or in the imposition of
any Lien on any of the rights, properties or assets of the Company, in
either case pursuant to Title I or IV of ERISA or to such penalty or excise
tax provisions or to section 401(a)(29) or 412 of the Code or section 4068
of ERISA.
(b) The present value of the aggregate benefit liabilities
(determined on an "accrued benefit obligations" basis) under each of
the Plans, determined as of the end of such Plan's most recently ended
plan year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities by more than
$173,000,000 in the case of any single Plan and by more than
$173,000,000 in the aggregate for all Plans. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA and
the terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) Neither the Company nor, to the knowledge of the Company, any
of its ERISA Affiliates has incurred withdrawal liabilities (and are
not subject to contingent withdrawal liabilities) under section 4201
or 4204 of ERISA in respect of Multiemployer Plans that individually
or in the aggregate are Material.
7
(d) The expected postretirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No.
106, without regard to liabilities attributable to continuation
coverage mandated by section 4980B of the Code) of the Company and its
Subsidiaries, does not exceed the aggregate current value of assets
set aside to fund such obligations by more than $272,000,000.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that
is subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company to
each Purchaser in the first sentence of this Section 5.12(e) is made
in reliance upon and subject to the accuracy of such Purchaser's
representation in Section 6.2 as to the sources of the funds used to
pay the purchase price of the Notes to be purchased by such Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person other than the
Purchasers and not more than seventy-five (75) other Institutional Investors,
each of which has been offered the Notes at a private sale for investment.
Neither the Company nor anyone acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act or to the registration
requirements of any securities or blue sky laws of any applicable jurisdiction.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes (a) to refinance existing intercompany
Indebtedness of the Company and/or (b) for general corporate purposes. No part
of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). The Company or its
Subsidiaries do not own any margin stock and the Company does not have any
present intention that it or any of its Subsidiaries will own any margin stock.
As used in this Section 5.14, the terms "margin stock" and "purpose of buying or
carrying" shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Indebtedness.
(a) Schedule 5.15 sets forth a complete and correct description of all
outstanding Indebtedness of the Company and its Subsidiaries as of October 31,
2006 (including a description of the principal amount outstanding and collateral
therefor, if any, and Guaranty thereof, if any), since which date there has been
no Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Indebtedness of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default and no waiver of default is
8
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Subsidiary and no event or condition exists
with respect to any Indebtedness of the Company or any Subsidiary, the
outstanding principal amount of which exceeds $5,000,000, that would permit (or
that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.
(b) Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing
Indebtedness of the Company or such Subsidiary, any agreement relating
thereto or any other agreement (including, but not limited to, its charter
or other organizational document) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Indebtedness of the Company,
except as specifically indicated in Schedule 5.15.
Section 5.16. Foreign Assets Control Regulations, Etc.
(a) Neither the sale of the Notes by the Company hereunder nor its use
of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto.
(b) Neither the Company nor any Subsidiary (i) is a Person described
or designated in the Specially Designated Nationals and Blocked Persons
List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order or (ii) engages in any dealings or transactions with
any such Person. The Company and its Subsidiaries are in compliance, in all
material respects, with the USA Patriot Act.
(c) No part of the proceeds from the sale of the Notes hereunder will
be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party,
candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended, assuming in all cases that such Act
applies to the Company.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 2005, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 6. REPRESENTATIONS OF THE PURCHASERS.
Section 6.1. Purchase for Investment. Each Purchaser severally represents
that it is an "accredited investor" within the meaning of clause (1), (2), (3),
(7) or (8) of Rule 501(a) under the Securities Act and severally represents that
it is purchasing the Notes for its own account or for one or more separate
accounts maintained by such Purchaser or for the account of one or more pension
9
or trust funds, as for each of which such Purchaser exercises sole investment
discretion for investment purposes only, and not with a view to the distribution
thereof; provided, that the disposition of such Purchaser's or their property
shall at all times be within such Purchaser's or their control. Each Purchaser
understands that the Notes have not been, and will not be, registered under the
Securities Act, that the Company is not required to register the Notes and that
the Notes may be resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law.
Section 6.2. Source of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a "Source") to be used by such Purchaser to pay the purchase
price of the Notes to be purchased by such Purchaser hereunder:
(a) the Source is an "insurance company general account" (as the term
is defined in the United States Department of Labor's Prohibited
Transaction Exemption ("PTE") 95-60) in respect of which the reserves and
liabilities (as defined by the annual statement for life insurance
companies approved by the NAIC (the "NAIC Annual Statement")) for the
general account contract(s) held by or on behalf of any employee benefit
plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee
benefit plans maintained by the same employer (or affiliate thereof as
defined in PTE 95-60) or by the same employee organization in the general
account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus as
set forth in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is a separate account that is maintained solely in
connection with such Purchaser's fixed contractual obligations under which
the amounts payable, or credited, to any employee benefit plan (or its
related trust) that has any interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant)) are not
affected in any manner by the investment performance of the separate
account; or
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 and, except as
disclosed by such Purchaser to the Company in writing pursuant to this
clause (c), no employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns more than 10% of
all assets allocated to such pooled separate account or collective
investment fund; or
(d) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of PTE 84-14 (the "QPAM Exemption")) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same employer
or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and
10
managed by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this clause (d); or
(e) the Source constitutes assets of a "plan(s)" (within the meaning
of Section IV of PTE 96-23 (the "INHAM Exemption")) managed by an "in-house
asset manager" or "INHAM" (within the meaning of Part IV of the INHAM
Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption
are satisfied, neither the INHAM nor a person controlling or controlled by
the INHAM (applying the definition of "control" in Section IV(d) of the
INHAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such INHAM and (ii) the name(s) of the employee benefit plan(s)
whose assets constitute the Source have been disclosed to the Company in
writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
clause (g); or
(h) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan," "governmental
plan," and "separate account" shall have the respective meanings assigned to
such terms in section 3 of ERISA. Section 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of a Note or Notes that is an Institutional Investor:
(a) Quarterly Statements -- within sixty (60) days after the end of
each quarterly fiscal period in each fiscal year of the Company (other than
the last quarterly fiscal period of each such fiscal year), duplicate
copies of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such quarter; and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries for such
quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter; and
11
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments;
(b) Annual Statements -- within 105 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries, for such
year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by an opinion thereon of independent public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position
of the companies being reported upon and their results of operations and
cash flows and have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis for such opinion
in the circumstances;
(c) SEC and Other Reports -- promptly upon their becoming available,
one copy of (i) each financial statement, report, notice or proxy statement
sent by the Company or any Subsidiary to its principal lending banks as a
whole (excluding information sent to such banks in the ordinary course of
administration of a bank facility, such as information relating to pricing
and borrowing availability) or to its public securities holders generally,
(ii) each regular or periodic report, each registration statement that
shall have become effective (without exhibits except as expressly requested
by such holder), and each final prospectus and all amendments thereto filed
by the Company or any Subsidiary with the SEC, and (iii) each regular
periodic report to any entity that regulates the affairs of the Company
and/or its Subsidiaries (including, without limitation, the Federal Energy
Regulatory Commission and the New York Public Service Commission);
(d) Notice of Default or Event of Default -- promptly, and in any
event within five (5) Business Days after a Responsible Officer becoming
aware of the existence of any Default or Event of Default, a written notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto;
12
(e) ERISA Matters -- promptly, and in any event within ten (10)
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multi-employer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then existing,
would reasonably be expected to have a Material Adverse Effect; and
(f) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations under this Agreement and under the Notes as from time to time
may be reasonably requested by such holder of a Note or Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of a Note or Notes pursuant to Section 7.1(a) or Section
7.1(b) shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Financial Covenant Compliance -- to the extent a Financial
Covenant (as defined below) is at any time hereafter incorporated by
reference into this Agreement pursuant to Section 10.5(a) and is not deemed
deleted thereafter pursuant to Section 10.5(b), the information (including
detailed calculations) required in order to establish whether the Company
was in compliance with such Financial Covenant, during the quarterly or
annual period covered by the statements then being furnished (including
with respect to each such Financial Covenant, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Financial Covenant, and
the calculation of the amount, ratio or percentage then in existence);
provided, that the delivery of any such information and/or detailed
calculations that satisfy the requirements of the Other Debt (as defined
below) containing such Financial Covenant shall be deemed to satisfy the
requirements of this Section 7.2(a); and
13
(b) Event of Default -- a statement that such Senior Financial Officer
has reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Company shall have taken or proposes to take with respect thereto.
Section 7.3. Visitation. The Company shall permit the representatives of
each holder of a Note or Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Company's officers, and, with the consent of the Company (which consent
will not be unreasonably withheld) to visit the other offices and
properties of the Company and each Subsidiary, all at such reasonable times
and as often as may be reasonably requested in writing. Any such visit will
not unreasonably disturb or interfere with the normal operation or
maintenance of any facilities or surrounding areas or the conduct by the
Company and each Subsidiary of their business and will be in accordance
with the Company's or such Subsidiary's, and any operator of the Company or
such Subsidiary's, safety, security, insurance and confidentiality
programs; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Company to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants (and by this provision the Company authorizes said accountants
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries), all at such times and as often as may be requested.
Section 8. PAYMENT AND PREPAYMENT OF THE NOTES.
Section 8.1. Maturity. As provided therein, the entire unpaid principal
balance of the Notes shall be due and payable on the stated maturity date
thereof.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the Notes in an amount not less than five percent
(5.00%) of the aggregate principal amount of the Notes then outstanding in the
case of a partial prepayment, at 100% of the principal amount so prepaid, plus
14
the Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of a Note or Notes written
notice of each optional prepayment under this Section 8.2 not less than thirty
(30) days and not more than sixty (60) days prior to the date fixed for such
prepayment. Each such notice shall specify such date (which shall be a Business
Day), the aggregate principal amount of the Notes to be prepaid on such date,
the principal amount of each Note held by such holder to be prepaid (determined
in accordance with Section 8.3), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to the estimated
Make-Whole Amount due in connection with such prepayment (calculated as if the
date of such notice were the date of the prepayment), setting forth the details
of such computation. Two (2) Business Days prior to such prepayment, the Company
shall deliver to each holder of a Note or Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes, the principal amount of the Notes to be prepaid shall
be allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment (which shall be a Business Day), together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes or (b) pursuant to an offer to purchase made by the Company or an
Affiliate pro rata to the holders of all Notes at the time outstanding upon the
same terms and conditions. Any such offer shall provide each holder with
sufficient information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least twenty (20) Business Days. If the
holders of more than sixty six and two thirds percent (66?%) of the principal
amount of the Notes then outstanding accept such offer, the Company shall
promptly notify the remaining holders of such fact and the expiration date for
the acceptance by holders of Notes of such offer shall be extended by the number
of days necessary to give each such remaining holder at least ten (10) Business
Days from its receipt of such notice to accept such offer. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
15
Section 8.6. Make-Whole Amount. "Make-Whole Amount" means, with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the
Remaining Scheduled Payments with respect to the Called Principal of such Note
over the amount of such Called Principal; provided, that the Make-Whole Amount
may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields
reported as of 10:00 a.m. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page PX1" (or such other display as may replace Page
PX1) on Bloomberg Financial Markets (or, if Page PX1 is unavailable, the
Telerate Access Service Screen which corresponds most closely with Page
PX1) for the most recently issued actively traded on the run U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (or any comparable successor publication) for U.S.
Treasury securities having a constant maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date.
In the case of each determination under clause (i) or clause (ii), as
the case may be, of the preceding paragraph, such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury ▇▇▇▇ quotations
to bond equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (1) the applicable actively traded
on the run U.S. Treasury security with the maturity closest to and greater
than such Remaining Average Life and (2) the applicable actively traded on
the run U.S. Treasury security with the maturity closest to and less than
such Remaining Average Life. The Reinvestment Yield shall be rounded to the
number of decimal places as appears in the interest rate of the applicable
Note.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
16
obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date; provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
Section 12.1.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
Section 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Payments on the Notes. The Company will duly and punctually
pay the principal of, Make-Whole Amount or other premium, if any, and interest
on the Notes in accordance with the terms of this Agreement and the Notes, as
well as any other amounts due hereunder or thereunder.
Section 9.2. Compliance with Law. Without limiting Section 10.6, the
Company will and will cause each of its Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, the USA Patriot Act and
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
Section 9.3. Insurance. The Company will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business,
similarly situated and owning similar properties as the Company and its
Subsidiaries.
17
Section 9.4. Maintenance of Properties. The Company will and will cause
each of its Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times; provided, that this
Section 9.4 shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.5. Payment of Taxes. The Company will and will cause each of its
Subsidiaries to file all income tax or similar tax returns required to be filed
in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges,
or levies payable by any of them, to the extent the same have become due and
payable and before they have become delinquent; provided, that neither the
Company nor any Subsidiary need pay any such tax, assessment, charge or levy if
(i) the amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate proceedings,
and the Company or a Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary or (ii) the
nonpayment of all such taxes, assessments, charges and levies in the aggregate
would not reasonably be expected to have a Material Adverse Effect.
Section 9.6. Corporate Existence, Etc. Subject to Section 10.2, the Company
will at all times preserve and keep in full force and effect its corporate
existence. Subject to Section 10.2, the Company will at all times preserve and
keep in full force and effect the corporate existence of each of its
Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and
all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
would not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.7. Books and Records. The Company will, and will cause each of
its Subsidiaries to, maintain proper books of record and account in conformity
with GAAP and all applicable requirements of any Governmental Authority having
legal or regulatory jurisdiction over the Company or such Subsidiary, as the
case may be.
Section 9.8. Regulated Business. The Company will continue its status as a
regulated gas public utility company subject to regulation by the relevant
Governmental Authorities.
Section 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
18
Section 10.1. Transactions with Affiliates. The Company will not and will
not permit any Subsidiary to enter into directly or indirectly any Material
transaction or Material group of related transactions (including, without
limitation, the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or
another Subsidiary), except (i) as approved by any Governmental Authority or in
compliance with any law, order, rule or regulation of any Governmental Authority
or (ii) pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
Section 10.2. Merger, Consolidation, Etc. The Company will not consolidate
with or merge with any other Person or convey, transfer or lease all or
substantially all of its assets in a single transaction or series of
transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease all or
substantially all of the assets of the Company as an entirety, as the case
may be, shall be a solvent corporation or limited liability company
organized and existing under the laws of the United States or any State
thereof (including the District of Columbia), and, if the Company is not
such corporation or limited liability company, such corporation or limited
liability company shall have executed and delivered to each holder of any
Note or Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement and the Notes;
and
(b) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation or limited liability company that shall theretofore have become such
in the manner prescribed in this Section 10.2 from its liability under this
Agreement or the Notes.
Section 10.3. Line of Business. The Company will not and will not permit
any Subsidiary to engage in any business if, as a result, the general nature of
the business in which the Company and its Subsidiaries, taken as a whole, would
then be engaged would be substantially changed from the general nature of the
business in which the Company and its Subsidiaries, taken as a whole, are
engaged on the date of this Agreement as described in the Memorandum.
Section 10.4. Liens. If at any time the Company mortgages, pledges or
otherwise subjects to any Lien, other than Permitted Liens, the whole or any
part of any property or assets now owned or hereafter acquired by it except as
hereinafter provided in this Section 10.4, the Company will secure the then
outstanding Notes, and any other senior Indebtedness of the Company which may
then be outstanding and entitled to the benefit of a covenant similar in effect
to this covenant, equally and ratably with any Indebtedness secured by such
mortgage, pledge or Lien, for as long as any such Indebtedness is so secured.
19
Nothing contained in this Agreement prevents any entity other than the Company
from mortgaging, pledging or subjecting to any Lien any property or assets,
whether or not acquired by such person from the Company.
Section 10.5. Most Favored Noteholder.
(a) If, at any time after the Closing, the Company includes in any
new, or adds to any existing, Indebtedness (all new and existing
Indebtedness, "Other Debt") any restriction or other provision that
provides for limitations on Indebtedness, interest expense or net worth or
any other covenant that would be characterized as a "financial covenant" (a
"Financial Covenant") and such Financial Covenant is not contained in this
Agreement, then, contemporaneously upon the effectiveness of such Financial
Covenant with respect to the Other Debt, or amendment thereto, that
includes or adds such Financial Covenant, such Financial Covenant will be
deemed automatically incorporated by reference hereinto and will form an
integral part of this Agreement without any further action on the part of
any Person. Upon the inclusion or addition of a Financial Covenant into
Other Debt and its incorporation into this Agreement, the Company will
promptly deliver to each holder of a Note or Notes then outstanding a
notice setting forth such Financial Covenant (a "MFN Notice").
(b) Any Financial Covenant incorporated hereinto pursuant to Section
10.5(a) will (i) automatically be waived, amended or otherwise modified to
the extent of any waiver, amendment or other modification of such Financial
Covenant in the relevant Other Debt, and (ii) automatically be deemed
deleted herefrom at such time as the applicable Other Debt is terminated
and no amounts remain outstanding thereunder or such Financial Covenant is
otherwise deleted from such Other Debt (but the provisions of Section
10.5(a) shall be complied with by the Company with respect to any and all
subsequent Other Debt incurred that contains a Financial Covenant), in each
case without any further action on the part of any Person; provided, that,
upon the occurrence of an event set forth in the immediately preceding
clause (i) or (ii), the Company will promptly deliver written notice
thereof to each holder of a Note or Notes then outstanding.
Section 10.6. Terrorism Sanctions Regulations. The Company will not, and
will not permit any Subsidiary to, (a) become a Person described or designated
in the Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (b) engage
in any dealings or transactions with any such Person.
Section 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
20
(b) the Company defaults in the payment of any interest on any Note
for more than thirty (30) days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in Sections 11(a) and
(b)) and such default is not remedied within sixty (60) days after the
earlier of (i) a Responsible Officer obtaining actual knowledge of such
default and (ii) the Company receiving written notice of such default from
any holder of a Note or Notes (any such written notice to be identified as
a "notice of default" and to refer specifically to this Section 11(c)); or
(d) any representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in this Agreement or in any
writing furnished in connection with the transactions contemplated hereby
proves to have been false or incorrect in any material respect on the date
as of which made; or
(e) (i) the Company or any Significant Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $10,000,000 beyond
any period of grace provided with respect thereto, or (ii) the Company or
any Significant Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness in an
aggregate outstanding principal amount of at least $10,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared due and payable before its
stated maturity or before its regularly scheduled dates of payment; or
(f) the Company or any Significant Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(g) a court or Governmental Authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its
Significant Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any of its Significant Subsidiaries, or any such petition
shall be filed against the Company or any of its Significant Subsidiaries
and such petition shall not be dismissed within sixty (60) consecutive
days; or
21
(h) a final judgment or judgments for the payment of money aggregating
in excess of $50,000,000 are rendered against one or more of the Company
and its Significant Subsidiaries and which judgments are not, within sixty
(60) days after entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within sixty (60) days after the expiration of such
stay; or
(i) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the Company or any
ERISA Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (iv) the Company
or any ERISA Affiliate withdraws from any Multiemployer Plan, or (v) the
Company or any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in clauses (i) through
(v) above, either individually or together with any other such event or
events, would reasonably be expected to have a Material Adverse Effect.
As used in Section 11(i), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such
terms in section 3 of ERISA.
Section 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration.
(a) If an Event of Default with respect to the Company described in
Section 11(f) (other than an Event of Default described in clause (i) of
Section 11(f) or described in clause (vi) of Section 11(f) by virtue of the
fact that such clause encompasses clause (i) of Section 11(f)) or Section
11(g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or
notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in Section 11(a) or (b) has
occurred and is continuing, any holder or holders of a Note or Notes at the
22
time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes
held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note or Notes
has the right to maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Company in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note or Notes at the time outstanding may proceed to protect and enforce the
rights of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) neither the Company nor any other Person shall
have paid any amounts which have become due solely by reason of such
declaration, (c) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (d) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note or Notes in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
23
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements of one (1) special
counsel for all holders of the Notes.
Section 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note or Notes that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of a Note or Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to
the Company at the address and to the attention of the designated officer (all
as specified in Section 18(iii)), for registration of transfer or exchange (and
in the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder's attorney duly authorized in writing and whose signature has been
medallion guaranteed and accompanied by the relevant name, address and other
information for notices of each transferee of such Note or part thereof), within
ten (10) Business Days thereafter, the Company shall execute and deliver, at the
Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$100,000; provided, that if necessary to enable the registration of transfer by
a holder of its entire holding of Notes, one Note may be in a denomination of
less than $100,000. Any transferee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company at the
address and to the attention of the designated officer (all as specified in
Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and
24
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided, that if the holder of such Note is, or is a
nominee for, an original Purchaser or another holder of a Note or Notes
with a minimum net worth of at least $50,000,000 or a Qualified
Institutional Buyer, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
within ten (10) Business Days thereafter, the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
Section 13.4. Agent Services. Without in any manner limiting the
obligations of the Company under this Section 13, the Company may at its own
expense retain the services of one or more agents to perform any or all of its
obligations under this Section 13 and 14 and to perform certain other
administrative functions on behalf of the Company including, without limitation,
distribution of financial statements and other certificates and notices. As of
the date of this Agreement, such agent is ▇▇▇▇▇ Fargo Bank, N.A. acting out of
its office at Corporate Trust Services, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇ and the Company shall give prompt notice to the Purchasers or other
holders of Notes of any change in the identity of such agent.
Purchasers agree that they shall cooperate with such agent and deliver any
Notes, notices or other communications and any related documents as may be
required under Sections 13 and 14, as applicable, of this Agreement to such
agent, and shall comply with any requests reasonably made by the agent on the
Company's behalf pursuant to the provisions of such sections.
Section 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of ▇▇▇▇▇
Fargo Bank, N.A. in such jurisdiction. The Company may at any time, by notice to
each holder of a Note or Notes, change the place of payment of the Notes so long
as such place of payment shall be either the principal office of the Company in
such jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or its nominee
shall be the holder of any Note or Notes, and notwithstanding anything contained
in Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose below such
Purchaser's name in Schedule A, or by such other method or at such other address
as such Purchaser shall have from time to time specified to the Company in
writing for such purpose, without the presentation or surrender of such Note or
25
the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by a Purchaser or its nominee, such Purchaser will, at its
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by a
Purchaser under this Agreement and that has made the same agreement relating to
such Note as the Purchasers have made in this Section 14.2.
Section 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of not more than one (1) special counsel
and, if reasonably required by the Required Holders, local or other counsel)
incurred by the Purchasers and each other holder of a Note or Notes in
connection with such transactions (including, without limitation, reasonable
fees, charges and disbursements of the Purchasers' single counsel incurred on
and after the Closing with respect to preparation and delivery of closing
document sets and binders for the transactions contemplated hereby to the
holders of Notes and other Persons) and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes (whether
or not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note or Notes, (b) the costs and expenses,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Company or any Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby and by the
Notes and (c) the costs and expenses incurred in connection with the initial
filing of this Agreement and all related documents and financial information
with the SVO; provided, however, that such costs and expenses under this clause
(c) shall not exceed $5,000. The Company will pay, and will save each Purchaser
and each other holder of a Note or Notes harmless from, all claims in respect of
any fees, costs or expenses if any, of brokers and finders (other than those, if
any, retained by a Purchaser or other holder in connection with its purchase of
the Notes).
Section 15.2. Survival. The obligations of the Company under this Section
15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement or the Notes, and the termination
of this Agreement.
26
Section 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note
or Notes, regardless of any investigation made at any time by or on behalf of
such Purchaser or any other holder of a Note or Notes. All statements contained
in any certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between each
Purchaser and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
Section 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Purchaser unless consented
to by such Purchaser in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17, 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of a Note or
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a decision
is required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The Company will
deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 17 to each
holder of an outstanding Note or Notes promptly following the date on which
it is executed and delivered by, or receives the consent or approval of,
the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security or provide other credit
support, to any holder of a Note or Notes as consideration for or as an
inducement to the entering into by any holder of a Note or Notes or any
waiver or amendment of any of the terms and provisions hereof unless such
27
remuneration is concurrently paid, or security is concurrently granted or
other credit support concurrently provided, on the same terms, ratably to
each holder of a Note or Notes then outstanding even if such holder did not
consent to such waiver or amendment.
(c) Consent in Contemplation of Transfer. Any consent made pursuant to
this Section 17.2 by the holder of any Note or Notes that has transferred
or has agreed to transfer such Note to the Company, any Subsidiary or any
Affiliate of the Company and has provided or has agreed to provide such
written consent as a condition to such transfer shall be void and of no
force or effect except solely as to such holder, and any amendments
effected or waivers granted or to be effected or granted that would not
have been or would not be so effected or granted but for such consent (and
the consents of all other holders of a Note or Notes that were acquired
under the same or similar conditions) shall be void and of no force or
effect except solely as to such transferring holder.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of a Note or Notes
and is binding upon them and upon each future holder of any Note or Notes and
upon the Company without regard to whether such Note has been marked to indicate
such amendment or waiver. No such amendment or waiver will extend to or affect
any obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No course of dealing
between the Company and the holder of any Note or Notes nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note or Notes. As used herein, the term "this
Agreement" and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
Section 18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid); provided that any financial statements and certificates sent pursuant
to Section 7.1 and 7.2 shall be sent by first class mail. Any such notice must
be sent:
(i) if to any Purchaser or its nominee, to such Purchaser or nominee
at the address specified for such communications in Schedule A, or at such
other address as such Purchaser or nominee shall have specified to the
Company in writing,
28
(ii) if to any other holder of any Note or Notes, to such holder at
such address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of Secretary, or at such other
address as the Company shall have specified to the holder of each Note in
writing.
Notices under this Section 18 will be deemed given only when actually received.
Section 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves) and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of a Note or Notes from contesting any such
reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
Section 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement; provided, that such term does not include
information that (a) was publicly known or otherwise known to such Purchaser
prior to the time of such disclosure, (b) subsequently becomes publicly known
through no act or omission by such Purchaser or any person acting on such
Purchaser's behalf, (c) otherwise becomes known to such Purchaser other than
through disclosure by the Company or any Subsidiary or (d) constitutes financial
statements delivered to such Purchaser under Section 7.1 that are otherwise
publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser
in good faith to protect confidential information of third parties delivered to
such Purchaser; provided, that such Purchaser may deliver or disclose
Confidential Information to (i) its directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by its Notes), (ii)
its financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note or Notes, (iv) any
29
Institutional Investor to which it sells or offers to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which it offers to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over such
Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization,
or any nationally recognized rating agency that requires access to information
about such Purchaser's investment portfolio, or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to such Purchaser,
(x) in response to any subpoena or other legal process, (y) in connection with
any litigation to which such Purchaser is a party or (z) if an Event of Default
has occurred and is continuing, to the extent such Purchaser may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under such
Purchaser's Notes and this Agreement. Each holder of a Note or Notes, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note or Notes of information required to be delivered to such
holder under this Agreement or requested by such holder (other than a holder
that is a party to this Agreement or its nominee), such holder will enter into
an agreement with the Company embodying the provisions of this Section 20.
Section 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of its Affiliates
as the purchaser of the Notes that it has agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both such
Purchaser and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Section 6.
Upon receipt of such notice, any reference to such Purchaser in this Agreement
(other than in this Section 21), shall be deemed to refer to such Affiliate in
lieu of such original Purchaser. In the event that such Affiliate is so
substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon
receipt by the Company of notice of such transfer, any reference to such
Affiliate as a "Purchaser" in this Agreement (other than in this Section 21),
shall no longer be deemed to refer to such Affiliate, but shall refer to such
original Purchaser, and such original Purchaser shall again have all the rights
of an original holder of a Note or Notes under this Agreement.
Section 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
30
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note or Notes) whether so
expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding (but without limiting the
requirement in Section 8.4 that the notice of any optional prepayment specify a
Business Day as the date fixed for such prepayment), any payment of principal of
or Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day; provided, that if the maturity date of any Note is
a date other than a Business Day, the payment otherwise due on such maturity
date shall be made on the next succeeding Business Day and shall include the
additional days elapsed in the computation of interest payable on such next
succeeding Business Day.
Section 22.3. Accounting Terms. All accounting terms used herein which are
not expressly defined in this Agreement have the meanings respectively given to
them in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP.
Section 22.4. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.5. Construction, Etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.
Section 22.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
Section 22.7. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York.
Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The
Company irrevocably submits to the non-exclusive jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New
31
York, over any suit, action or proceeding arising out of or relating to this
Agreement or the Notes. To the fullest extent permitted by applicable law, the
Company irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the jurisdiction of
any such court, any objection that it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
(b) The Company consents to process being served by or on behalf of any
holder of a Note or Notes in any suit, action or proceeding of the nature
referred to in Section 22.8(a) by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid,
return receipt requested, to it at its address specified in Section 18 or at
such other address of which such holder shall then have been notified pursuant
to said Section. The Company agrees that such service upon receipt (i) shall be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall, to the fullest extent permitted by
applicable law, be taken and held to be valid personal service upon and personal
delivery to it. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or
any reputable commercial delivery service.
(c) Nothing in this Section 22.8 shall affect the right of any holder of a
Note or Notes to serve process in any manner permitted by law, or limit any
right that the holders of any of the Notes may have to bring proceedings against
the Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(D) THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON
OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH.
[The remainder of this page is intentionally left blank.]
32
If you are in agreement with the foregoing, please sign the form of
agreement on a counterpart of this Agreement and return it to the Company,
whereupon this Agreement shall become a binding agreement between you and the
Company.
Very truly yours,
THE BROOKLYN UNION GAS COMPANY,
doing business as KEYSPAN ENERGY
DELIVERY NEW YORK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and Treasurer
33
This Agreement is hereby
accepted and agreed to as
of the date hereof.
/s/ AXA Equitable Life Insurance Company
----------------------------------------
/s/ Horizon Blue Cross Blue Shield of New Jersey
------------------------------------------------
/s/ MONY Life Insurance Company
-------------------------------
/s/ MONY Life Insurance Company of America
------------------------------------------
/s/ Country Life Insurance Company
----------------------------------
/s/ Great-West Life & Annuity Insurance Company
-----------------------------------------------
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company
---------------------------------------
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company (U.S.A.)
------------------------------------------------
/s/ Metropolitan Life Insurance Company
---------------------------------------
/s/ Metlife Insurance Company of Connecticut
--------------------------------------------
/s/ ▇▇▇▇▇▇ Property Insurance Company
-------------------------------------
/s/ Chase Insurance Life and Annuity Company
--------------------------------------------
/s/ Chase Insurance Life AND Annuity Company - KILICO Wilton RE Bermuda
-----------------------------------------------------------------------
/s/ Chase Insurance Life AND Annuity Company - Wilton Re Bermuda #247594
------------------------------------------------------------------------
/s/ Chase Insurance Life AND Annuity Company - Wilton Re US #247595
-------------------------------------------------------------------
/s/ The Prudential Insurance Company of America
-----------------------------------------------
/s/ The Prudential Life Insurance Company, Ltd.
-----------------------------------------------
/s/ Gibraltar Life Insurance Co., Ltd.
--------------------------------------
/s/ Farmers New World Life Insurance Company
--------------------------------------------
/s/ Union Security Insurance Company
------------------------------------
/s/ Time Insurance Company
--------------------------
/s/ American Bankers Insurance Company of Florida, Inc.
-------------------------------------------------------
/s/ American Security Insurance Company
---------------------------------------
/s/ Zurich American Insurance Company
-------------------------------------
/s/ Security Benefit Life Insurance Company, Inc.
--------------------------------------------------
/s/ State Farm Life Insurance Company
-------------------------------------
/s/ State Farm Life and Accident Assurance Company
--------------------------------------------------
/s/ The Travelers Indemnity Company
-----------------------------------
/s/ Teachers Insurance and Annuity Association of America
---------------------------------------------------------
/s/ Thrivent Financial for Lutherans
------------------------------------
34
Schedule B - Defined Terms
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Company.
"Anti-Terrorism Order" means Executive Order No. 13,224 of September 24,
2001, Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as
amended.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means The Brooklyn Union Gas Company, doing business as KeySpan
Energy Delivery New York, a New York corporation, or any successor that becomes
such in the manner prescribed in Section 10.2.
"Confidential Information" is defined in Section 20.
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means that rate of interest that is the greater of (i) two
percent (2.00)% per annum above the rate of interest stated in clause (a) of the
first paragraph of the Notes and (ii) two percent (2.00%) per annum over the
rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to
time in New York, New York as its "base" or "prime" rate.
"Disclosure Documents" is defined in Section 5.3.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including, but not limited to,
those related to Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.
"Event of Default" is defined in Section 11.
"Financial Covenant" is defined in Section 10.5.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any other jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or other substances that might pose a hazard to health and safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law,
including, but not limited to, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum, petroleum products, lead based paint,
radon gas or similar restricted, prohibited or penalized substances.
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such property);
(c) (i) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases and (ii) all liabilities which would
appear on its balance sheet in accordance with GAAP in respect of Synthetic
Leases assuming such Synthetic Leases were accounted for as Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and
other financial institutions (whether or not representing obligations for
borrowed money);
(f) the aggregate net liability represented by the Swap Termination
Value of all Swap Contracts of such Person, other than Swap Contracts
entered into in the ordinary course of business and not for speculative
purposes; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
"Institutional Investor" means (a) any Purchaser, (b) any holder of a Note
or Notes holding (together with one or more of its affiliates) $1,000,000 or
more of the aggregate principal amount of the Notes then outstanding, (c) any
bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form, and (d) any Related Fund of any holder of any Note or
Notes.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, (b) the ability of the Company to
perform its obligations under this Agreement and the Notes or (c) the validity
or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"MFN Notice" is defined in Section 10.5.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in section 4001(a)(3) of ERISA) to which the Company or any
ERISA Affiliate is making or accruing an obligation to make contributions, or
has, within any of the preceding five (5) plan years, made or accrued an
obligation to make contributions or with respect to which the Company or any
ERISA Affiliate may have any liability.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto.
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"Other Debt" is defined in Section 10.5.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Liens" means, without duplication,
(a) any purchase-money mortgage or Lien or other Lien to which any
property or asset acquired by the Company is subject as of the date of its
acquisition by the Company;
(b) any deposit or pledge to secure public or statutory obligations or
with any governmental agency at any time required by law in order to
qualify the Company to conduct its business or any part thereof or in order
to entitle it to maintain self-insurance or to obtain the benefits of any
law relating to workmen's compensation, unemployment insurance, old age
pensions or other social security;
(c) any Lien with any court, board, commission or governmental agency
as security by the Company incident to the proper conduct of any proceeding
before it;
(d) any Lien for taxes, assessments or governmental charges or levies
of the Company not yet delinquent or being contested in good faith by
appropriate proceedings diligently conducted, if such reserve or other
appropriate provision, if any, as shall be required by generally accepted
accounting principles shall have been made therefor;
(e) any Liens of landlords or mechanics and materialmen incurred by
the Company in the ordinary course of business for sums not yet due or
being contested in good faith by appropriate proceedings diligently
conducted, if such reserve or other appropriate provision, if any, as shall
be required by generally accepted accounting principles, shall have been
made therefor;
(f) any lease or sublease granted to others by the Company in the
ordinary course of business; easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business and
not interfering with the ordinary conduct of the business of the Company;
(g) any Lien incurred in connection with the issuance by a state or
political subdivision thereof of any securities with respect to the Company
the interest on which is exempt from federal income taxes by virtue of
Section 103 of the Code or any other laws or regulations in effect at the
time of such issuance; and
(h) any Lien for the sole purpose of extending, renewing or replacing
in whole or in part the Indebtedness secured by any Lien referred to in the
foregoing clauses or in this clause; provided, however, that the principal
amount of Indebtedness secured thereby shall not exceed the principal
amount of Indebtedness secured at the time of such extension, renewal or
replacement and that such extension, renewal or replacement shall be
limited to all or a part of the property which secured the Lien so
extended, renewed or replaced (plus improvements on such property).
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, business entity or
Governmental Authority.
"Plan" means an "employee pension benefit plan" (as defined in section 3(2)
of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is
or, within the preceding five years, has been established or maintained, or to
which contributions are or, within the preceding five years, have been made or
required to be made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a Person that is
preferred over any other class of capital stock (or similar equity interests) of
such Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.
"property" or "properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇ or
inchoate.
"PTE" is defined in Section 6.2(a).
"Purchaser" is defined in the first paragraph of this Agreement.
"Qualified Institutional Buyer" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"Related Fund" means, with respect to any holder of any Note or Notes, any
fund or entity that (i) invests in Securities or bank loans, and (ii) is advised
or managed by such holder, the same investment advisor as such holder or by an
affiliate of such holder or such investment advisor.
"Required Holders" means, at any time, the holders of at least fifty-one
percent (51.0%) in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"SEC" shall mean the Securities and Exchange Commission of the United
States, or any successor thereto.
"Securities" or "Security" shall have the meaning specified in Section 2(1)
of the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in
effect.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Significant Subsidiary" means at any time any Subsidiary that would at
such time constitute a "significant subsidiary" (as such term is defined in
Regulation S-X of the SEC as in effect on the date of the Closing) of the
Company.
"Subsidiary" means, as to any Person, any other Person in which such first
Person or one or more of its Subsidiaries or such first Person and one or more
of its Subsidiaries owns sufficient equity or voting interests to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
second Person, and any partnership or joint venture if more than a 50% interest
in the profits or capital thereof is owned by such first Person or one or more
of its Subsidiaries or such first Person and one or more of its Subsidiaries
(unless such partnership or joint venture can and does ordinarily take major
business actions without the prior approval of such first Person or one or more
of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"SVO" means the Securities Valuation Office of the NAIC or any successor to
such Office.
"Swap Contract" means (a) any and all interest rate swap transactions,
basis swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward foreign exchange transactions, cap
transactions, floor transactions, currency options, spot contracts or any other
similar transactions or any of the foregoing (including, but without limitation,
any options to enter into any of the foregoing), and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc. or any
International Foreign Exchange Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amounts(s) determined as
the ▇▇▇▇-to-market values(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts.
"Synthetic Lease" means, at any time, any lease (including leases that may
be terminated by the lessee at any time) of any property (a) that is accounted
for as an operating lease under GAAP and (b) in respect of which the lessee
retains or obtains ownership of the property so leased for United States federal
income tax purposes, other than any such lease under which such Person is the
lessor.
"USA Patriot Act" means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary all of the
equity interests (except directors' qualifying shares) and voting interests of
which are owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries at such time.