FLEET Fleet Bank
FleetBoston Financial Mail Stop: ME DE 05205B
PO Box 1280
Two Portland Square
Portland, ME 04101-5006
207 874 5005 tel
207 874 5156 fax
June 29, 2001
Bangor Hydro-Electric Company
33 State Street
Bangor, Maine 04401
Re: WORKING CAPITAL FACILITY
Ladies and Gentlemen:
We are pleased to confirm that Fleet National Bank (the "Bank") has
agreed, subject to the terms and conditions set forth herein and in the Note
referred to below, to extend credit to Bangor Hydro-Electric Company (the
"Borrower") in the form of a working capital line of credit for revolving
credit loans (individually, a "Loan" and collectively, the "Loans") made
from time to time during the period specified below to fund short term
working capital purposes of the Borrower in an aggregate principal amount
not to exceed $10,000,000 (the "Line of Credit") outstanding at any time.
This Letter Agreement is referred to herein as the "Line Agreement". All
other capitalized terms used herein without definition shall have the
meanings ascribed thereto in the promissory note attached as Exhibit A
hereto (the "Note"). The Line of Credit will remain available for drawdown
from the date of this agreement (the "Closing Date") until the Final
Maturity Date (the "Availability Period") provided no Event of Default
hereunder or under the Note exists. In the event that (i) any Event of
Default under the Note has occurred and is continuing, and regardless of
whether the Obligations hereunder have been declared due and payable, the
Bank may terminate the aforementioned commitment to extend Loans and (ii)
any Event of Default described in Section 5.1(f) of the Note shall have
occurred and be continuing as a result of the occurrence and continuance of
an Event of Default under Sections 14.1(g) or 14.1(h) of the Credit
Agreement, the aforementioned commitment to extend Loans shall, by notice in
writing to the Borrower, terminate and all amounts outstanding shall become
due and payable automatically without any further notice from the Bank.
Section 1. REQUESTS FOR LOANS; CONDITIONS TO LENDING.
(a) The Borrower may request Loans under the Line of Credit by
notifying the Bank in writing or telephonically not later than 12:00 noon
(Bangor, Maine time) on the day such Loan is to be made (in the case of Base
Rate Loans) and 12:00 noon (Bangor, Maine time) on the third Business Day
before the day such Loan is to be made (in the case of LIBOR Rate Loans) of
the principal amount of such Loan (which in the case of LIBOR Rate Loans
shall be in a minimum amount of $500,000). Each such Loan request shall
specify (i) whether such Loan is requested as a Base Rate Loan or a LIBOR
Rate Loan, and (ii) if such requested Loan is a LIBOR Rate Loan, the
requested Interest Period for such Loan.
(b) The Borrower may repay Loans from time to time without penalty,
subject to the provisions of Section 3 hereof. The Bank, in its discretion,
may relend amounts repaid under the Line of Credit, subject to the terms and
conditions hereof. If the outstanding principal amount of the Loans under
the Line of Credit ever exceeds $10,000,000, the Borrower shall immediately
repay to the Bank the amount by which the principal amount of the Loans
exceeds $10,000,000.
(c) The obligations of the Bank to make any Loan, whether on or after
the date hereof, shall be subject to the satisfaction of the following
conditions precedent:
(i) Each of the representations and warranties of the Borrower
contained herein, in the Credit Agreement, in the Note or in any
document or instrument delivered pursuant to or in connection herewith
shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of such Loan, with the same
effect as if made at and as of that time (except to the extent that
such representations and warranties relate expressly to an earlier
date) and no Event of Default shall have occurred and be continuing.
(ii) No change shall have occurred in any law or regulations
thereunder or interpretations thereof that in the reasonable opinion of
the Bank would make it illegal for it to make such Loan.
(iii) The Bank shall have received all information and such
counterpart originals or certified or other copies of such documents
required to be delivered hereunder or under the Note and all such
documents shall be reasonably satisfactory in substance and in form to
the Bank.
(iv) The Bank shall have received a fee in an amount equal to
$25,000, for its own account.
Section 2. PAYMENTS AND INTEREST RATE.
Section 2.1. IN GENERAL.
(a) Except as otherwise provided in Section2.2 hereof, the unpaid
principal amount of Base Rate Loans outstanding from time to time shall
bear interest from the date each such Loan is made until repaid in full
at the annual rate equal to the Base Rate plus the Applicable Margin
then in effect. Interest on Base Rate Loans shall be payable on the
last Business Day of each month.
(b) Except as otherwise provided in Section2.2 hereof, the unpaid
principal amount of LIBOR Rate Loans outstanding from time to time
shall bear interest from the date each such Loan is made until repaid
in full at the annual rate equal to the LIBOR Rate for such Loan for
such Interest Period plus the Applicable Margin then in effect.
Interest on LIBOR Rate Loans shall be payable at the end of each
Interest Period.
(c) Interest on the Loans shall also be payable (i) at any time
upon written notice by the Bank to the Borrower and (ii) on the Final
Maturity Date.
Section 2.2. INTEREST ON OVERDUE AMOUNTS. Overdue principal and
(to the extent permitted by applicable law) interest on the Loans and
all other overdue amounts payable under this Agreement overdue by ten
(10) days or more shall bear interest at a rate per annum equal to five
percent (5.00%) above the applicable interest rate otherwise payable on
such Loans, set forth in Section 2.1 hereof, compounded daily and
payable upon demand to accrue from the date such payment is due until
the obligation of the Borrower with respect to the payment thereof
shall be discharged, whether before or after judgment.
Section 3. CERTAIN GENERAL PROVISIONS. The terms and provisions
contained in Sections 6.6, 6.7 and 6.10 of the Credit Agreement are hereby
incorporated herein mutatis mutandis, as fully as if set forth herein in
their entirety.
Section 4. BASIC DOCUMENTATION REQUIREMENTS. Concurrent with the
establishment of this Line of Credit and before the Bank shall have any
obligation to make any Loans, you must deliver to the Bank the following:
(i) this Line Agreement duly executed and delivered by the Borrower;
(ii) the Note duly executed and delivered by the Borrower;
(iii) an amendment to the Credit Agreement in form and substance
satisfactory to the Bank in which the lenders party to the Credit Agreement
approve of the Borrower's incurrence of debt pursuant to this Line
Agreement;
(iv) an opinion of counsel to the Borrower covering due authorization,
execution, and validity of this Agreement, the Note, and all other documents
and instruments executed in connection therewith, and such other matters
incident to the transactions contemplated by this Agreement and the Note as
the Bank may require;
(v) (A) a certificate, certified by a duly authorized officer of the
Borrower to be true and complete as of the date hereof, of (a) no changes
(other than those attached thereto) to its charter or other incorporation
documents since last delivered to the Bank, and (b) no changes to its by-
laws (other than those attached thereto) since last delivered to the Bank;
(vi) certified copies of the resolutions of the Board of Directors of
the Borrower, approving each of this Line Agreement, the Note and each of
the other instruments and documents to be executed by it and delivered to
the Bank pursuant to this Line Agreement and the Note, certified by an
officer of the Borrower, and certified copies of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect thereto;
(vii) a certificate of a duly authorized officer of the Borrower
certifying the names and true signatures of the officers of the Borrower
authorized to sign each document to which it is a signatory and which is to
be delivered by it hereunder or pursuant to any other document executed in
connection herewith to which it is a party; and
(viii) a corporate good standing certificate for the Borrower in the
jurisdiction of its organization and foreign qualifications in each other
jurisdiction in which the nature of its business or ownership or use of its
property requires such qualification.
Section 5. NOTICES. Except as otherwise expressly provided in this
Line Agreement or the Note, all notices and other communications made or
required to be given pursuant to this Line Agreement or the Note shall be
made as set forth in Section6.5 of the Note.
Section 6. MISCELLANEOUS. This Line Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of
Massachusetts. This Line Agreement may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed
and delivered shall be an original, but all of which shall constitute one
agreement. In proving this Line Agreement it shall not be necessary to
account for more than one such counterpart signed by the party to be
charged. This Line Agreement together with the related Note express the
entire understanding of the parties with respect to the transactions
contemplated hereby. If there is any conflict between this Line Agreement
and the terms of the Note, the terms of the Note shall prevail. Neither this
Line Agreement nor any term hereof may be changed, waived, terminated or
discharged except in a writing executed by the Bank and the Borrower, except
that, unless otherwise provided herein, upon the final payment and
satisfaction in full of all of the Obligations and the expiry of any
obligation of the Bank to extend credit hereunder, this Agreement shall
terminate.
If you agree with the foregoing, please execute and return the enclosed
copy of this Line Agreement whereupon it will become a binding contract
between you and the Bank as of the Closing Date.
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Sincerely,
FLEET NATIONAL BANK.
/s/ Neil Buitenhuys
By:__________________________
Title: Vice President
CONSENTED AND AGREED TO
as of June __, 2001:
BANGOR HYDRO-ELECTRIC COMPANY
By: /s/ Frederick S. Samp
Title: Vice President
Exhibits
Exhibit A Form of Note