Draft of Thursday, November 14, 1996
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THE BERKSHIRE GAS COMPANY
NOTE AGREEMENT
Dated as of November 1, 1996
Re: $16,000,000 7.80% Senior Notes
Due November 15, 2021
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
Parties ........................................................................ 1
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT. .......................... 1
Section 1.1. Description of Notes .......................................... 1
Section 1.2. Commitment, Closing Date ...................................... 1
Section 1.3. Redemption of 8.4% Preferred Stock ............................ 2
SECTION 2. PREPAYMENT OF NOTES. .......................................... 2
Section 2.1. Required Prepayments .......................................... 2
Section 2.2. Optional Prepayment with Premium .............................. 2
Section 2.3. Notice of Optional Prepayments ................................ 3
Section 2.4. Application of Prepayments .................................... 3
Section 2.5. Direct Payment ................................................ 3
SECTION 3. REPRESENTATIONS. .............................................. 3
Section 3.1. Representations of the Company ................................ 3
Section 3.2. Representations of the Purchaser .............................. 4
SECTION 4. CLOSING CONDITIONS ............................................ 4
Section 4.1. Conditions .................................................... 4
Section 4.2. Waiver of Conditions .......................................... 5
SECTION 5. COMPANY COVENANTS ............................................. 5
Section 5.1. Corporate Existence, Etc ...................................... 5
Section 5.2. Insurance ..................................................... 5
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws ... 5
Section 5.4. Maintenance, Etc .............................................. 6
Section 5.5. Nature of Business ............................................ 6
Section 5.7. Limitations on Restricted Subsidiary Debt ..................... 6
Section 5.8. Fixed Charges Coverage Ratio .................................. 7
Section 5.9. Limitation on Liens ........................................... 7
Section 5.10. Restricted Payments ........................................... 8
Section 5.11. Mergers, Consolidations and Sales of Assets ................... 9
Section 5.12. Guaranties .................................................... 11
Section 5.13. Repurchase of Notes ........................................... 11
Section 5.14. Transactions with Affiliates .................................. 11
Section 5.15. Termination of Pension Plans .................................. 12
Section 5.16. Designation of Restricted Subsidiaries ........................ 12
Section 5.17. Reports and Rights of Inspection .............................. 12
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR ....................... 15
Section 6.1. Events of Default ............................................. 15
Section 6.2. Notice to Holders ............................................. 16
Section 6.3. Acceleration of Maturities .................................... 16
Section 6.4. Rescission of Acceleration .................................... 17
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS .............................. 17
Section 7.1. Consent Required .............................................. 17
Section 7.2. Solicitation of Holders ....................................... 18
Section 7.3. Effect of Amendment or Waiver ................................. 18
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS ...................... 18
Section 8.1. Definitions ................................................... 18
Section 8.2. Accounting Principles ......................................... 27
Section 8.3. Directly or Indirectly ........................................ 27
SECTION 9. MISCELLANEOUS ................................................. 28
Section 9.1. Registered Notes .............................................. 28
Section 9.2. Exchange of Notes ............................................. 28
Section 9.3. Loss, Theft, Etc. of Notes .................................... 28
Section 9.4. Conversion of Notes to First Mortgage Bond .................... 28
Section 9.5. Expenses, Stamp Tax Indemnity ................................. 30
Section 9.6. Powers and Rights Not Waived; Remedies Cumulative ............. 30
Section 9.7. Notices ....................................................... 30
Section 9.8. Successors and Assigns ........................................ 31
Section 9.9. Survival of Covenants and Representations ..................... 31
Section 9.10. Severability .................................................. 31
Section 9.11. Governing Law ................................................. 31
Section 9.12. Captions ...................................................... 31
Signature Page ................................................................. 32
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Name of Note Purchaser
Schedule II -- Liens Securing Debt (including Capitalized Leases) as of
the Closing Date
Exhibit A -- Form of 7.80% Senior Note due November 15, 2021
Exhibit B -- Representations and Warranties of the Company
Exhibit C -- Description of Special Counsel's Closing Opinion
Exhibit D -- Description of Closing Opinion of Counsel to the Company
THE BERKSHIRE GAS COMPANY
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
NOTE AGREEMENT
Re: $16,000,000 7.80% Senior Notes
Due November 15, 2021
Dated as of
November 1, 1996
First Colony Life Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. Box 1980
Lynchburg, Virginia 24505
The undersigned, THE BERKSHIRE GAS COMPANY, a Massachusetts
corporation (the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of $16,000,000 aggregate principal amount of its 7.80% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from
such date at the rate of 7.80% per annum, payable quarterly on the fifteenth
day of each February, May, August and November in each year commencing
February 15, 1997 and at maturity and to bear interest on overdue principal
(including any overdue required prepayment of principal or any overdue
optional prepayment of principal pursuant to [SECTION]2.2) and premium, if
any, and (to the extent legally enforceable) on any overdue installment of
interest at the rate of 8.80% per annum after the date due, whether by
acceleration or otherwise, until paid, to be expressed to mature on November
15, 2021, and to be substantially in the form attached hereto as Exhibit A.
Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months. The Notes are not subject to prepayment at the option
of the Company prior to their expressed maturity dates except on the terms
and conditions and in the amounts and with the premium, if any, set forth in
[SECTION]2 of this Agreement. The term "Notes" as used herein shall include
each Note delivered pursuant to this Agreement. You are sometimes
hereinafter referred to as the "Purchaser".
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you and you
agree to purchase from the Company the entire issue of the Notes at a price
equal to the principal amount thereof on the Closing Date hereinafter
mentioned.
Delivery of the Notes will be made at the offices of ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, against payment
therefor in Federal Reserve or other funds current and immediately available
at the principal office of Fleet Bank of Massachusetts, National
Association, ABA Number ▇▇▇▇▇▇▇▇▇, Malden, Massachusetts, to the account of
The Berkshire Gas Company, Account Number ▇▇▇▇▇▇▇▇, in the amount of the
purchase price at 10:00 A.M. Chicago, Illinois time, on November 15, 1996 or
such later date (not later than November 30, 1996) as shall mutually be
agreed upon by the Company and the Purchaser (the "Closing Date"). The
Notes delivered to you on the Closing Date will be in the form of a single
registered Note in the form attached hereto as Exhibit A for the full amount
of your purchase (unless different denominations are specified by you),
registered in your name or in the name of your nominee, all as may be
specified in Schedule I attached hereto.
Section 1.3. Redemption of 8.4% Preferred Stock. Concurrently with
the issuance of the Notes by the Company on the Closing Date, the Company
will redeem 80,000 shares of its Class B Cumulative Preferred Stock, Series
8.4% (the "8.4% Preferred Stock") which are held by you at a price of
$117.00 per share plus the dividend accrued on such shares to the Closing
Date, to be paid to you in exchange for your delivery to the Company on the
Closing Date of the stock certificates representing such 8.4% Preferred
Stock.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. The Company agrees that on
November 15 in each year, commencing November 15, 2011 and ending November
15, 2020, both inclusive, it will prepay and apply and there shall become
due and payable on the principal indebtedness evidenced by the Notes an
amount equal to the lesser of (i) $1,454,545.45 or (ii) the principal amount
of the Notes then outstanding. The entire remaining principal amount of the
Notes shall become due and payable on November 15, 2021. No premium shall
be payable in connection with any required prepayment made pursuant to this
[SECTION]2.1. For purposes of this [SECTION]2.1, any prepayment of less
than all of the outstanding Notes pursuant to [SECTION]2.2 shall be deemed
to be applied first, to the amount of principal scheduled to be paid on
November 15, 2021, and then to the remaining scheduled principal payments in
inverse chronological order.
In the event of any purchase or other acquisition by the Company of
less than all of the Notes, the amount of the payment required at maturity
and each prepayment required to be made pursuant to this [SECTION]2.1 shall
be reduced in the proportion that the principal amount of such purchase or
other acquisition bears to the unpaid principal amount of the Notes
immediately prior to such purchase or other acquisition (after giving effect
to any prepayment made pursuant to this [SECTION]2.1 on the date of such
purchase or other acquisition).
Section 2.2. Optional Prepayment with Premium. In addition to the
payments required by [SECTION]2.1, upon compliance with [SECTION]2.3 the
Company shall have the privilege, at any time and from time to time, of
prepaying the outstanding Notes, either in whole or in part (but if in part
then in a minimum principal amount of $100,000) by payment of the principal
amount of the Notes, or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment, together with a premium equal to the
Make-Whole Amount, determined as of five business days prior to the date of
such prepayment pursuant to this [SECTION]2.2.
Section 2.3. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to [SECTION]2.2 to each
Holder thereof not less than 30 days nor more than 60 days before the date
fixed for such optional prepayment specifying (i) such date, (ii) the
principal amount of the Holder's Notes to be prepaid on such date, (iii)
that a premium may be payable, (iv) the date when such premium will be
calculated, (v) the estimated premium, and (vi) the accrued interest
applicable to the prepayment. Such notice of prepayment shall also certify
all facts, if any, which are conditions precedent to any such prepayment.
Notice of prepayment having been so given, the aggregate principal amount of
the Notes specified in such notice, together with accrued interest thereon
and the premium, if any, payable with respect thereto shall become due and
payable on the prepayment date specified in said notice. Not later than two
business days prior to the prepayment date specified in such notice, the
Company shall provide each Holder written notice of the premium, if any,
payable in connection with such prepayment and, whether or not any premium
is payable, a reasonably detailed computation of the Make-Whole Amount.
Section 2.4. Application of Prepayments. All partial prepayments
pursuant to [SECTION]2.1 or [SECTION]2.2 shall be applied on all outstanding
Notes ratably in accordance with the unpaid principal amounts thereof.
Section 2.5. Direct Payment. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any Note
owned by any Holder that is the Purchaser or any other Institutional Holder
which has given written notice to the Company requesting that the provisions
of this [SECTION]2.5 shall apply, the Company will punctually pay when due
the principal thereof, interest thereon and premium, if any, due with
respect to said principal, without any presentment thereof, directly to such
Holder at its address set forth in Schedule I hereto or such other address
as such Holder may from time to time designate in writing to the Company or,
if a bank account with a United States bank is so designated for such
Holder, the Company will make such payments in immediately available funds
to such bank account, marked for attention as indicated, or in such other
manner or to such other account in any United States bank as such Holder may
from time to time direct in writing.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents
and warrants that all representations and warranties set forth in Exhibit B
are true and correct as of the date hereof and are incorporated herein by
reference with the same force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchaser. The Purchaser
represents, and in entering into this Agreement the Company understands,
that the Purchaser is acquiring the Notes for the purpose of investment and
not with a view to the distribution thereof, and that the Purchaser has no
present intention of selling, negotiating or otherwise disposing of the
Notes; it being understood, however, that the disposition of the Purchaser's
property shall at all times be and remain within its control. The Purchaser
further represents that the source of funds to be used by it to purchase the
Notes is an "insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued
July 12, 1995) and the purchase of the notes by the Purchaser is eligible
for exemption under, and satisfies the requirements of, PTE 95-60.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase the Notes on
the Closing Date and present the 8.4% Preferred Stock for redemption
pursuant to [SECTION]1.3 hereof shall be subject to the performance by the
Company of its agreements hereunder which by the terms hereof are to be
performed at or prior to the time of delivery of the Notes and to the
following further conditions precedent:
(a) Closing Certificate. You shall have received a certificate
dated the Closing Date, signed by the President or the Chief Financial
Officer of the Company, the truth and accuracy of which shall be a
condition to your obligation to purchase the Notes proposed to be sold
to you and to the effect that (i) the representations and warranties
of the Company set forth in Exhibit B hereto are true and correct on
and with respect to the Closing Date, (ii) the Company has performed
all of its obligations hereunder which are to be performed on or prior
to the Closing Date, and (iii) no Default or Event of Default has
occurred and is continuing.
(b) Legal Opinions. You shall have received from ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, who are acting as your special counsel in this transaction,
and from Rich, May, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., counsel for the
Company, their respective opinions dated the Closing Date, in form and
substance satisfactory to you, and covering the matters set forth in
Exhibits C and D, respectively, hereto.
(c) Regulatory Approval. You shall have obtained an order
issued by the Massachusetts Department of Public Utilities (the "DPU")
authorizing the issue and sale of the Notes, which authorization shall
not contain any conditions burdensome to the Company and which
authorization shall be final and the statutory appeal period for which
shall have expired.
(d) Private Placement Number. A private placement number for
the Notes shall have been obtained from Standard and Poor's
Corporation.
(e) Rating of the Notes. You shall have received satisfactory
evidence that the Notes have been accorded a current rating of "2" or
better from the National Association of Insurance Commissioners.
(f) Payment of Fees and Disbursements of Special Counsel. The
Company shall have paid the reasonable fees and disbursements of
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the Purchaser.
(g) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and
all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to you and your special counsel,
and you shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in connection
with the consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the
Company fails to tender to you the Notes to be issued to you on such date or
if the conditions specified in [SECTION]4.1 have not been fulfilled, you may
thereupon elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions specified in
[SECTION]4.1 have not been fulfilled, you may waive compliance by the
Company with any such condition to such extent as you may in your sole
discretion determine. Nothing in this [SECTION]4.2 shall operate to relieve
the Company of any of its obligations hereunder or to waive your rights
against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will preserve and
keep in full force and effect, and will cause each Restricted Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its business;
provided, however, that the foregoing shall not prevent any transaction
permitted by [SECTION]5.11.
Section 5.2. Insurance. The Company will maintain, and will cause
each Restricted Subsidiary to maintain, insurance coverage by financially
sound and reputable insurers in such forms and amounts and against such
risks as are customary for corporations of established reputation engaged in
the same or a similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or
such Restricted Subsidiary, respectively, or upon or in respect of all or
any part of the property or business of the Company or such Restricted
Subsidiary, all trade accounts payable in accordance with usual and
customary business terms, and all claims for work, labor or materials, which
if unpaid might become a Lien upon any property of the Company or such
Restricted Subsidiary; provided, however, that the Company or such
Restricted Subsidiary shall not be required to pay any such tax, assessment,
charge, levy, account payable or claim if (i) the validity, applicability or
amount thereof is being contested in good faith by appropriate actions or
proceedings which will prevent the forfeiture or sale of any property of the
Company or such Restricted Subsidiary or any material interference with the
use thereof by the Company or such Restricted Subsidiary, and (ii) the
Company or such Restricted Subsidiary shall set aside on its books, reserves
deemed by it to be adequate with respect thereto. The Company will promptly
comply and will cause each Restricted Subsidiary to comply with all laws,
ordinances or governmental rules and regulations to which it is subject
including, without limitation, the Occupational Safety and Health Act of
1970, as amended, ERISA and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all applicable
jurisdictions, the violation of which could materially and adversely affect
the properties, business, prospects, profits or condition of the Company and
its Restricted Subsidiaries or would result in any Lien not permitted under
[SECTION]5.9.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve
and keep, and will cause each Restricted Subsidiary to maintain, preserve
and keep, its properties which are used or useful in the conduct of its
business (whether owned in fee or a leasehold interest) in good repair and
working order and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the efficiency
thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which would
then be engaged in by the Company and its Restricted Subsidiaries would be
substantially changed from the general nature of the business engaged in by
the Company and its Restricted Subsidiaries on the Closing Date. For
purposes of the preceding sentence, the general nature of the business of
the Company and its Restricted Subsidiaries shall not be deemed to be
substantially changed from that engaged in on the Closing Date so long as
not less than 80% of the net sales of the Company and its Restricted
Subsidiaries for any fiscal year ending after the Closing Date shall be
derived from energy operations and related businesses of the Company and its
Restricted Subsidiaries.
Section 5.6. Limitations on Consolidated Funded Debt. The Company
will at all times maintain Consolidated Funded Debt in an aggregate amount
which does not exceed 65% of Consolidated Adjusted Capitalization.
Section 5.7. Limitations on Restricted Subsidiary Debt. (a) The
Company will not permit any Restricted Subsidiary to create, incur or assume
or in any manner become liable in any respect of any Debt, if at the time of
creation, incurrence or assumption thereof or becoming liable therefor and
after giving effect thereto and the application of the proceeds thereof the
aggregate amount of Debt of the Company's Restricted Subsidiaries would
exceed an amount equal to 15% of Consolidated Adjusted Total Capitalization.
(b) Any corporation which becomes a Restricted Subsidiary after the
date hereof shall for all purposes of this [SECTION]5.7 be deemed to have
created, assumed or incurred at the time it becomes a Restricted Subsidiary
all Debt of such corporation existing immediately after it becomes a
Restricted Subsidiary.
Section 5.8. Fixed Charges Coverage Ratio. The Company will keep and
maintain the ratio of Net Income Available for Fixed Charges to Fixed
Charges for each period of four consecutive fiscal quarters at not less than
1.50 to 1.00.
Section 5.9. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets, whether
now owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any property for the purpose of subjecting the same to the payment
of obligations in priority to the payment of its or their general creditors,
or acquire or agree to acquire, or permit any Restricted Subsidiary to
acquire, any property or assets upon conditional sales agreements or other
title retention devices, except:
(a) Liens for property taxes and assessments or governmental
charges or levies and ▇▇▇▇▇ securing claims or demands of mechanics
and materialmen, provided payment thereof is not at the time required
by [SECTION]5.3;
(b) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted Subsidiary
shall at any time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens)
and Liens to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or appeal bonds
or other Liens of like general nature incurred in the ordinary course
of business and not in connection with the borrowing of money;
provided in each case, the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company and its Restricted Subsidiaries;
(e) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to another Wholly-owned Restricted Subsidiary;
(f) Liens existing as of the Closing Date and reflected in
Schedule II hereto;
(g) Liens incurred after the Closing Date given to secure the
payment of the purchase price incurred in connection with the
acquisition of fixed assets useful and intended to be used in carrying
on the business of the Company or a Restricted Subsidiary, including
Liens existing on such fixed assets at the time of acquisition thereof
or at the time of acquisition by the Company or a Restricted
Subsidiary of any business entity then owning such fixed assets,
whether or not such existing Liens were given to secure the payment of
the purchase price of the fixed assets to which they attach so long as
they were not incurred, extended or renewed in contemplation of such
acquisition, provided that (i) the Lien shall attach solely to the
fixed assets acquired or purchased, (ii) at the time of acquisition of
such fixed assets, the aggregate amount remaining unpaid on all Debt
secured by Liens on such fixed assets whether or not assumed by the
Company or a Restricted Subsidiary shall not exceed an amount equal to
80% (or 100% in the case of Capitalized Leases) of the lesser of the
total purchase price or fair market value at the time of acquisition
of such fixed assets (as determined in good faith by the Board of
Directors of the Company), (iii) all such Debt shall have been
incurred within the applicable limitations provided in
[SECTION][SECTION]5.6 and 5.7 and (iv) the aggregate Debt secured by
such Liens does not exceed an amount equal to 10% of Consolidated
Adjusted Total Assets; and
(h) Liens other than those described in clauses (a) through (g)
of this [SECTION]5.9 created or incurred after the Closing Date given
to secure Debt of the Company or any Restricted Subsidiary, provided
that after giving effect to such Debt and to the application of the
proceeds thereof (1) all Debt of the Company and its Restricted
Subsidiaries secured by Liens (other than Debt secured by Liens
excepted or permitted by the foregoing clauses (a) through (g) of this
[SECTION]5.9) shall not exceed 10% of Consolidated Adjusted Total
Assets, and (2) all such Debt shall have been incurred within the
applicable limitations provided in [SECTION][SECTION]5.6 and 5.7;
provided, further that no Additional First Mortgage Bonds may be
issued pursuant to this [SECTION]5.9(h) unless on or prior to the
issuance of such Additional First Mortgage Bonds, all outstanding
Notes shall have been converted into First Mortgage Bonds in
compliance with [SECTION]9.4.
Section 5.10. Restricted Payments. The Company will not except as
hereinafter provided:
(a) Declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of capital stock of the
Company);
(b) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any
class or any warrants, rights or options to purchase or acquire any
shares of its capital stock (other than in exchange for or out of the
net cash proceeds to the Company from the substantially concurrent
issue or sale of other shares of capital stock of the Company or
warrants, rights or options to purchase or acquire any shares of its
capital stock); or
(c) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such
other payments or distributions being herein collectively called "Restricted
Payments"), if after giving effect thereto any Event of Default shall have
occurred and be continuing or Consolidated Adjusted Tangible Net Worth shall
be less than $23,000,000.
The Company will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after the date of declaration
thereof.
For the purposes of this [SECTION]5.10, the amount of any Restricted
Payment declared, paid or distributed in property shall be deemed to be the
greater of the book value or fair market value (as determined in good faith
by the Board of Directors of the Company) of such property at the time of
the making of the Restricted Payment in question.
Section 5.11. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Restricted Subsidiary to, (i)
consolidate with or be a party to a merger with any other corporation or
(ii) sell, lease or otherwise dispose of all or any substantial part (as
defined in paragraph (d) of this [SECTION]5.11) of the assets of the Company
and its Restricted Subsidiaries; provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or
into the Company or any Wholly-owned Restricted Subsidiary so long as
in any merger or consolidation involving the Company, the Company
shall be the surviving or continuing corporation;
(2) the Company may consolidate or merge with any other
corporation so long as (i) if the Company shall be the surviving or
continuing corporation, (y) at the time of such consolidation or
merger and after giving effect thereto no Default or Event of Default
shall have occurred and be continuing, and (z) after giving effect to
such consolidation or merger a Restricted Subsidiary would be
permitted to incur at least $1.00 of additional Debt under the
provisions of [SECTION]5.7, and (ii) if the surviving or continuing
corporation is not the Company, (v) the corporation which results from
such merger or consolidation shall be incorporated under the laws of
the United States or any state thereof, have substantially all of its
assets and the assets of its Subsidiaries located within the United
States and be engaged principally in the ownership and operation of a
regulated public utility, (w) such resulting entity shall execute and
deliver to the registered Holders of the Notes an agreement
satisfactory in form and substance to such Holders ratifying and
confirming this Agreement and the Notes and expressly assuming the due
and punctual payment of the principal and premium, if any, and
interest on all of the Notes, according to their tenor, and the due
and punctual performance and observance of all of the covenants in the
Notes and this Agreement to be performed and observed by the Company,
(x) at the time of such consolidation or merger and after giving
effect thereto no Default or Event of Default shall have occurred and
be continuing, (y) after giving effect to such consolidation or merger
the subsidiaries of such surviving corporation would be permitted to
incur at least $1.00 of additional Debt pursuant to [SECTION]5.7, and
(z) the surviving corporation shall deliver to the registered Holders
of the Notes an opinion, satisfactory in form and substance to the
registered Holders of the Notes, of counsel satisfactory to the
registered Holders of the Notes, to the effect that all requirements
of this [SECTION]5.11(a)(2) have been satisfied; and
(3) any Restricted Subsidiary may sell, lease or otherwise
dispose of all or any substantial part of its assets to the Company or
any Wholly-owned Restricted Subsidiary.
(b) The Company will not permit any Restricted Subsidiary to issue or
sell any shares of stock of any class (including as "stock" for the purposes
of this [SECTION]5.11, any warrants, rights or options to purchase or
otherwise acquire stock or other Securities exchangeable for or convertible
into stock) of such Restricted Subsidiary to any Person other than the
Company or a Wholly-owned Restricted Subsidiary, except for the purpose of
qualifying directors, or except in satisfaction of the validly pre-existing
preemptive rights of minority shareholders in connection with the
simultaneous issuance of stock to the Company and/or a Restricted Subsidiary
whereby the Company and/or such Restricted Subsidiary maintain their same
proportionate interest in such Restricted Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose of any
shares of stock of any Restricted Subsidiary (except to qualify directors)
or any Indebtedness of any Restricted Subsidiary, and will not permit any
Restricted Subsidiary to sell, transfer or otherwise dispose of (except to
the Company or a Wholly-owned Restricted Subsidiary) any shares of stock or
any Indebtedness of any other Restricted Subsidiary, unless:
(1) simultaneously with such sale, transfer, or disposition,
all shares of stock and all Indebtedness of such Restricted Subsidiary
at the time owned by the Company and by every other Restricted
Subsidiary shall be sold, transferred or disposed of as an entirety;
(2) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed
sale, transfer or disposition of said shares of stock and Indebtedness
is in the best interests of the Company;
(3) said shares of stock and Indebtedness are sold, transferred
or otherwise disposed of to a Person, for a cash consideration and on
terms reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(4) the Restricted Subsidiary being disposed of shall not have
any continuing investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of; and
(5) such sale or other disposition does not involve a
substantial part (as hereinafter defined) of the assets of the Company
and its Restricted Subsidiaries.
(d) As used in this [SECTION]5.11, a sale, lease or other disposition
of assets shall be deemed to be a "substantial part" of the assets of the
Company and its Restricted Subsidiaries if the book value of such assets,
when added to the book value of all other assets sold, leased or otherwise
disposed of by the Company and its Restricted Subsidiaries (other than in
the ordinary course of business) during the 12-month period ending with the
date of such sale, lease or other disposition, exceeds 10% of Consolidated
Adjusted Total Assets, determined as of the end of the immediately preceding
fiscal year; provided, however, that assets shall not be deemed to be sold,
leased or otherwise disposed of for purposes of the computations required by
the preceding provisions of this paragraph to the extent that the net
proceeds therefrom remaining after satisfying any indebtedness secured by
such assets shall, within 180 days from the date of such sale, lease or
disposition thereof by the Company or its Restricted Subsidiary, as the case
may be, either (i) be used to purchase capital assets for the Company and/or
its Restricted Subsidiaries of a nature similar to and having a value at
least equal to, the assets sold to obtain such proceeds, or (ii) applied to
prepay the Notes or other Funded Debt of the Company or its Restricted
Subsidiaries which is not subordinated to the Notes in right of payment.
Section 5.12. Guaranties. The Company will not, and will not permit
any Restricted Subsidiary to, become or be liable in respect of any Guaranty
except Guaranties by the Company which are limited in amount to a stated
maximum dollar exposure or which constitute Guaranties of obligations
incurred by any Restricted Subsidiary in compliance with the provisions of
this Agreement.
Section 5.13. Repurchase of Notes. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase
or make any offer to repurchase any Notes unless an offer has been made to
repurchase Notes, pro rata, from all Holders at the same time and upon the
same terms. In case the Company repurchases or otherwise acquires any
Notes, such Notes shall immediately thereafter be canceled and no Notes
shall be issued in substitution therefor. Without limiting the foregoing,
upon the repurchase or other acquisition of any Notes by the Company, any
Restricted Subsidiary or any Affiliate (or upon the agreement of Company,
any Restricted Subsidiary or any Affiliate to purchase or otherwise acquire
any Notes), such Notes shall no longer be outstanding for purposes of any
section of this Agreement relating to the taking by the Holders of any
actions with respect hereto, including, without limitation, [SECTION]6.3,
[SECTION]6.4 and [SECTION]7.1.
Section 5.14. Transactions with Affiliates. The Company will not,
and will not permit any Restricted Subsidiary to, enter into or be a party
to any transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except in the ordinary
course of and pursuant to the reasonable requirements of the Company's or
such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than would
obtain in a comparable arm's-length transaction with a Person other than an
Affiliate.
Section 5.15. Termination of Pension Plans. The Company will not and
will not permit any Subsidiary to withdraw from any Multiemployer Plan or
permit any employee benefit plan maintained by it to be terminated if such
withdrawal or termination could result in withdrawal liability (as described
in Part 1 of Subtitle E of Title IV of ERISA) or the imposition of a Lien on
any property of the Company or any Subsidiary pursuant to Section 4068 of
ERISA.
Section 5.16. Designation of Restricted Subsidiaries. The Company
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary by
giving written notice within 30 days after such designation to each Holder
that the Board of Directors of the Company has made such designation,
provided, however, that no Unrestricted Subsidiary may be designated a
Restricted Subsidiary unless, at the time of such action and after giving
effect thereto, (i) no Default or Event of Default shall have occurred and
be continuing, and (ii) the Restricted Subsidiaries would be permitted to
incur at least $1.00 of additional Debt under the provisions of
[SECTION]5.7(a). A Restricted Subsidiary may not be designated or otherwise
become an Unrestricted Subsidiary.
Section 5.17. Reports and Rights of Inspection. The Company will
keep, and will cause each Restricted Subsidiary to keep, proper books of
record and account in which full and correct entries will be made of all
dealings or transactions of, or in relation to, the business and affairs of
the Company or such Restricted Subsidiary, in accordance with GAAP
consistently applied (except for changes disclosed in the financial
statements furnished to the Holders pursuant to this [SECTION]5.17 and
concurred in by the independent public accountants referred to in
[SECTION]5.17(b) hereof), and will furnish to each Holder (in duplicate if
so specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated
figures for the fiscal year then most recently ended,
(2) consolidated statements of income of the Company and
its Restricted Subsidiaries for such quarterly fiscal period and
for the portion of the fiscal year ending with such quarterly
fiscal period, in each case setting forth in comparative form
the consolidated figures for the corresponding periods of the
preceding fiscal year, and
(3) consolidated statements of cash flows of the Company
and its Restricted Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the corresponding
period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company; provided, however, that so
long as the Company has no Unrestricted Subsidiaries and so long as such
delivery is made within the time requirement set forth above in this
paragraph (a), delivery pursuant to paragraph (d) below of copies of the
Quarterly Report on Form 10-Q of the Company for such quarterly period
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this paragraph (a);
(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained
earnings and cash flows of the Company and its Restricted
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated
figures for the preceding fiscal year, all in reasonable detail and
accompanied by a report thereon of Deloitte & Touche LLP or another
firm of independent public accountants of recognized national standing
selected by the Company to the effect that the consolidated financial
statements present fairly, in all material respects, the consolidated
financial position of the Company and its Restricted Subsidiaries as
of the end of the fiscal year being reported on and the consolidated
results of the operations and cash flows for said year in conformity
with GAAP and that the examination of such accountants in connection
with such financial statements has been conducted in accordance with
generally accepted auditing standards and included such tests of the
accounting records and such other auditing procedures as said
accountants deemed necessary in the circumstances; provided, however,
that so long as the Company has no Unrestricted Subsidiaries and so
long as such delivery is made within the time requirement set forth
above in this paragraph (b), delivery pursuant to paragraph (d) below
of copies of the Annual Report on Form 10-K of the Company for such
fiscal year (together with the Company's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the
Securities Exchange Act) prepared in accordance with the requirements
therefor filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this paragraph (b);
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the
books of the Company or any Restricted Subsidiary and any management
letter received from such accountants in connection with such interim
or special audits;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or
proxy statement sent by the Company to stockholders generally and of
each regular or periodic report, and any registration statement or
prospectus filed by the Company or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency, and copies of any orders in any proceedings to which the
Company or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (i) a Reportable Event with respect to any Plan;
(ii) the institution of any steps by the Company, any ERISA Affiliate,
the PBGC or any other person to terminate any Plan; (iii) the
institution of any steps by the Company or any ERISA Affiliate to
withdraw from any Plan; (iv) a non-exempt "prohibited transaction"
within the meaning of Section 406 of ERISA in connection with any
Plan; (v) any material increase in the contingent liability of the
Company or any Restricted Subsidiary with respect to any post-
retirement welfare liability; or (vi) the taking of any action by, or
the threatening of the taking of any action by, the Internal Revenue
Service, the Department of Labor or the PBGC with respect to any of
the foregoing;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the information
and computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the requirements of
[SECTION]5.6 through [SECTION]5.15 at the end of the period covered by
the financial statements then being furnished, and (ii) whether there
existed as of the date of such financial statements and whether, to
the best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying
the nature and period of existence thereof and the action the Company
is taking and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they
have reviewed this Agreement and stating further whether, in making
their audit, such accountants have become aware of any Default or
Event of Default under any of the terms or provisions of this
Agreement insofar as any such terms or provisions pertain to or
involve accounting matters or determinations, and if any such
condition or event then exists, specifying the nature and period of
existence thereof;
(h) Unrestricted Subsidiaries. Within the respective periods
provided in paragraphs (a) and (b) above, financial statements of the
character and for the dates and periods as in said paragraphs (a) and
(b) provided covering each Unrestricted Subsidiary (or groups of
Unrestricted Subsidiaries on a consolidated basis); and
(i) Requested Information. With reasonable promptness, such
other data and information as such Institutional Holder may reasonably
request.
Without limiting the foregoing, the Company will permit each Institutional
Holder (or such Persons as such Institutional Holder may designate), to
visit and inspect, under the Company's guidance, any of the properties of
the Company or any Restricted Subsidiary, to examine all of their 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, employees, and independent public
accountants (and by this provision the Company authorizes said accountants
to discuss with any Institutional Holder the finances and affairs of the
Company and its Restricted Subsidiaries) all at such reasonable times and as
often as may be reasonably requested. The Company shall not be required to
pay or reimburse any Holder for expenses which such Holder may incur in
connection with any such visitation or inspection, except that if such
visitation or inspection is made during any period when a Default or an
Event of Default shall have occurred and be continuing, the Company agrees
to reimburse such Holder for all such expenses promptly upon demand.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue
for more than five days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in [SECTION]2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or premium, if any, thereon at the expressed
or any accelerated maturity date or at any date fixed for prepayment;
or
(d) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of
the principal of or interest on any Debt (other than the Notes) of the
Company or any Restricted Subsidiary in an aggregate amount exceeding
$1,000,000 and such default shall continue beyond the period of grace,
if any, allowed with respect thereto; or
(e) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Debt of the
Company or any Restricted Subsidiary may be issued and such default or
event shall continue for a period of time sufficient to permit the
acceleration of the maturity of such Debt of the Company or any
Restricted Subsidiary outstanding thereunder in an aggregate amount
exceeding $1,000,000; or
(f) Default shall occur in the observance or performance of any
covenant or agreement contained in [SECTION]5.6 through [SECTION]5.11;
or
(g) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after the earlier of (i) the day on which the Company first obtains
knowledge of such default, or (ii) the day on which written notice
thereof is given to the Company by any Holder; or
(h) Any representation or warranty made by the Company herein,
or made by the Company in any statement or certificate furnished by
the Company in connection with the consummation of the issuance and
delivery of the Notes or furnished by the Company pursuant hereto, is
untrue in any material respect as of the date of the issuance or
making thereof; or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $100,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or assets
of either and any one of such judgments has remained unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period of
30 days from the date of its entry; or
(j) A custodian, liquidator, trustee or receiver is appointed
for the Company or any Restricted Subsidiary or for the major part of
the property of either and is not discharged within 30 days after such
appointment; or
(k) The Company or any Restricted Subsidiary becomes insolvent
or bankrupt, is generally not paying its debts as they become due or
makes an assignment for the benefit of creditors, or the Company or
any Restricted Subsidiary applies for or consents to the appointment
of a custodian, liquidator, trustee or receiver for the Company or
such Restricted Subsidiary or for the major part of the property of
either; or
(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Restricted Subsidiary and, if instituted
against the Company or any Restricted Subsidiary, are consented to or
are not dismissed within 60 days after such institution.
Section 6.2. Notice to Holders. When any Event of Default described
in the foregoing [SECTION]6.1 has occurred, or if any Holder or the holder
of any other evidence of Funded Debt or Current Debt of the Company gives
any notice or takes any other action with respect to a claimed default, the
Company agrees to give notice within three business days of such event to
all Holders.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of [SECTION]6.1 has happened and is
continuing, any Holder may, and when any Event of Default described in
paragraphs (d) through (j), inclusive, of said [SECTION]6.1 has happened and
is continuing, any Holder or Holders holding 25% or more of the principal
amount of Notes at the time outstanding may, by notice to the Company,
declare the entire principal and all interest accrued on all Notes to be,
and all Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph
(k) or (l) of [SECTION]6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or notice of
any kind. Upon the Notes becoming due and payable as a result of any Event
of Default as aforesaid, the Company will forthwith pay to the Holders, the
entire principal and interest accrued on the Notes and, to the extent not
prohibited by applicable law, an amount as liquidated damages for the loss
of the bargain evidenced hereby (and not as a penalty) equal to the Make-
Whole Amount, determined as of the date on which the Notes shall so become
due and payable. No course of dealing on the part of the Holder or Holders
nor any delay or failure on the part of any Holder to exercise any right
shall operate as a waiver of such right or otherwise prejudice such Holder's
rights, powers and remedies. The Company further agrees, to the extent
permitted by law, to pay to the Holder or Holders all reasonable costs and
expenses incurred by them in the collection of any Notes upon any default
hereunder or thereon, including reasonable compensation to such Holder's or
Holders' attorneys for all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of
[SECTION]6.3 are subject to the condition that if the principal of and
accrued interest on all or any outstanding Notes have been declared
immediately due and payable by reason of the occurrence of any Event of
Default described in paragraphs (a) through (j), inclusive, of [SECTION]6.1,
the Holders holding 66-2/3% in aggregate principal amount of the Notes then
outstanding may, by written instrument filed with the Company, rescind and
annul such declaration and the consequences thereof, provided that at the
time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under [SECTION]6.3) shall
have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to [SECTION]7.1;
and provided further, that no such rescission and annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended
or compliance therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the Company shall
have obtained the consent in writing of the Holders holding at least 66-2/3%
in aggregate principal amount of outstanding Notes; provided, however, that
without the written consent of all of the Holders, no such amendment or
waiver shall be effective (i) which will change the time of payment
(including any prepayment required by [SECTION]2.1) of the principal of or
the interest on any Note or change the principal amount thereof or change
the rate of interest thereon, or (ii) which will change any of the
provisions with respect to optional prepayments, or (iii) which will change
the percentage of Holders required to consent to any such amendment or
waiver of any of the provisions of this [SECTION]7 or [SECTION]6.
Section 7.2. Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each Holder (irrespective of the amount of
Notes then owned by it) shall be informed thereof by the Company and shall
be afforded the opportunity of considering the same and shall be supplied by
the Company with sufficient information to enable it to make an informed
decision with respect thereto. 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, to any Holder as
consideration for or as an inducement to entering into by any Holder of any
waiver or amendment of any of the terms and provisions of this Agreement or
the Notes unless such remuneration is concurrently offered, on the same
terms, ratably to all Holders.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the Holders and shall be binding upon
them, upon each future Holder and upon the Company, whether or not any Note
shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein defined:
"Additional First Mortgage Bonds" shall mean First Mortgage Bonds
issued after the Closing Date other than (i) bonds issued in exchange for,
in connection with a transfer of the ownership of, or as a replacement for
lost, mutilated, stolen or destroyed, First Mortgage Bonds which are
outstanding on the Closing Date and (ii) First Mortgage Bonds issued to the
Holders of the Notes upon conversion of the Notes pursuant to [SECTION]9.4.
"Additional Funded Debt" shall mean the amount, if any, by which (i)
the lowest average of the highest balances of Consolidated Current Debt
outstanding on any three consecutive Current Debt Test Dates during the 12-
month period immediately preceding any date of determination exceeds (ii)
the Current Debt Basket Amount for such date.
"Affiliate" shall mean any Person (other than a Restricted Subsidiary)
(i) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company,
(ii) which beneficially owns or holds 5% or more of any class of the Voting
Stock of the Company or (iii) 5% or more of the Voting Stock (or in the case
of a Person which is not a corporation, 5% or more of the equity interest)
of which is beneficially owned or held by the Company or a Subsidiary. The
term "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 Stock, by contract or otherwise.
"Agreement" shall mean this Note Agreement.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated
balance sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean The Berkshire Gas Company, a Massachusetts
corporation, and any Person who succeeds to all, or substantially all, of
the assets and business of The Berkshire Gas Company.
"Consolidated Adjusted Tangible Net Worth" shall mean Consolidated
Tangible Net Worth less Restricted Investments.
"Consolidated Adjusted Total Assets" shall mean (a) total assets of
the Company and its Restricted Subsidiaries determined on a consolidated
basis in accordance with GAAP, less (b) Restricted Investments.
"Consolidated Adjusted Capitalization" shall mean (a) the sum of (i)
Consolidated Tangible Net Worth plus (ii) Consolidated Funded Debt, less (b)
Restricted Investments.
"Consolidated Adjusted Total Capitalization" shall mean (a) the sum of
(i) Consolidated Tangible Net Worth plus (ii) Consolidated Total Debt, less
(b) Restricted Investments.
"Consolidated Current Debt" shall mean Current Debt of the Company and
its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP.
"Consolidated Funded Debt" shall mean Funded Debt of the Company and
its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP plus Additional Funded Debt.
"Consolidated Net Income" for any period shall mean the gross revenues
of the Company and its Restricted Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined on
a consolidated basis after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such
excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have
been acquired in any manner by the Company or any Restricted
Subsidiary, realized by such corporation prior to the date of such
acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted
Subsidiary shall have consolidated or which shall have merged into or
with the Company or a Restricted Subsidiary prior to the date of such
consolidation or merger;
(f) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest unless such net earnings shall
have actually been received by the Company or such Restricted
Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of
dividends to the Company or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the
amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
the Company or any Restricted Subsidiary; and
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been
made from income arising during such period.
"Consolidated Tangible Net Worth" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the Company
and its Restricted Subsidiaries after deducting therefrom all items which,
in accordance with GAAP, would be included on the liability and equity side
of a consolidated balance sheet except capital stock of any class, surplus
and retained earnings.
"Consolidated Total Debt" shall mean the sum of Consolidated Funded
Debt plus Consolidated Current Debt.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (i) all Indebtedness of such Person for borrowed money
other than Funded Debt of such Person and (ii) Guaranties by such Person of
Current Debt of others.
"Current Debt Basket Amount" shall mean for any date the amount
specified as follows for the fiscal year in which such date shall occur:
(i) for the fiscal years ending on or before June 30, 1998, $5,000,000, (ii)
for the fiscal year ending June 30, 1999, $4,000,000, (iii) for the fiscal
year ending June 30, 2000, $3,000,000, (iv) for the fiscal year ending June
30, 2001, $2,000,000, (v) for the fiscal year ending June 30, 2002,
$1,000,000, and (vi) for the fiscal year ending June 30, 2003 and each
fiscal year occurring thereafter, $-0-.
"Current Debt Test Date" shall mean the first and fifteenth days of
each month, provided that, if any such day is not a business day, then the
Current Debt Test Date shall be the business day which shall first occur
thereafter.
"Debt" of any Person shall mean all Funded Debt and all Current Debt
of such Person.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in section
414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in [SECTION]6.1.
"First Mortgage Bonds" shall mean any Bonds issued under the First
Mortgage Bond Indenture.
"First Mortgage Bond Indenture" shall mean that certain First Mortgage
Indenture and Deed of Trust dated as of July 1, 1954 between the Company
(f/k/a Pittsfield Coal Gas Company) and Chemical Bank & Trust Company, as
Trustee, as such First Mortgage Indenture and Deed of Trust has heretofore
been and may hereafter be amended, modified or supplemented.
"Fixed Charges" for any period shall mean on a consolidated basis the
sum of (i) all Rentals (other than Rentals on Capitalized Leases) payable
during such period by the Company and its Restricted Subsidiaries, and (ii)
all Interest Charges on all Debt (including the interest component of
Rentals on Capitalized Leases) of the Company and its Restricted
Subsidiaries.
"Funded Debt" of any Person shall mean (i) all Indebtedness of such
Person for borrowed money or which has been incurred in connection with the
acquisition of assets in each case having a final maturity of one or more
than one year from the date of origin thereof (or which is renewable or
extendible at the option of the obligor for a period or periods more than
one year from the date of origin), including all payments in respect thereof
that are required to be made within one year from the date of any
determination of Funded Debt, whether or not the obligation to make such
payments shall constitute a current liability of the obligor under GAAP,
(ii) all Capitalized Rentals of such Person, and (iii) all Guaranties by
such Person of Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles at the time
in the United States.
"Guaranties" by any Person shall mean all obligations (other than
endorsements 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 (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any property or assets constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or other
balance sheet condition or otherwise to advance or make available funds for
the purchase or payment of such Indebtedness or obligation, (iii) to lease
property or to purchase Securities or other property or services primarily
for the purpose of assuring the owner of such Indebtedness or obligation of
the ability of the primary obligor to make payment of the Indebtedness or
obligation, or (iv) otherwise to assure the owner of the Indebtedness or
obligation of the primary obligor against loss in respect thereof. For the
purposes of all computations made under this Agreement, a Guaranty in
respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness
equal to the maximum aggregate amount of such obligation, liability or
dividend.
"Holder" shall mean any Person which is, at the time of reference, the
registered Holder of any Note.
"Indebtedness" of any Person shall mean and include all obligations of
such Person which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person, and in any event shall
include all (i) obligations of such Person for borrowed money or which has
been incurred in connection with the acquisition of property or assets, (ii)
obligations secured by any Lien upon property or assets owned by such
Person, even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and
remedies of the seller, lender or lessor under such agreement in the event
of default are limited to repossession or sale of property, (iv) Capitalized
Rentals and (v) Guaranties of obligations of others of the character
referred to in this definition.
"Institutional Holder" shall mean any Holder which is the Purchaser or
an insurance company, bank, savings and loan association, trust company,
investment company, charitable foundation, employee benefit plan (as defined
in ERISA) or other institutional investor or financial institution and, for
purposes of the direct payment provisions of this Agreement, shall include
any nominee of any such Holder.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Indebtedness for
which such calculations are being made.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition
of shares of capital stock, indebtedness or other obligations or Securities
or by loan, advance, capital contribution or otherwise; provided, however,
that "Investments" shall not mean or include routine investments in property
to be used or consumed in the ordinary course of business.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and including
but not limited to the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances (including, with respect to stock, stockholder agreements,
voting trust agreements, buy-back agreements and all similar arrangements)
affecting property. For the purposes of this Agreement, the Company or a
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, Capitalized Lease
or other arrangement pursuant to which title to the property has been
retained by or vested in some other Person for security purposes and such
retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (i) the aggregate present
value as of the date of such prepayment of each dollar of principal being
prepaid (taking into account the application of such prepayment required by
[SECTION]2.1) and the amount of interest (exclusive of interest accrued to
the date of prepayment) that would have been payable in respect of such
dollar if such prepayment had not been made, determined by discounting such
amounts at the Reinvestment Rate from the respective dates on which they
would have been payable, over (ii) 100% of the principal amount of the
outstanding Notes being prepaid. If the Reinvestment Rate is equal to or
higher than 7.80%, the Make-Whole Amount shall be zero. For purposes of any
determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean 0.50%, plus the arithmetic mean
of the yields for the two columns under the heading "Week Ending"
published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of the
principal being prepaid (taking into account the application of such
prepayment required by [SECTION]2.1). If no maturity exactly
corresponds to such Weighted Average Life to Maturity, yields for the
published maturity next longer than the Weighted Average Life to
Maturity and for the published maturity next shorter than the Weighted
Average Life to Maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated from such yields on a straight-line basis, rounding in
each of such relevant periods to the nearest month. For the purposes
of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole
Amount shall be used. "Statistical Release" shall mean the then most
recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded U.S. Government
Securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination hereunder,
then such other reasonably comparable index which shall be designated
by the Holders holding 66-2/3% in aggregate principal amount of the
outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (i) multiplying (x) the
remainder of (1) the amount of principal that would have become due on
each scheduled payment date if such prepayment had not been made, less
(2) the amount of principal on the Notes scheduled to become due on
such date after giving effect to such prepayment and the application
thereof in accordance with the provisions of [SECTION]2.1, by (y) the
number of years (calculated to the nearest one-twelfth) which will
elapse between the date of determination and such scheduled payment
date, and (ii) totaling the products obtained in (i).
"Minority Interests" shall mean any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required
by law) that are not owned by the Company and/or one or more of its
Restricted Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary or
involuntary liquidating value of such preferred stock, whichever is greater,
and by valuing Minority Interests constituting common stock at the book
value of capital and surplus applicable thereto adjusted, if necessary, to
reflect any changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Income Available for Fixed Charges" for any period shall mean
the sum of (i) Consolidated Net Income during such period plus (to the
extent deducted in determining Consolidated Net Income), (ii) all provisions
for any Federal, state or other income taxes made by the Company and its
Restricted Subsidiaries during such period and (iii) Fixed Charges of the
Company and its Restricted Subsidiaries during such period.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability.
"Purchaser" shall have the meaning set forth in [SECTION]1.1.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee
is obligated to make to the lessor on termination of the lease or surrender
of the property) payable by the Company or a Restricted Subsidiary, as
lessee or sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a Restricted
Subsidiary (whether or not designated as rents or additional rents) on
account of maintenance, repairs, insurance, taxes and similar charges.
Fixed rents under any so-called "percentage leases" shall be computed solely
on the basis of the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Investments" shall mean all Investments existing on or
made after the Closing Date other than:
(a) Investments of the Company and its Restricted Subsidiaries
in and to Restricted Subsidiaries. including any Investment in any
Person which, after giving effect to such Investment, will become a
Restricted Subsidiary;
(b) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by
the Company or any Restricted Subsidiary, is accorded the highest
rating by Standard & Poor's Ratings Group, ▇▇▇▇▇'▇ Investors Service,
Inc. or other nationally recognized credit rating agency of similar
standing;
(c) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith
and credit obligation of the United States of America, in either case,
maturing in twelve months or less from the date of acquisition
thereof;
(d) Investments in certificates of deposit maturing within one
year from the date of issuance thereof, issued by a bank or trust
company organized under the laws of the United States or any state
thereof, having capital, surplus and undivided profits aggregating at
least $100,000,000 and whose long-term certificates of deposit are, at
the time of acquisition thereof by the Company or a Restricted
Subsidiary, rated AA or better by Standard & Poor's Ratings Group or
Aa or better by ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) loans or advances in the usual and ordinary course of
business to officers, directors and employees for expenses (including
moving expenses related to a transfer) incidental to carrying on the
business of the Company or any Restricted Subsidiary;
(f) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted
Subsidiaries; and
(g) Investments in addition to those described in the foregoing
paragraphs (a) through (f) hereof, provided that the aggregate amount
of all Investments made pursuant to the provisions of this paragraph
(g) shall not exceed an amount equal to 5% of Common Shareholders'
Equity.
As used herein, "Common Shareholders' Equity" shall mean at any time
the sum of the common stock, surplus and retained earnings of the Company as
of the end of the most recent fiscal quarter as determined in accordance
with GAAP.
In valuing any Investments, such Investments shall be taken at the
original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation therein, but less any amount repaid or
recovered on account of capital or principal.
"Restricted Subsidiary" shall mean any Subsidiary (a) which is
organized under the laws of the United States or any State thereof; (b)
which conducts substantially all of its business and has substantially all
of its assets within the United States; (c) of which more than 80% (by
number of votes) of the Voting Stock is beneficially owned, directly or
indirectly, by the Company; and (d) which has been designated by the Board
of Directors of the Company as a Restricted Subsidiary in accordance with
[SECTION]5.16.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of votes) of
the Voting Stock shall be beneficially owned, directly or indirectly, by
such parent corporation. The term "Subsidiary" shall mean a subsidiary of
the Company.
"Tangible Assets" shall mean as of the date of any determination
thereof the total amount of all assets of the Company and its Restricted
Subsidiaries (less depreciation, depletion and other properly deductible
valuation reserves) after deducting good will, patents, trade names, trade
marks, copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, deferred assets other than prepaid
insurance and prepaid taxes, the excess of cost of shares acquired over book
value of related assets and such other assets as are properly classified as
"intangible assets" in accordance with GAAP.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not a
Restricted Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock
(except shares required as directors' qualifying shares) and all Funded Debt
and Current Debt shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required
to be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the
Notes (hereinafter called the "Note Register"), and the Company will
register or transfer or cause to be registered or transferred as hereinafter
provided any Note issued pursuant to this Agreement.
At any time and from time to time any Holder of a Note which has been
duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall
be deemed and treated as the owner and Holder thereof and a holder for all
purposes of this Agreement. Payment of or on account of the principal,
premium, if any, and interest on any registered Note shall be made to or
upon the written order of such Holder.
Section 9.2. Exchange of Notes. At any time and from time to time,
upon not less than ten days' notice to that effect given by the Holder of
any Note initially delivered or of any Note substituted therefor pursuant to
[SECTION]9.1, this [SECTION]9.2 or [SECTION]9.3, and, upon surrender of such
Note at its office, the Company will deliver in exchange therefor, without
expense to such Holder, except as set forth below, a Note for the same
aggregate principal amount as the then unpaid principal amount of the Note
so surrendered, or Notes in the denomination of $100,000 or any amount in
excess thereof as such Holder shall specify, dated as of the date to which
interest has been paid on the Note so surrendered or, if such surrender is
prior to the payment of any interest thereon, then dated as of the date of
issue, registered in the name of such Person or Persons as may be designated
by such Holder, and otherwise of the same form and tenor as the Notes so
surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will make and
deliver without expense to the Holder thereof, a new Note, of like tenor, in
lieu of such lost, stolen, destroyed or mutilated Note. If an Institutional
Holder is the owner of any such lost, stolen or destroyed Note, then the
affidavit of an authorized officer of such owner, setting forth the fact of
loss, theft or destruction and of its ownership of such Note at the time of
such loss, theft or destruction shall be accepted as satisfactory evidence
thereof and no further indemnity shall be required as a condition to the
execution and delivery of a new Note other than the written agreement of
such owner to indemnify the Company.
Section 9.4. Conversion of Notes to First Mortgage Bonds. (a) The
Company may issue Additional First Mortgage Bonds provided that (i) the
Additional First Mortgage Bonds are issued in compliance with the following
provisions of this [SECTION]9.4, (ii) no Default or Event of Default shall
then exist and (iii) after giving effect thereto the Company shall be in
compliance with [SECTION]5.7(a).
(b) The Company may issue Additional First Mortgage Bonds provided
that concurrently with or prior to the issuance thereof the Company shall
convert all outstanding Notes by issuing First Mortgage Bonds to the Holders
of such Notes as herein provided. Not later than 60 days nor earlier than
30 days prior to the date of the issuance of any Additional First Mortgage
Bonds, the Company shall give written notice of such fact in the manner
provided in [SECTION]9.7 hereof to the Holders of the Notes which notice
shall (1) state the details of the proposed issuance of the Additional First
Mortgage Bonds and the effective date thereof (the "Effective Date"), (2)
state that pursuant to this [SECTION]9.4, the Company shall convert all
Notes to First Mortgage Bonds and (3) specify the date upon which the
conversion shall take place (the "Conversion Date"). On the Conversion
Date, the Company, as provided herein, shall convert to First Mortgage Bonds
all of the outstanding Notes.
(c) Any First Mortgage Bonds to be issued to the Holders of Notes
pursuant to the foregoing provisions (i) shall be issued in a separate
series of First Mortgage Bonds, (ii) shall be in a principal amount equal to
the aggregate unpaid principal amount of the Notes, (iii) shall bear
interest at the rate of 7.80% per annum from the date to which interest has
been paid on the Notes, (iv) shall be payable with respect to interest and
principal on the same respective payment dates of the Notes, (v) shall have
the same optional prepayment provisions and, to the extent permitted under
the First Mortgage Bond Indenture, the same events of default as such Notes
or, if not so permitted for any similar event of default, provisions which
result in a mandatory redemption upon the occurrence of such event, (vi)
shall, in the First Mortgage Bond Indenture, receive the benefit of terms
and provisions substantially the same as those contained in this Agreement,
including without limitation, the covenants of the Company contained in
[SECTION]5 (other than [SECTION]5.9) of this Agreement (allowing for
differences in form and with appropriate adjustments to reflect the changed
nature of the securities), and (vii) shall be issued pursuant to the First
Mortgage Bond Indenture in a manner satisfactory in form and substance to
such Holders and their counsel. The Holders of the Notes may be represented
by such special counsel as they shall select and the reasonable charges and
disbursements of such special counsel shall be paid by the Company.
(d) On or prior to the Conversion Date, and as a condition to the
effectiveness of such conversion, the supplemental indenture pursuant to
which such First Mortgage Bonds shall be issued shall be duly recorded, and
any necessary financing statements shall be duly filed in respect thereof,
to the extent required by law to perfect the lien of the First Mortgage Bond
Indenture on the mortgaged property thereunder, and the Company shall
deliver to the trustee under the First Mortgage Bond Indenture and to each
of the Holders of the outstanding Notes, an opinion of counsel (who shall be
satisfactory to each of such Holders) and such other evidence as such
Holders may request as to (A) the priority of the Lien created by the First
Mortgage Bond Indenture in favor of the First Mortgage Bonds issued to such
Holders, (B) the equal and ratable benefit and security provided by the
First Mortgage Bond Indenture to such First Mortgage Bonds in favor of such
Holders, (C) the due authorization, execution and delivery of such First
Mortgage Bonds and the legality, validity, binding effect and enforceability
thereof, (D) the due authentication and issuance thereof under the First
Mortgage Bond Indenture, (E) the absence of any default or event which with
the giving of notice or passage of time, or both, would constitute a default
or event of default under the First Mortgage Bond Indenture or any
Indebtedness secured thereby, (F) the due authorization, execution and
delivery of the First Mortgage Bond Indenture and the legality, validity,
binding effect and enforceability thereof, (G) the approval of such First
Mortgage Bonds and such supplemental indenture by any necessary governmental
agencies, and (H) the good title of the Company to its real properties
(which opinion with respect to such title may be based upon an examination
of title insurance policies and/or endorsements thereto, abstracts or
certificates of title or similar documents) and as to such other matters as
such Holders may request. Upon completion of the conversion of the Notes
into First Mortgage Bonds pursuant to the foregoing provisions of this
[SECTION]9.4, this Agreement shall terminate except for any obligations of
the Company arising under this Agreement prior to such termination which
have not been satisfied.
Section 9.5. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to
pay directly all of the Purchaser's reasonable out-of-pocket expenses in
connection with the preparation, execution and delivery of this Agreement
and the transactions contemplated hereby, including but not limited to the
reasonable charges and disbursements of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel
to the Purchaser, duplicating and printing costs and charges for shipping
the Notes, adequately insured to the Purchaser's home office or at such
other place as such Purchaser may designate, and all such expenses of the
Holders relating to any amendment, waivers or consents pursuant to the
provisions hereof, including, without limitation, any amendments, waivers,
or consents resulting from any work-out, renegotiation or restructuring
relating to the performance by the Company of its obligations under this
Agreement and the Notes. The Company also agrees that it will pay and save
the Purchaser harmless against any and all liability with respect to stamp
and other taxes, if any, which may be payable or which may be determined to
be payable in connection with the execution and delivery of this Agreement
or the Notes, whether or not any Notes are then outstanding. The Company
agrees to protect and indemnify the Purchaser against any liability for any
and all brokerage fees and commissions payable or claimed to be payable to
any Person in connection with the transactions contemplated by this
Agreement. The Purchaser represents that no placement agent, broker or
finder has been retained or engaged by the Purchaser in connection with its
purchase of the Notes.
Section 9.6. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of any Holder in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of each
Holder are cumulative to, and are not exclusive of, any rights or remedies
any such Holder would otherwise have.
Section 9.7. Notices. All communications provided for hereunder
shall be in writing and, if to a Holder, delivered or mailed prepaid by
registered or certified mail or overnight air courier, or by facsimile
communication, in each case addressed to such Holder at its address
appearing on Schedule I to this Agreement or such other address as any
Holder may designate to the Company in writing, and if to the Company,
delivered or mailed by registered or certified mail or overnight air
courier, or by facsimile communication, to the Company at the address
beneath its signature at the foot of this Agreement or to such other address
as the Company may in writing designate to the Holders; provided, however,
that a notice to a Holder by overnight air courier shall only be effective
if delivered to such Holder at a street address designated for such purpose
in accordance with this [SECTION]9.7, and a notice to such Holder by
facsimile communication shall only be effective if made by confirmed
transmission to such Holder at a telephone number designated for such
purpose in accordance with this [SECTION]9.7 and promptly followed by the
delivery of such notice by registered or certified mail or overnight air
courier, as set forth above.
Section 9.8. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to the
benefit of the Purchaser and its successor and assigns, including each
successive Holder.
Section 9.9. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and in
any certificates delivered pursuant hereto, whether or not in connection
with the Closing Date, shall survive the closing and the delivery of this
Agreement and the Notes.
Section 9.10. Severability. Should any part of this Agreement for
any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement had
been executed with the invalid or unenforceable portion thereof eliminated
and it is hereby declared the intention of the parties hereto that they
would have executed the remaining portion of this Agreement without
including therein any such part, parts or portion which may, for any reason,
be hereafter declared invalid or unenforceable.
Section 9.11. Governing Law. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
Section 9.12. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract between the
Company and you for the uses and purposes hereinabove set forth. This
Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.
THE BERKSHIRE GAS COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Its President
THE BERKSHIRE GAS COMPANY
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
Accepted as of November 1, 1996:
FIRST COLONY LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Its Associate Vice President
SCHEDULE I
(to Note Agreement)
PRINCIPAL AMOUNTS
NAME OF PURCHASER OF NOTES TO BE
PURCHASED
FIRST COLONY LIFE INSURANCE COMPANY $16,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"The Berkshire Gas Company, 7.80% Senior Notes due November 15, 2021, PPN
084653 D@ 0 principal, premium or interest") to:
Crestar Bank (ABA #0510-0002-0)
Richmond, Virginia
Credit - 2111
Attention: Incoming Processing Unit Number 27955
for credit to: First Colony Life Insurance Company
Account Number ▇▇▇▇▇▇▇▇
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
SCHEDULE II
(to Note Agreement)
LIENS SECURING DEBT
(INCLUDING CAPITALIZED LEASES)
AS OF THE CLOSING DATE
The Lien of the First Mortgage Bond Indenture.
EXHIBIT A
(to Note Agreement)
THE BERKSHIRE GAS COMPANY
7.80% Senior Note
Due November 15, 2021
PPN: 084653 D@ 0
No. __________________, 19____
$
The Berkshire Gas Company, a Massachusetts corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of November, 2021
the principal amount of
DOLLARS ($_______________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 7.80% per annum from the date hereof until maturity,
payable quarterly on the fifteenth day of each February, May, August and
November in each year (commencing on the first of such dates after the date
hereof) and at maturity. The Company agrees to pay interest on overdue
principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on
any overdue installment of interest, at the rate of 8.80% per annum after
the due date, whether by acceleration or otherwise, until paid. Both the
principal hereof and interest hereon are payable at the principal office of
the Company in Pittsfield, Massachusetts in coin or currency of the United
States of America which at the time of payment shall be legal tender for the
payment of public and private debts.
This Note is one of the 7.80% Senior Notes due November 15, 2021 (the
"Notes") of the Company in the aggregate principal amount of $16,000,000
issued or to be issued under and pursuant to the terms and provisions of the
Note Agreement dated as of November 1, 1996 (the "Note Agreement"), entered
into by the Company with the original Purchaser therein referred to, and
this Note and the holder hereof are entitled equally and ratably with the
holders of all other Notes outstanding under the Note Agreement to all the
benefits provided for thereby or referred to therein. Reference is hereby
made to the Note Agreement for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreement may be
declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreement.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, premium, if
any, and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
THE BERKSHIRE GAS COMPANY
By
--------------------------------
Its
EXHIBIT B
(to Note Agreement)
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Purchaser as follows:
1. Subsidiaries. The Company has no Subsidiaries.
2. Corporate Organization and Authority. The Company
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all material
licenses and permits to own and operate its properties and to carry on
its business as now conducted and as presently proposed to be
conducted; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or
leased by it makes such licensing or qualification necessary.
3. Financial Statements. (a) The balance sheets of the Company as of
June 30 in each of the years 1992 to 1996, both inclusive, and the
statements of income and retained earnings and changes in financial position
or cash flows for the fiscal years ended on said dates, each accompanied by
a report thereon containing an opinion unqualified as to scope limitations
imposed by the Company and otherwise without qualification except as therein
noted, by Deloitte & Touche LLP, have been prepared in accordance with GAAP
consistently applied except as therein noted, are correct and complete and
present fairly the financial position of the Company as of such dates and
the results of its operations and changes in its financial position or cash
flows for such periods.
(b) Since June 30, 1996, there has been no change in the condition,
financial or otherwise, of the Company as shown on the balance sheet as of
such date except changes in the ordinary course of business, none of which
individually or in the aggregate has been materially adverse.
4. Indebtedness. Annex A attached hereto correctly describes all
Current Debt and Funded Debt of the Company outstanding on the Closing Date.
5. Full Disclosure. Neither the financial statements referred to in
paragraph 4 hereof nor any other written statement furnished by the Company
to the Purchaser in connection with the negotiation of the sale of the
Notes, contains any untrue statement of a material fact or omits a material
fact necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Company which the Company has
not disclosed to the Purchaser in writing which materially affects adversely
nor, so far as the Company can now foresee, will materially affect adversely
the properties, business, prospects, profits or condition (financial or
otherwise) of the Company.
6. Pending Litigation. Except for the matters described in the
letter from the Company to the Purchaser dated November 1, 1996 (the
"Litigation Disclosure Letter"), there are no proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company in any
court or before any governmental authority or arbitration board or tribunal
which involve the possibility of materially and adversely affecting the
properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries.
7. Title to Properties. The Company has good and marketable title in
fee simple (or its equivalent under applicable law) to all material parcels
of real property and has good title to all the other material items of
property it purports to own, including that reflected in the most recent
balance sheet referred to in paragraph 3 hereof, except as sold or otherwise
disposed of in the ordinary course of business and except for Liens
permitted by the Agreement.
8. Patents and Trademarks. The Company owns or possesses all the
patents, trademarks, trade names, service marks, copyright, licenses and
rights with respect to the foregoing necessary for the present and planned
future conduct of its business, without any known conflict with the rights
of others.
9. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreement and
the Notes --
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company; and
(c) have been duly authorized by proper corporate action on the
part of the Company (no action by the stockholders of the Company
being required by law, by the Articles of Incorporation or By-laws of
the Company or otherwise), executed and delivered by the Company and
the Agreement and the Notes constitute the legal, valid and binding
obligations, contracts and agreements of the Company enforceable in
accordance with their respective terms.
10. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Funded Debt or Current Debt or is in default under any
instrument or instruments or agreements under and subject to which any
Funded Debt or Current Debt has been issued, and no event has occurred and
is continuing under the provisions of any such instrument or agreement which
with the lapse of time or the giving of notice, or both, would constitute an
event of default thereunder.
11. Governmental Consent. Except for the order of the Massachusetts
Department of Public Utilities approving the issuance and sale of the Notes,
which order has been obtained, is in full force and effect and is not
subject to any appeal, no approval, consent or withholding of objection on
the part of any regulatory body, state, Federal or local, is necessary in
connection with the execution and delivery by the Company of the Agreement
or the Notes or compliance by the Company with any of the provisions of the
Agreement or the Notes.
12. Taxes. All tax returns required to be filed by the Company in
any jurisdiction have, in fact, been filed, and all taxes, assessments, fees
and other governmental charges upon the Company or upon any of its
properties, income or franchises, which are shown to be due and payable in
such returns have been paid. For all taxable years ending on or before June
30, 1993, the Federal income tax liability of the Company has been satisfied
and either the period of limitations on assessment of additional Federal
income tax has expired or the Company has entered into an agreement with the
Internal Revenue Service closing conclusively the total tax liability for
the taxable year. The Company does not know of any proposed additional tax
assessment against it for which adequate provision has not been made on its
accounts, and no material controversy in respect of additional Federal or
state income taxes due since said date is pending or to the knowledge of the
Company threatened. The provisions for taxes on the books of the Company
are adequate for all open years, and for its current fiscal period.
13. Use of Proceeds. The net proceeds from the sale of the Notes
will be used to retire Company's short-term bank debt and the 8.40%
Preferred Stock. None of the transactions contemplated in the Agreement
(including, without limitation thereof, the use of proceeds from the
issuance of the Notes) will violate or result in a violation of Section 7 of
the Securities Exchange Act of 1934, as amended, or any regulation issued
pursuant thereto, including, without limitation, Regulations G, T and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.
Neither the Company nor any Subsidiary owns or intends to carry or purchase
any "margin stock" within the meaning of said Regulation G. None of the
proceeds from the sale of the Notes will be used to purchase, or refinance
any borrowing the proceeds of which were used to purchase, any "security"
within the meaning of the Securities Exchange Act of 1934, as amended.
14. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any
similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from or has otherwise approached or negotiated
or will approach or negotiate in respect of the Notes or any similar
Security with any Person other than the Purchaser. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered or will
offer the Notes or any similar Security or has solicited or will solicit an
offer to acquire the Notes or any similar Security from any Person so as to
bring the issuance and sale of the Notes within the provisions of Section 5
of the Securities Act of 1933, as amended.
15. ERISA. The consummation of the transactions provided for in the
Agreement and compliance by the Company with the provisions thereof and the
Notes issued thereunder will not involve any prohibited transaction within
the meaning of ERISA or Section 4975 of the Internal Revenue Code of 1986,
as amended. Each Plan complies in all material respects with all applicable
statutes and governmental rules and regulations, and (a) no Reportable Event
has occurred and is continuing with respect to any Plan, (b) neither the
Company nor any ERISA Affiliate has withdrawn from any Plan or Multiemployer
Plan or instituted steps to do so, and (c) no steps have been instituted to
terminate any Plan. No condition exists or event or transaction has
occurred in connection with any Plan which could result in the incurrence by
the Company or any ERISA Affiliate of any material liability, fine or
penalty. No Plan maintained by the Company or any ERISA Affiliate, nor any
trust created thereunder, has incurred any "accumulated funding deficiency"
as defined in Section 302 of ERISA nor does the present value of all
benefits vested under all Plans exceed, as of the last annual valuation
date, the value of the assets of the Plans allocable to such vested
benefits. Neither the Company nor any ERISA Affiliate has any contingent
liability with respect to any post-retirement "welfare benefit plan" (as
such term is defined in ERISA) except as has been disclosed to the
Purchaser.
16. Compliance with Law. The Company (a) is not in violation of any
law, ordinance, franchise, governmental rule or regulation to which it is
subject or (b) has not failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of its property
or to the conduct of its business, which violation or failure to obtain
would materially adversely affect the business, prospects, profits,
properties or condition (financial or otherwise) of the Company, or impair
the ability of the Company to perform its obligations contained in the
Agreement or the Notes. The Company is not in default with respect to any
order of any court or governmental authority or arbitration board or
tribunal.
17. Compliance with Environmental Laws. Except for matters described
in the Litigation Disclosure Letter, the Company is not in violation of any
applicable Federal, state, or local laws, statutes, rules, regulations or
ordinances relating to public health, safety or the environment which
violation could have a material adverse effect on the business, prospects,
profits, properties or condition (financial or otherwise) of the Company.
The Company does not know of any liability or class of liability of the
Company or any Subsidiary under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601
et seq.), or the Resource Conservation and Recovery Act of 1976, as amended
(42 U.S.C. Section 6901 et seq.).
18. Holding Company Act Status. The Company is not a "registered
holding company" or a "subsidiary company" of a "registered holding company"
or an "affiliate" of a "registered holding company" or a "subsidiary
company" of a "registered holding company," as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
ANNEX A
(to Exhibit B)
DESCRIPTION OF DEBT
1. Current Debt of the Company outstanding on the Closing Date is as
follows:
CREDITOR AMOUNT
Fleet Bank $ 6,800,000
State Street Bank 5,000,000
Bank of Boston 1,500,000
Core States Bank 2,000,000
Bay Bank 4,000,000
-----------
Total $19,000,000
2. Funded Debt (other than Capitalized Rentals) of the Company outstanding
on the Closing Date is as follows:
$10,000,000 Series P First Mortgage Bonds 10.06% due 2019,
$6,000,000 Senior Note 9.6% due 2020, and
$6,000,000 Medium Term Note (Variable Interest) due April, 1999.
3. Capitalized Leases of the Company outstanding on the Closing Date are as
follows:
None.
EXHIBIT C
(to Note Agreement)
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the
Purchaser, called for by [SECTION]4.1 of the Note Agreement, shall be dated
the Closing Date and addressed to the Purchaser, shall be satisfactory in
form and substance to the Purchaser and shall be to the effect that:
1. The Company is a corporation, duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and has
the corporate power and the corporate authority to execute and deliver
the Note Agreement and to issue the Notes.
2. The Note Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed
and delivered by the Company and constitutes the legal, valid and
binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and the Notes being
delivered on the date hereof have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall also state that the opinion of
▇▇▇▇, May, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. is satisfactory in scope and form to
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ and that, in their opinion, the Purchaser is justified in
relying thereon.
It is understood that in giving the above opinion, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
may rely upon the opinion of ▇▇▇▇, May, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. as to all
matters relating to the laws of the Commonwealth of Massachusetts.
In rendering the opinion set forth in paragraph 1 above, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a certificate
of good standing of the Company from, the Secretary of State of the
Commonwealth of Massachusetts, the By-laws of the Company and the general
business corporation law of the Commonwealth of Massachusetts. The opinion
of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ is limited to the general business corporation law of
the Commonwealth of Massachusetts and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ may rely on appropriate certificates of public officials
and officers of the Company and upon representations of the Company and the
Purchaser delivered in connection with the issuance and sale of the Notes.
EXHIBIT D
(to Note Agreement)
DESCRIPTION OF CLOSING OPINION
OF COUNSEL TO THE COMPANY
The closing opinion of ▇▇▇▇, May, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., counsel
for the Company, which is called for by [SECTION]4.1 of the Note Agreement,
shall be dated the Closing Date and addressed to the Purchaser, shall be
satisfactory in scope and form to the Purchaser and shall be to the effect
that:
1. The Company is a corporation, duly organized and validly
existing under the laws of the Commonwealth of Massachusetts, has the
corporate power and the corporate authority to execute and perform the
Note Agreement and to issue the Notes and has the full corporate power
and the corporate authority to conduct the activities in which it is
now engaged and is duly licensed or qualified and is in good standing
as a foreign corporation in each jurisdiction in which the character
of the properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary.
2. The Note Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed
and delivered by the Company and constitutes the legal, valid and
binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
and similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The issue and sale of the Notes have, to the extent required
by law, been duly authorized by an order issued by the Massachusetts
Department of Public Utilities, which authorization is final and not
subject to any appeal which could affect the validity or terms of the
Notes and no other approval, consent or authorization on the part of,
or filing, registration or qualification with, any governmental body,
Federal or state, is necessary in connection with the execution and
delivery of the Note Agreement or the Notes.
5. The Company is not a "registered holding company" or a
"subsidiary company" of a "registered holding company" or an
"affiliate" of a "registered holding company" or a "subsidiary
company" of a "registered holding company," as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Agreement do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any Lien upon any of the property of the Company pursuant to the
provisions of the Articles of Incorporation or By-laws of the Company
or any agreement or other instrument known to such counsel to which
the Company is a party or by which the Company may be bound.
7. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of ▇▇▇▇, ▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., shall cover such
other matters relating to the sale of the Notes as the Purchaser may
reasonably request. With respect to matters of fact on which such opinion
is based, such counsel shall be entitled to rely on appropriate certificates
of public officials and officers of the Company.