BANGOR HYDRO-ELECTRIC COMPANY
FORM 10-K
EXHIBIT 4(d)
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EXECUTION COPY
AMENDED AND RESTATED SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of June 6, 1997, as amended and
restated as of November 20, 1997, made by BANGOR HYDRO-ELECTRIC COMPANY (the
"COMPANY"), in favor of THE CHASE MANHATTAN BANK, as Administrative Agent (in
such capacity, the "ADMINISTRATIVE AGENT") for the banks and other financial
institutions (the "BANKS") from time to time parties to the Credit Agreement,
dated as of June 30, 1995 (as amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), among the Company, the Banks and
the Administrative Agent.
W I T N E S S E T H:
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WHEREAS, pursuant to the Third Amendment, dated as of November 20,
1997 (the "THIRD AMENDMENT"), to the Credit Agreement, the Banks have agreed
to amend the Credit Agreement upon the terms and subject to the conditions
set forth in the Third Amendment;
WHEREAS, the Company previously entered into a Security Agreement
dated as of June 6, 1997 (the "EXISTING SECURITY AGREEMENT"); and
WHEREAS, it is a condition precedent to the effectiveness of the
Third Amendment that the Company shall have agreed to amend and restate the
Existing Security Agreement pursuant to this Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Banks to enter into the Third Amendment, the
Company hereby agrees that the Existing Security Agreement shall be amended
and restated in its entirety as follows:
SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms which are defined in
the Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Chattel Paper and Instruments.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"COLLATERAL": as defined in Section 2.
"COLLATERAL ACCOUNT": any collateral account established by the
Administrative Agent as provided in Section 5.
"CONTRACT": the UNITIL Contract, as the same may be amended,
supplemented or otherwise modified from time to time, including, without
limitation, (i) all rights of the Company to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights
of the Company to damages arising thereunder and (iii) all rights of the
Company to perform and to exercise all remedies thereunder.
"INDENTURE": the Mortgage and Deed of Trust, dated as of July 1,
1936, made by the Company in favor of the Trustee named therein, as the
same may be amended, supplemented or otherwise modified from time to
time.
"INDENTURE LIEN": any Lien created under the Indenture in respect
of the Collateral.
"NEW YORK UCC": the Uniform Commercial Code as from time to time
in effect in the State of New York.
"OBLIGATIONS": the collective reference to the unpaid principal of
and interest on the Loans and Reimbursement Obligations and all other
obligations and liabilities of the Company (including, without
limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and Reimbursement
Obligations and interest accruing at the then applicable rate provided
in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether or not a claim for post-
filing or post-petition interest is allowed in such proceeding) to the
Administrative Agent or any Bank, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents or any Letter
of Credit or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Banks that are required to
be paid by the Company pursuant to the terms of any of the foregoing
agreements).
"PLEDGED STOCK": all outstanding shares of Capital Stock of the
UNITIL SPC.
"PROCEEDS": all "proceeds" as such term is defined in Section 9-
306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, shall include, without limitation,
all dividends or other income from the Pledged Stock, collections
thereon or distributions or payments with respect thereto.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof",
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. GRANT OF SECURITY INTEREST
The Company hereby grants to the Administrative Agent, for the
ratable benefit of the Banks, a security interest in the Contract, the PERC
Rebates, the Pledged Stock and all Proceeds thereof (collectively, the
"COLLATERAL"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Banks to enter into the
Third Amendment, the Company hereby represents and warrants to the
Administrative Agent and each Bank, on the date hereof and on the date of
creation of each additional item of Collateral, that:
3.1 TITLE; NO OTHER LIENS. Except for (a) the security interest
granted to the Administrative Agent for the ratable benefit of the Banks
pursuant to this Agreement, (b) in the case of the Contract, the Indenture
Lien (if any) and (c) in the case of the PERC Rebates, any Lien permitted by
Section 6.5(o) of the Credit Agreement, the Company owns each item of the
Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as
have been filed (i) in favor of the Administrative Agent, for the ratable
benefit of the Banks, pursuant to this Agreement, (ii) in the case of the
Contract, in connection with the Indenture Lien (if any) or (iii) in the case
of the PERC Rebates, any Lien permitted by Section 6.5(o) of the Credit
Agreement.
3.2 PERFECTED LIENS. The security interests granted pursuant to
this Agreement, upon completion of the filings and other actions specified on
SCHEDULE 1 (which, in the case of all filings and other documents referred to
on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form), will constitute valid perfected security
interests (subject only to (a) in the case of the Contract, the Indenture
Lien (if any) and (b) in the case of the PERC Rebates, any Lien permitted by
Section 6.5(o) of the Credit Agreement) in all of the Collateral in favor of
the Administrative Agent, for the ratable benefit of the Banks, as collateral
security for the Obligations, enforceable in accordance with the terms hereof
against all creditors of the Company and any Persons purporting to purchase
any Collateral from the Company. Except as specified above in this
paragraph, no approval, consent or authorization of or filing with any
governmental or public regulatory body or authority is required in connection
with the execution, delivery and performance of this Agreement.
3.3 CHIEF EXECUTIVE OFFICE. The Company's jurisdiction of
organization is the State of Maine and the location of the Company's chief
executive office or sole place of business is 33 State Street, Bangor, Maine
04401.
3.4 CONSENTS, ETC. (a) No consent of any party (other than the
Company) to the Contract, the PERC Contract, or of any participant in the
PERC Contract Restructuring or the UNITIL Monetization, is required, or
purports to be required, in connection with the execution, delivery and
performance of this Agreement.
(b) The Contract is in full force and effect and constitutes a
valid and legally enforceable obligation of the parties thereto, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act by or
in respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of the Contract
by any party thereto other than those which have been duly obtained, made or
performed, are in full force and effect and do not subject the scope of any
the Contract to any material adverse limitation, either specific or general
in nature.
(d) Neither the Company nor (to the best of the Company's
knowledge) any other party to the Contract is in default in the performance
or observance of any of the terms thereof.
(e) The right, title and interest of the Company in, to and under
the Contract are not subject to any defenses, offsets, counterclaims or
claims.
(f) The Company has delivered to the Administrative Agent a
complete and correct copy of the Contract, including all amendments,
supplements and other modifications thereto.
(g) No amount payable to the Company under or in connection with
the Contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Administrative Agent.
(h) None of the parties to the Contract is a Governmental
Authority.
3.5 CORPORATE AND OTHER MATTERS. (a) The execution, delivery and
performance by the Company of this Agreement are within the Company's
corporate powers, have been duly authorized by all necessary corporate action
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of organization, as
amended, or by-laws of the Company or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Company or result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries (except as expressly contemplated hereby).
(b) This Agreement constitutes a valid and binding obligation of
the Company, enforceable in accordance with its terms.
(c) There is no action, suit, proceeding or investigation pending,
or to the knowledge of the Company threatened, against or affecting the
Company or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which in any manner questions the
validity of this Agreement.
SECTION 4. COVENANTS
The Company covenants and agrees with the Administrative Agent and
the Banks that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
4.1 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel
Paper shall be immediately delivered to the Administrative Agent, duly
indorsed in a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement.
4.2 PAYMENT OF OBLIGATIONS. The Company will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind against or with respect to the Collateral,
except that no such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings, reserves
in conformity with GAAP with respect thereto have been provided on the books
of the Company and such proceedings could not reasonably be expected to
result in the sale, forfeiture or loss of any of the Collateral or any
interest therein.
4.3 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION. (a) The Company shall maintain the security interest created
by this Agreement as a perfected security interest, subject only to the
Indenture Lien (if any), or, in the case of the PERC Rebates, any Lien
permitted by Section 6.5(o) of the Credit Agreement, and shall defend such
security interest against the claims and demands, other than those relating
to the Indenture Lien (if any), or, in the case of the PERC Rebates, any Lien
permitted by Section 6.5(o) of the Credit Agreement, of all Persons
whomsoever.
(b) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the Company, the Company
will promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in
effect in any jurisdiction with respect to the security interests created
hereby.
4.4 CHANGES IN LOCATIONS, NAME, ETC. The Company will not, except
upon 15 days' prior written notice to the Administrative Agent and delivery
to the Administrative Agent of all additional executed financing statements
and other documents reasonably requested by the Administrative Agent to
maintain the validity, perfection and priority of the security interests
provided for herein:
(i) change the location of its chief executive office or sole place
of business from that referred to in Section 3.3; or
(ii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
4.5 CONTRACT. (a) The Company will perform and comply in all
material respects with all its obligations under the Contract.
(b) The Company will not amend, modify, terminate or waive any
provision of the Contract.
(c) The Company will exercise promptly and diligently each and
every material right which it may have under the Contract (other than any
right of termination).
(d) The Company will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it relating in any way
to the Contract that questions the validity or enforceability of the
Contract.
4.6 PLEDGED STOCK. (a) If the Company shall become entitled to
receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution
in connection with any reclassification, increase or reduction of capital or
any certificate issued in connection with any reorganization), option or
rights in respect of the Capital Stock of the UNITIL SPC, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any shares of
the Pledged Stock, or otherwise in respect thereof, the Company shall accept
the same as the agent of the Administrative Agent and the Lenders, hold the
same in trust for the Administrative Agent and the Lenders and deliver the
same forthwith to the Administrative Agent in the exact form received, duly
indorsed by the Company to the Administrative Agent, if required, together
with an undated stock power covering such certificate duly executed in blank
by the Company and with, if the Administrative Agent so requests, signature
guaranteed, to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Stock upon the liquidation or dissolution
of the UNITIL SPC shall be paid over to the Administrative Agent to be held
by it hereunder as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the
Pledged Stock or any property shall be distributed upon or with respect to
the Pledged Stock pursuant to the recapitalization or reclassification of the
capital of the UNITIL SPC or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected
security interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Stock shall be received by the Company,
the Company shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the Lenders,
segregated from other funds of the Company, as additional collateral security
for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
the Company will not (i) vote to enable, or take any other action to permit,
the UNITIL SPC to issue any stock or other equity securities of any nature or
to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature
of the UNITIL SPC, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Pledged Stock or
Proceeds thereof (except pursuant to a transaction expressly permitted by the
Credit Agreement), (iii) create, incur or permit to exist any Lien or option
in favor of, or any claim of any Person with respect to, any of the Pledged
Stock or Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of the Company or the
Administrative Agent to sell, assign or transfer any of the Pledged Stock or
Proceeds thereof.
SECTION 5. REMEDIAL PROVISIONS
5.1 COMMUNICATIONS WITH OBLIGORS; COMPANY REMAIN LIABLE. (a)
The Administrative Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with parties to the Contract to verify with them to the
Administrative Agent's satisfaction the terms of the Contract.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, the Company
shall notify the parties to the Contract that the Contract has been assigned
to the Administrative Agent for the ratable benefit of the Banks and that
payments in respect thereof shall be made directly to the Administrative
Agent.
(c) Anything herein to the contrary notwithstanding, the Company
shall remain liable under the Contract to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise thereto. Neither
the Administrative Agent nor any Bank shall have any obligation or liability
under or in respect of the Contract or the other Collateral by reason of or
arising out of this Agreement or the receipt by the Administrative Agent or
any Bank of any payment relating thereto, nor shall the Administrative Agent
or any Bank be obligated in any manner to perform any of the obligations of
the Company under or in respect of the Contract or the other Collateral, to
make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
5.2 PLEDGED STOCK. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given
notice to the Company of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 5.2(b), the Company shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock
and to exercise all voting and corporate rights with respect to the Pledged
Stock; PROVIDED, HOWEVER, that no vote shall be cast or corporate right
exercised or other action taken which, in the Administrative Agent's
reasonable judgment, would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights
to the Company, (i) the Administrative Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Stock and make application thereof to the Obligations in such order
as the Administrative Agent may determine, and (ii) any or all of the Pledged
Stock shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise
(x) all voting, corporate and other rights pertaining to such Pledged Stock
at any meeting of shareholders of the UNITIL SPC or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange
at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change
in the corporate structure of the UNITIL SPC, or upon the exercise by the
Company or the Administrative Agent of any right, privilege or option
pertaining to such Pledged Stock, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Stock with any committee,
depositary, transfer agent, registrar or other designated agency upon such
terms and conditions as the Administrative Agent may determine), all without
liability except to account for property actually received by it, but the
Administrative Agent shall have no duty to the Company to exercise any such
right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.
(c) The Company hereby authorizes and instructs the UNITIL SPC to
(i) comply with any instruction received by it from the Administrative Agent
in writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from the Company, and
the Company agrees that the UNITIL SPC shall be fully protected in so
complying, and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged Stock directly to the
Administrative Agent.
5.3 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT. If an
Event of Default shall occur and be continuing, if requested by the
Administrative Agent, all Proceeds received by the Company consisting of
cash, checks and other near-cash items shall be held by the Company in trust
for the Administrative Agent and the Banks, segregated from other funds of
the Company, and shall, forthwith upon receipt by the Company, be turned over
to the Administrative Agent in the exact form received by the Company (duly
indorsed by the Company to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole
dominion and control. All Proceeds while held by the Administrative Agent in
a Collateral Account (or by the Company in trust for the Administrative Agent
and the Banks) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as
provided in Section 5.3.
5.4 APPLICATION OF PROCEEDS. If an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds held
in any Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time
by the Administrative Agent to the Company or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after
the Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to
the Company or to whomsoever may be lawfully entitled to receive the same.
5.5 CODE AND OTHER REMEDIES. If an Event of Default shall occur
and be continuing, the Administrative Agent, on behalf of the Banks, may
exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing
or relating to the Obligations, all rights and remedies of a secured party
under the New York UCC or any other applicable law. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Company or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, lease, assign, give option or
options to purchase, or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker's board
or office of the Administrative Agent or any Bank or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent or any Bank shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Company,
which right or equity is hereby waived and released. The Company further
agrees, at the Administrative Agent's request, to assemble the Collateral and
make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at the Company's
premises or elsewhere. The Administrative Agent shall apply the net proceeds
of any action taken by it pursuant to this Section 5.5, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith
or incidental to the care or safekeeping of any of the Collateral or in any
way relating to the Collateral or the rights of the Administrative Agent and
the Banks hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Administrative Agent may elect, and only
after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to the Company. To the extent
permitted by applicable law, the Company waives all claims, damages and
demands it may acquire against the Administrative Agent or any Bank arising
out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
5.6 WAIVER; DEFICIENCY. The Company waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of
the New York UCC. The Company shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the fees and disbursements of any attorneys
employed by the Administrative Agent or any Bank to collect such deficiency.
SECTION 6. THE ADMINISTRATIVE AGENT
6.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC.
(a) The Company hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Company and in the name of
the Company or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, the Company hereby gives the Administrative
Agent the power and right, on behalf of the Company, without notice to or
assent by the Company, to do any or all of the following:
(i) in the name of the Company or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under the
Contract or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose
of collecting any and all such moneys due under the Contract or with
respect to any other Collateral whenever payable;
(ii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral;
(iii) execute, in connection with any sale provided for in Section
5.5, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(iv) (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (B) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (C) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (E) defend any
suit, action or proceeding brought against the Company with respect to
any Collateral; (F) settle, compromise or adjust any such suit, action
or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; and (G)
generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent's option and the Company's
expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize
upon the Collateral and the Administrative Agent's and the Banks'
security interests therein and to effect the intent of this Agreement,
all as fully and effectively as the Company might do.
Anything in this Section 6.1(a) to the contrary notwithstanding,
the Administrative Agent agrees that it will not exercise any rights under
the power of attorney provided for in this Section 6.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If the Company fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 6.1, together
with interest thereon at a rate per annum equal to the rate per annum at
which interest would then be payable on past due Base Rate Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the Company, shall be payable by the Company to the
Administrative Agent on demand.
(d) The Company hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
6.2 DUTY OF ADMINISTRATIVE AGENT. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Bank nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall
be under any obligation to sell or otherwise dispose of any Collateral upon
the request of the Company or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Banks hereunder are solely to
protect the Administrative Agent's and the Banks' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Bank to
exercise any such powers. The Administrative Agent and the Banks shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Company for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
6.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402
of the New York UCC and any other applicable law, the Company authorizes the
Administrative Agent to file or record financing statements and other filing
or recording documents or instruments with respect to the Collateral without
the signature of the Company in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.
6.4 AUTHORITY OF ADMINISTRATIVE AGENT. The Company acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Banks, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Company, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Banks with full and valid authority so to act or refrain from acting, and
the Company shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
SECTION 7. MISCELLANEOUS
7.1 AMENDMENTS IN WRITING. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the Company, the Administrative
Agent and the Majority Banks.
7.2 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or the Company hereunder shall be effected in the manner
provided for in Section 9.1 of the Credit Agreement.
7.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither
the Administrative Agent nor any Bank shall by any act (except by a written
instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Bank, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Administrative Agent or any Bank of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Administrative Agent or such Bank would
otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
7.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. The Company agrees to
pay or reimburse each Bank and the Administrative Agent for all its costs and
expenses incurred in enforcing or preserving any rights under this Agreement,
including, without limitation, the fees and disbursements of counsel to each
Bank and of counsel to the Administrative Agent.
(a) The Company agrees to pay, and to save the Administrative
Agent and the Banks harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or
other taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
(b) The Company agrees to pay, and to save the Administrative
Agent and the Banks harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement.
(c) The agreements in this Section 7.4 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
7.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the successors and assigns of the Company and shall inure to the benefit of
the Administrative Agent and the Banks and their successors and assigns;
PROVIDED that the Company may not assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent
of the Administrative Agent.
7.6 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
7.7 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
7.8 SECTION HEADINGS. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
7.9 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
7.10 RELEASES. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and the Company
hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Company. At the request and sole expense of the Company
following any such termination, the Administrative Agent shall deliver to the
Company any Collateral held by the Administrative Agent hereunder, and
execute and deliver to the Company such documents as the Company shall
reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by the Company in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
the Company, shall execute and deliver to the Company all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral.
IN WITNESS WHEREOF, each of the undersigned has caused this
Security Agreement to be duly executed and delivered as of the date first
above written.
BANGOR HYDRO-ELECTRIC COMPANY
By: /s/ Frederick Samp
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Title: Vice President
SCHEDULE 1
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
UNIFORM COMMERCIAL CODE FILINGS
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Filing of a UCC-1 Financing Statement with the Secretary of State of Maine