PROMISSORY NOTE
$10,000,000 Bangor, Maine
June 29, 2001
FOR VALUE RECEIVED, on the Final Maturity Date (as defined herein)
BANGOR HYDRO-ELECTRIC COMPANY (the "Borrower") promises to pay to the order
of FLEET NATIONAL BANK (together with any successors or assigns, the "Bank"),
a national banking association with an office at 80 Exchange Street, Bangor,
Maine 04401 (such address or any other which may be specified by the Bank,
the "Lending Office"), the principal amount of TEN MILLION DOLLARS
($10,000,000), or such lesser amount of loans (the "Loans") advanced pursuant
to the Line Agreement (as defined below) and to pay interest on the unpaid
principal balance hereof from time to time outstanding, for the period
commencing on the date hereof, at the rates per annum as set forth herein on
the Final Maturity Date.
This Note is issued pursuant to a certain letter agreement (the "Line
Agreement") of even date herewith between the Borrower and the Bank.
1. CERTAIN DEFINED TERMS.
As used herein, (i) "Obligations" means all indebtedness, obligations
and liabilities of the Borrower under this Note, whether direct or indirect,
absolute or contingent, matured or unmatured, due or to become due, arising
by contract, operation of law or otherwise, whether now existing or hereafter
arising, (ii) "holder" means the payee or any endorsee of this Note who or
which is in possession of it, or the bearer hereof if this Note is at the
time payable to the bearer, (iii) "Obligor" means the undersigned, any
guarantor or other person primarily or secondarily liable hereunder or in
respect hereof, including any person or entity who has pledged or granted to
the Bank a security interest in, or other lien on, property on behalf of the
undersigned as collateral for the Obligations, and (iv) "Final Maturity Date"
shall mean October 1, 2001. Capitalized terms used herein and not otherwise
defined shall have the same meanings as defined in the Amended and Restated
Revolving Credit and Term Loan Agreement dated as of June 29, 1998 (as
amended and in effect from time to time, the "Credit Agreement"), by and
amount the Borrower, the Bank and the other lending institutions listed on
Schedule 1 to the Credit Agreement and the Bank as the administrative agent
and documentation agent for itself and such other lending institutions.
2. INTEREST.
Interest shall accrue and be payable as set forth in the Line Agreement.
3. PAYMENT TERMS.
3.1 PAYMENTS. The Borrower further promises to pay, on the Final
Maturity Date, an amount equal to the unpaid principal balance hereunder plus
all unpaid and accrued interest.
All payments hereunder shall be made by the undersigned to the Bank in
United States currency at the Bank's address specified above (or at such
other address as the Bank may specify), in immediately available funds, on or
before 2:00 p.m. (Bangor, Maine time) on the due date thereof. Payments
received by the Bank prior to the occurrence of an Event of Default (as
defined in Section 5 below) will be applied first to fees, expenses and other
amounts due hereunder (excluding principal and interest); second, to accrued
interest; and third to outstanding principal; after the occurrence of an
Event of Default, payments will be applied to the Obligations under this Note
and the Line Agreement as the Bank determines in its sole discretion. The
undersigned may from time to time pay all or a portion of any amount owed
hereunder earlier than it is due, without premium or other charge. The Bank
may, and the undersigned hereby authorizes the Bank to, debit the amount of
any payment not made by the time specified above to any demand deposit
account of the undersigned with the Bank. Principal amounts repaid hereunder
may be reborrowed prior to the Final Maturity Date in accordance herewith and
the Line Agreement.
The Bank is hereby irrevocably authorized by the undersigned to enter on
the schedule forming a part of this Note or otherwise in its records
appropriate notations evidencing the date and amount of the initial advance
hereunder and the date and amount of each payment of principal made with
respect thereto, and to attach to and make a part of this Note a continuation
of any such schedule as and when required. No failure on the part of the
Bank to make any such notation shall in any way affect any advance or the
rights or obligations of the Bank or any Obligor with respect thereto. The
entries on the records of the Bank (including any appearing on this Note and
any schedule attached hereto), shall be prima facie evidence of the aggregate
principal amount outstanding under this Note and interest accrued thereon.
3.2 DEFAULT RATE. To the extent permitted by applicable law, upon and
after the occurrence of an Event of Default (whether or not the Bank has
accelerated payment of this Note), interest on principal and overdue interest
shall, at the option of the Bank, be payable on demand at a rate per annum
equal to 4.0% above the Base Rate.
3.3 DEPOSIT ACCOUNT. At the request of the Bank, the undersigned shall
maintain with the Bank all of its deposits accounts, including a commercial
demand deposit account. The undersigned request and authorize the Bank to
debit such commercial demand deposit account for amounts due hereunder on any
date such amounts become due. The undersigned shall maintain sufficient
collected balances in this account to pay any such amounts as they become
due.
3.4 PREPAYMENTS. The Borrower may prepay a LIBOR Rate Loan only upon
three (3) Business Days prior written notice to the Bank (which notice shall
be irrevocable), or any such prepayment shall occur only on the last day of
the Interest Period for such LIBOR Rate Loan. The Borrower shall pay to the
Bank, upon request of the Bank, such amount or amounts as shall be sufficient
(in the reasonable opinion of the Bank) to compensate it for any loss, cost,
or expense incurred as a result of: (a) any payment of a LIBOR Rate Loan on
a date other than the last day of the Interest Period; (b) any failure by the
Borrower to borrow a LIBOR Rate Loan on the date specified by the Borrower'
written notice; and (c) any failure by the Borrower to pay a LIBOR Rate Loan
on the date for payment specified in the Borrower's written notice. Without
limiting the foregoing, the Borrower shall pay to the Bank a "yield
maintenance fee" in an amount computed as follows: the current rate for
United States Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closes to the term
chosen pursuant to the LIBOR Rate Election as to which the prepayment is
made, shall be subtracted from the LIBOR Rate in effect at the time of
prepayment. If the result is zero or a negative number, there shall be no
yield maintenance fee. If the result is a positive number, then the
resulting percentage shall be multiplied by the amount of the principal
balance being prepaid. The resulting amount shall be divided by 360 and
multiplied by the number of days remaining in the term chosen pursuant to the
LIBOR Rate Election as to which the prepayment is made. Said amount shall be
reduced to present value calculated by using the above-referenced United
States Treasury securities rate and the number of days remaining in the term
chosen pursuant to the LIBOR Rate Election as to which prepayment is made.
The resulting amount shall be the yield maintenance fee due to the Bank upon
the prepayment of a LIBOR Rate Loan. Each reference in this paragraph to
"LIBOR Rate Election" shall mean the election by the Borrower of the LIBOR
Rate. If by reason of an Event of Default, the Bank elects to declare the
Note to be immediately due and payable, then any yield maintenance fee with
respect to a LIBOR Rate Loan shall become due and payable in the same manner
as though the Borrower had exercised such right of prepayment.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Borrower makes the following representations and warranties, and
agrees to the following covenants, each of which representations, warranties
and covenants shall be continuing and in force so long as this Note is in
effect and any Obligations hereunder remain unpaid:
(a) The address of the Borrower set forth on the last page hereof
is the Borrower's chief executive office, and the Borrower will not
change its chief executive office without giving the Bank at least 30
days' prior written notice thereof.
(b) The Borrower is a duly organized and validly existing
corporation and is in corporate good standing under the laws of the
State of Maine, is properly licensed and has the corporate power and
authority and the legal right to own its property and conduct the
business in which it is engaged or presently proposes to engage and is
duly licensed and qualified as a foreign organization in good standing
under the laws of each jurisdiction where the failure to qualify as such
would have a material adverse effect.
(c) The Borrower has the corporate power and authority and the
legal right to make, deliver and perform this Note and the Line
Agreement. The Borrower has taken all necessary corporate action
(including, but not limited to, the obtaining of any consent of
stockholders required by law or by the Certificate of Incorporation or
by-laws) to authorize the execution, delivery and performance of this
Note and the Line Agreement and to authorize the transactions
contemplated hereby and thereby.
(d) Each of this Note and the Line Agreement, and each other
instrument and document executed by the Borrower and delivered to the
Bank pursuant to the terms hereof and thereof, constitutes the legal,
valid and binding obligation of the Borrower, enforceable in accordance
with its respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally, and
general principles of equity, and there are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened
against, or affecting, the Borrower or any of its officers or directors
calling into question the legality, validity or enforceability of any
thereof.
(e) The execution, delivery and performance of this Note do not
and will not (i) violate any applicable law, rule or regulation of any
governmental agency; (ii) contravene any provision of any agreement,
instrument, order or undertaking binding on the Borrower or by which any
of its properties are bound or affected; (iii) result in or require the
imposition of any mortgage, pledge, security interest, lien or other
charge or encumbrance of any kind or nature upon or with respect to any
of the properties of the Borrower; or (iv) require the consent or
approval of, or filing or registration with, any governmental or other
agency or authority, or any other party.
(f) The Borrower will use the proceeds of this Note solely to fund
short term working capital purposes of the Borrower.
(g) The Borrower will deliver to the Bank (i) the financial
statements referred to in Section 9.4(a) of the Credit Agreement within 120
days of the Borrower's fiscal year end, together with the compliance
certificate referred to in Section 9.4(c) of the Credit Agreement, (ii) the
financial statements referred to in Section 9. 4(b) of the Credit Agreement
within 45 days of the Borrower's fiscal quarter end, together with the
compliance certificate referred to in Section 9.4(c) of the Credit Agreement,
and (iii) such other financial statements and other information as the
Bank may request. All such information shall be true and correct and
shall fairly represent the financial condition of the Borrower as of the
date and for the periods for which the same are furnished. The Borrower
will notify the Bank promptly of the existence or upon the occurrence of
any Event of Default or event which, with the giving of notices or the
passage of time, or both would become an Event of Default.
(h) The Borrower hereby makes each of its representations and
warranties set forth in Section 8 of the Credit Agreement, and each of such
representations and warranties are hereby incorporated by reference
herein as if set forth fully herein. The Borrower shall at all times
comply with each of its covenants and agreements set forth in Sections 9, 10
and 11 of the Credit Agreement, and each of such covenants are hereby
incorporated by reference herein as if set forth fully herein.
5. DEFAULTS AND REMEDIES.
5.1 DEFAULT. The occurrence of any of the following events or conditions
shall constitute an "Event of Default" hereunder:
(a) the Borrower shall fail to pay when due and payable any
principal hereunder when the same becomes due;
(b) the Borrower shall fail to pay interest or fees hereunder when
due;
(c) the Borrower shall fail to perform any term, covenant or
agreement contained in this Note or the Line Agreement;
(d) any representation or warranty of the Borrower in this Note or
the Line Agreement (whether by reference or otherwise) or in any
certificate or notice given in connection therewith shall have been
false or misleading in any material respect at the time made or deemed
to have been made;
(e) the Credit Agreement is terminated; or
(f) an "Event of Default" as defined in the Credit Agreement (or
in any substantially similar provision of any restatement thereof) shall
have occurred and be continuing.
5.2 REMEDIES. Upon an Event of Default described in Sections 14.1(g) or
(h) of the Credit Agreement (or in any substantially similar provision of any
restatement thereof), immediately and automatically, and upon or after the
occurrence of any other Event of Default at the option of the Bank, all
Obligations of the undersigned shall become immediately due and payable
without notice or demand. All rights and remedies of the Bank are cumulative
and are exclusive of any rights or remedies provided by law or in equity or
any other agreement, and may be exercised separately or concurrently.
5.3 TERMINATION OF COMMITMENT. Upon an Event of Default described in
Sect. 14.1(g) or (h) of the Credit Agreement (or in any substantially similar
provision of any restatement thereof), any unused portion of the credit
hereunder and the Line Agreement shall forthwith terminate and the Bank shall
be relieved of all further obligations to make Loans to the Borrower. If any
other Event of Default shall have occurred and be continuing, the Bank may,
by notice to the Borrower, terminate the unused portion of the credit
hereunder and the Line Agreement, and upon such notice being given such
unused portion of the credit hereunder shall terminate immediately and the
Bank shall be relieved of all further obligations to make Loans. No
termination of the credit hereunder shall relieve the Borrower or any other
Obligor of any of the Obligations.
6. MISCELLANEOUS.
6.1 WAIVER; AMENDMENT. No delay or omission on the part of the Bank or
any holder in exercising any right hereunder shall operate as a waiver of
such right or of any other right under this Note. No waiver of any right or
any amendment hereto shall be effective unless in writing and signed by the
Bank, nor shall a waiver on one occasion bar or waive the exercise of any
such right on any future occasion. Without limiting the generality of the
foregoing, the acceptance by the Bank of any late payment shall not be deemed
to be a waiver of the Event of Default arising as a consequence thereof.
Each Obligor, by execution hereof to which it is a party, waives presentment,
demand, notice, protest, and all other demands and notices in connection with
the delivery, acceptance, performance, default or enforcement of this Note or
of any collateral for the Obligations, and assents to any extensions or
postponements of the time of payment and to any other indulgences under this
Note or with respect to any such collateral, to any substitutions, exchanges
or releases of any such collateral, and to any additions or releases of any
other parties or persons primarily or secondarily liable hereunder, that from
time to time may be granted by the Bank in connection herewith.
6.2 SET-OFF. Regardless of the adequacy of any collateral or other means
of obtaining repayment of the Obligations, the Bank is hereby authorized at
any time and from time to time, without notice to the undersigned (any such
notice being expressly waived by the undersigned) and to the fullest extent
permitted by law, to set off and apply such deposits and other sums against
the Obligations of the undersigned, although such Obligations may be
contingent or unmatured.
6.3 INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Bank and its affiliates from and against any and all claims, actions and
suits whether groundless or otherwise, and from and against any and all
claims, liabilities, losses, damages and expenses of every nature and
character arising out of this Note or the Line Agreement or the transactions
contemplated hereby or thereby including, without limitation, (i) any actual
or proposed use by the Borrower of the proceeds of any of the Loans, (ii) the
Borrower entering into or performing this Note or the Line Agreement or (iii)
any and all transfer taxes, documentary taxes, assessments or charges made by
any governmental authority by reason of the execution, delivery, and
performance of this Note or the Line Agreement. In litigation, or the
preparation therefor, the Bank and its affiliates shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrower
agrees to pay promptly the reasonable fees and expenses of such counsel. If,
and to the extent that the obligations of the Borrower under this Sect. 6.3 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
6.4 EXPENSES. The undersigned will pay on demand all reasonable expenses
of the Bank and its affiliates in connection with the negotiation,
preparation, administration and interpretation of this Note, the default,
collection, waiver or amendment of the Obligations or in connection with the
Bank's exercise, preservation or enforcement of any of its rights, remedies
or options hereunder, including, without limitation, the reasonable fees of
outside legal counsel or the allocated costs of in-house legal counsel,
accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with any travel or other costs
relating to any appraisals or examinations conducted in connection with the
Obligations or any collateral therefor, and the amount of all such expenses
shall, until paid, bear interest at the rate applicable to principal
hereunder (including any default rate) and be an Obligation secured by any
such collateral.
6.5 BANK RECORDS; NOTICE. The entries on the records of the Bank
(including any appearing on this Note) shall be prima facie evidence of the
aggregate principal amount outstanding under this Note and interest accrued
thereon. Any communication to be made hereunder shall (i) be made in writing,
but unless otherwise stated, may be made by telex, facsimile transmission or
letter, and (ii) be made or delivered to the address of the party receiving
notice which is identified with its signature below or in the case of the
Bank, at its Lending Office (unless such party has, by five (5) days written
notice, specified another address), and shall be deemed made or delivered,
when dispatched, left at that address, or five (5) days after being marked,
postage prepaid, to such address.
6.6 INFORMATION. The undersigned shall provide to the Bank any
information relating to any Obligor or any collateral securing this Note as
the Bank may reasonably require. All such information shall be true and
correct in all material respects when taken as a whole and in the case of
financial information, shall, where applicable fairly represent the financial
condition and the operating results of such Obligor as of the date and for
the periods for which the same are furnished. The undersigned shall upon
reasonable notice permit representatives of the Bank to inspect its
properties and its books and records, and to make copies or abstracts thereof
during regular business hours. Each Obligor authorizes the Bank to release
and disclose to its affiliates, agents and contractors any financial
statements and other information relating to said Obligor provided to or
prepared by or for the Bank in connection with any Obligation. The
undersigned will notify the Bank promptly of the existence or upon the
occurrence of any Event of Default or event which, with the giving of notice
or the passage of time or both, would become an Event of Default.
6.7 GOVERNING LAW; CONSENT TO JURISDICTION. This Note is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without
regard to its conflicts of law rules. Each of the undersigned agrees that
any suit for the enforcement of this Note may be brought in the courts of
such state or any federal court sitting in such state and consents to the
non-exclusive jurisdiction of each such court and to service of process in
any such suit being made upon the undersigned by mail at the address
specified below. The undersigned hereby waive any objection that they may
now or hereafter have to the venue of any such suit or any such court or that
such suit was brought in an inconvenient court.
6.8 SEVERABILITY; AUTHORIZATION TO COMPLETE; PARAGRAPH HEADINGS. If any
provision of this Note shall be invalid, illegal or unenforceable, such
provisions shall be severable from the remainder of this Note and the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby. The Bank is hereby authorized,
without further notice, to fill in any blank spaces in this Note, and to date
this Note as of the date funds are first advanced hereunder. Paragraph
headings are for the convenience of reference only and are not a part of this
Note and shall not affect its interpretation.
6.9 JURY WAIVER. THE BANK (BY ITS ACCEPTANCE OF THIS NOTE) AND THE
UNDERSIGNED AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A)
SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER
ACTION BASED UPON, OR ARISING OUT OF, THIS NOTE, THE LINE AGREEMENT, ANY
RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS PARAGRAPH SHALL BE SUBJECT TO NO EXCEPTIONS. NONE OF THE
BANK NOR THE UNDERSIGNED HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
6.10 INTEREST RATE LIMITATION. All agreements between the undersigned,
any other Obligor and the Bank are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration or
otherwise, shall the amount paid or agreed to be paid to the Bank for use or
the forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law.
6.11 REPLACEMENT OF NOTE. Upon receipt of an affidavit of an officer of
the Bank as to the loss, theft, destruction or mutilation of the Note or any
other document delivered in connection with this Note which is not of public
record, and, in the case of any such loss, theft, destruction or mutilation,
upon cancellation of such Note or other document, the Borrower will issue, in
lieu thereof, a replacement note or other document in the same principal
amount thereof and otherwise of like tenor.
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed by its respective officers hereunto duly authorized as of the day
and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY
/s/ Frederick S. Samp
__________________________________
Address: _______________
_______________
_______________
SCHEDULE
$__________________ Note dated ________________, 2001 of BANGOR HYDRO-
ELECTRIC COMPANY payable to the order of FLEET NATIONAL BANK.
Date and
Amount of
Payment Notation
Received made by
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