Exhibit 4(ff)
SECOND AMENDMENT TO LOAN AGREEMENT
This SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as
of the 1st day of April, 1999, made by and between Fleet National Bank, a
national banking association (as successor-in-interest to Fleet Bank of
Massachusetts, a Massachusetts banking corporation), having a regular place
of business at One Monarch Place, Springfield, Massachusetts (the "Bank");
and The Berkshire Gas Company, a Massachusetts public utility corporation
having a usual place of business at 115 Cheshire Road, Pittsfield,
Massachusetts (the "Borrower"), to the Loan Agreement between the Borrower
and the Bank dated as of December 14, 1993, as modified by that certain
Loan Modification Agreement between the Borrower and the Bank dated April
11, 1994 (as amended or modified, the "Loan Agreement"). All capitalized
terms used herein without definition shall have the meanings ascribed to
such terms in the Loan Agreement. As wed herein, the term "Loan Documents"
shall have the meaning set forth in the Loan Agreement, as amended hereby.
RECITALS
A. Pursuant to the Loan Agreement, the Bank has agreed to lend the
Borrower Six Million Dollars ($6,000,000) (the "Term Loan") with a maturity
date of April 1, 1999.
B. The Borrower has requested that the Bank renew the Term Loan
and extend the maturity date to April 1, 2004.
C. The Bank has agreed to such request upon the terms and
conditions set forth herein, and to accomplish the foregoing purpose, the
Borrower and the Bank are mutually desirous of amending the Loan Agreement
as set forth herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby expressly acknowledged, the Borrower and the Bank hereby agree as
follows:
ARTICLE I
AMENDMENTS TO LOAN AGREEMENT
The Loan Agreement is hereby amended as follows:
1.1 Amendment of Loan Modification Agreement. The Loan Modification
hereby amended by deleting the Preliminary Statement and Section 2 in their
entirety.
1.2 Amendment of Definition of Loan Documents. Section 1.2 of the
Loan hereby deleted in its entirety and replaced with the following
"1.2 Loan Documents Defined. As used herein, the term "Loan
Documents" shall mean, collectively, (i) this Loan Agreement, as
amended, (ii) that certain $6,000,000 Commercial Promissory Note
dated December 14, 1993 by the Borrower in favor of the Bank, as
modified and amended (the "Note") (iii) that certain $7,000,000
Demand Revolving Business Credit Note made by the Borrower on
February 17, 1995 in favor of the Bank, as amended, (iv) that certain
First Mortgage Indenture and Deed of Trust (the "Trust Indenture"),
dated July 1, 1954 between the Borrower (formerly known as Pittsfield
Coal Gas Company) and Chemical Bank (formerly known as Chemical Bank
and Trust Company) as Trustee, as amended, (v) that certain Note
Agreement (the "Note Agreement") of the Borrower dated as of
November 1, 1996 (regarding $16,000,000 7.80% Senior Notes due
November 15, 2021), (vi) that certain ISDA Master Agreement dated as
of February 16, 1999 between the Bank and the Borrower (the "Swap
Agreement"), (vii) that certain Letter Agreement dated
February 16, 1999 between the Bank and the Borrower confirming the
terms and conditions of the Swap Agreement, and (viii) any and all
other agreements and documents related to or executed or delivered in
connection with the foregoing agreements listed in (i) through (v) or
in connection with any existing or future indebtedness of the
Borrower to the Bank.
1.2A Amendment of Section 2.5. Section 2.5 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:
"2.5 Use of Proceeds. The proceeds of the Loans shall be used
for working capital and other general corporate purposes."
1.3 Amendment of Financial Statement Requirements.
(a) Section 3.1.1(i) of the Loan Agreement is hereby amended by
replacing the word "reviewed" with the word "audited".
(b) Section 3.1.1 (ii) of the Loan Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"(ii) As soon as available, and in any event within forty five
(45) days after the end of each of the first three quarters of each
fiscal year, internally prepared or accountant prepared consolidated
financial statements of the Borrower and Berkshire Energy Resources,
a Massachusetts business trust ("BER"), and its subsidiaries,
including balance sheets, statements of earnings and changes in cash
flow; provided, however, that if, and only for so long as, the
Borrower accounts for at least seventy five percent (75%) of the
revenues and capital of BER, the Borrower shall not be obligated to
provide such quarterly statements of the Borrower."
(c) Section 3.1.1(ii) of the Loan Agreement is hereby amended by
replacing the first sentence thereof with the following:
"With reasonable promptness, additional financial reports,
statements and information regarding the financial condition,
business and operations of the Borrower and BER as the Bank
reasonably may request from time to time."
(b) Section 3.1 of the Loan Agreement is hereby amended by adding
the following new Sections 3.1.2 and 3.1.3:
"3.1.2 In connection with the delivery of any of the foregoing
financial statements of the Borrower to the Bank, the Borrower hereby
covenants to cause a certified public accountant reasonably
acceptable to the Bank ("Accountants") to deliver a letter to the
Bank, upon which the Bank may rely, stating that such financial
statements have been prepared based on the same books and records of
the Borrower as the books and records of the Borrower used to prepare
any consolidated financial statements of BER {whether internally
prepared or auditor prepared) which include the Borrower's
financials.
3.1.3 The Borrower hereby covenants that upon reasonable
request of the Bank at any time and from time to time it shall cause
its Accountants to provide a letter to the Bank, upon which the Bank
may rely, stating (i) that such Accountants have reviewed the Trust
Indenture and the Note Agreement, each as then currently in effect,
and (ii) whether or not the Borrower is then in compliance with the
terms and provisions of the Trust Indenture and the Note Agreement."
1.4 Amendment of Section 7.4. Section 7.4(a) of the Loan Agreement
is hereby deleted in its entirety and replaced with the following:
"(a) If to the Bank, to it at:
Fleet National Bank
One Monarch Place
Springfield, MA 01102"
1.5 Pledge of Loan Documents. The following new Section 7.11 shall
be inserted immediately following Section 7.10:
"7.11 Pledge of Loan Documents. The Bank may at any time
pledge all or any portion of its rights under the Loan Documents
including, without limitation, any portion of the Note, to any of the
twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
enforcement thereof shall release the Bank from its obligations under
any of the loan documents."
ARTICLE II
AMENDMENTS TO COMMERCIAL PROMISSORY NOTE
The Note is hereby amended as follows:
2.1 The first and second sentences of the second paragraph are
hereby deleted in their entirety.
2.2 The third, fourth, fifth and sixth paragraphs are hereby
deleted entirely and replaced with the following:
"The term "Base LIBOR Rate" shall mean the rate per annum
obtained by dividing (i) the Fixed LIBOR Rate for each Interest
Period, by (ii) a percentage equal to one hundred percent (100%)
minus the reserve percentage applicable during such Interest Period
under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or if more than one such percentage is
applicable, minus the daily average of such percentages for those
days in such Interest Period during which any such percentage shall
be so applicable) for determining the maximum reserve requirements
(including, without limitation, any marginal reserve requirement) for
the Bank (or of any subsequent holder of this Note which is subject
to such reserve requirements) in respect of liabilities or assets
consisting of or including Eurocurrency liabilities having a term
equal to the Interest Period.
The term "Boston Banking Day" means a day on which banks are
not required or authorized by law to close in Boston, Massachusetts.
The term "Business Day" shall mean: any Boston Banking Day and,
if the applicable Business Day relates to the selection or
determination of any interest rate computed with reference to the
LIBOR Rate, any London Banking Day. If any day on which a payment is
due is not a Business Day, then the payment shall be due on the next
day following which is a Business Day, unless, with respect to
advances at the LIBOR Rate, the effect would be to make the payment
due in the next calendar month, in which event such payment shall be
due on the next preceding day which is a Business Day.
The term "Interest Period" shall mean the applicable period for
each LIBOR Loan beginning on the day selected, or deemed selected, by
the Borrower at least two (2) Business Days prior to the end of the
current Interest Period or, if no Interest Period has been selected,
at least two (2) Business Days prior to the beginning of a new
Interest Period, and ending (a) thirty (30) days thereafter at any
time that the Swap Agreement is then in effect or (b) thirty (30),
sixty (60), ninety (90) or one hundred twenty (120) days thereafter
as selected by the Borrower at any time that the Swap Agreement is
not then in effect.
The term "LIBOR Principal Amount" shall mean that portion of
the outstanding principal balance of the Loan with respect to which
the Borrower has made the LIBOR Election as described herein.
The term "Fixed LIBOR Rate" shall mean, with respect to each
Interest Period, the rate of interest, expressed as an annual rate,
equal to the simple average, rounded up to the nearest 1/16 of 1%, of
the rates shown on the display referred to as the "LIBOR page" (or
any display substituted therefor) of the Reuters U.S. Domestic Money
Service transmitted through the Reuters monitor system as being the
respective rates at which deposits in Dollars would be offered by the
principal London offices of each of the banks named thereon to major
banks in the London interbank market at approximately 11:00 a.m.
(London time) on the day which is two (2) London Banking Days before
the first day of such Interest Period for a period substantially
coextensive with such Interest Period.
The term "London Banking Day" means any day on which dealings
in deposits in Dollars are transacted in the London interbank market.
The term "Prime Rate" shall mean the per annum rate of interest
so designated from time to time by the Bank at its principal office
as its prime or commercial base lending rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best
rate being charged to any customer.
The outstanding principal balance shall bear interest at the
Base LIBOR Rate plus (a) eight-tenths percent (0.8%) at any time the
Swap Agreement is then in effect or (6) one and one eighth (1.125%)
percent at any time that the Swap Agreement is not then in effect (as
applicable, the "LIBOR Rate").
During any period of time when the Swap Agreement is not then
in effect, at least two (2) Business Days prior to each last day of
any Interest Period by 10:00 a.m. of a Boston Banking Day the
Borrower shall select the Interest Period from the alternatives
available as elsewhere provided for herein, by giving irrevocable
written notice, or by cable, tested telex, telecopier (with
authorized signature) or telephone, but if not written, such notice
shall be immediately confirmed by written notice, to Bank specifying
the Interest Period. If no such selection is made, then a thirty (30)
day Interest Period shall be deemed selected."
Payments of interest for each LIBOR Loan shall be made on the
last day of the Interest Period for each such LIBOR Loan. In any
event, payment of principal, together with all accrued and unpaid
interest thereon shall be due and payable in full on April 1, 2004."
2.3 The eighth and ninth paragraphs are hereby deleted in their
entirety and replaced with the following:
"The Borrower shall have the right from time to time, upon at
least two (2) Business Days prior written notice to the Bank, to
prepay any outstanding LIBOR Loan, in whole (but not in part), and,
except for prepayments resulting from revolving activity performed by
the Bank under the Bank's Target Balance Service, the Borrower shall
pay to the Bank a yield maintenance fee in an amount computed as
follows: the latest published rate preceding the date of prepayment
for United States Treasury Notes or Bills (Bills on a discounted
basis shall be converted to a bond equivalent) with a maturity date
closest to the tenor of the Interest Period chosen for the LIBOR
Loan, as to which the prepayment is made shall be subtracted from the
London Interbank Offered Rate component of the LIBOR Interest 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 Interest Period of the applicable LIBOR Loan. Said
amount shall be reduced to present value calculated by using the
number of days remaining in the Interest Period of the applicable
prepaid LIBOR Loan and using the above-referenced United States
Treasury Note or Bill rate and the number of days remaining in the
Interest Period of the applicable prepaid LIBOR Loan. The resulting
amount shall be the yield maintenance fee due to the Bank upon
prepayment of the LIBOR Loan.
The Borrower agrees to indemnify the Bank and to hold the Bank
harmless from and against any loss, cost or expense (including loss
of anticipated profits) that the Bank may sustain or incur as
consequence of (i) default by the Borrower m payment of the principal
amount of or any interest on any LIBOR Loans as and when due and
payable, including any such loss or expense arising from interest or
fees payable by the Bank to lenders of funds obtained by it in order
to maintain its LIBOR Loans, (ii) failure of the Borrower to make a
borrowing after the Borrower has given (or is deemed to have given) a
notice electing a LIBOR Loan, (iii) the making of any payment of a
LIBOR Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees
payable by the Bank to lenders of funds obtained by it in order to
maintain any such LIBOR Loans and (iv) default by the Borrower under
the Swap Agreement."
2.4 The seventh full paragraph on page 4 shall be amended by
replacing the words "six (6) month LIBOR Rate" in subsection (b) thereof
with the words "interest rate".
2.5 The following new paragraphs are hereby added immediately
following the sixth full paragraph on page 6 of the Note:
"The Bank shall have the unrestricted right, at any tune and
from time to time, and without the consent of or notice to the
Borrower, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in the
Bank's obligation to lend hereunder and any or all of the Loans held
by the Bank hereunder. In the event of any such grant by the Bank of
a participating interest to a Participant, whether or not upon notice
to the Borrower, the Bank shall remain responsible for the
performance of its obligations hereunder and the Borrower shall
continue to deal directly and solely with the Bank in connection with
the Bank's rights and obligations hereunder. The Bank may furnish any
information concerning the Borrower in its possession from time to
time to prospective Participants, provided that the Bank shall
require any such prospective Participant to agree in writing to
maintain the confidentiality of such information.
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
security document 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 security document, the Borrower will issue, in
lieu thereof, a replacement note or other security document in the
same principal amount thereof and otherwise of like tenor."
ARTICLE III
REPRESENTATIONS AND WARRANTIES; COLLATERAL
The Borrower hereby represents and warrants to the Bank that:
3.1 Compliance with the Loan Agreement and other Loan Documents. As
of the execution of this Amendment, the Borrower is in compliance with all
of the terms and provisions set forth in the Loan Agreement and in the
other Loan Documents to be observed or performed by the Borrower, except
where the failure of Borrower to comply has been waived in writing by the
Bank.
3.2. Representations in Loan Agreement and other Loan Documents. The
representations and warranties of the Borrower set forth in the Loan
Agreement and the other Loan Documents are true and correct in all material
respects as of the date of this Amendment except to the extent that such
representations and warranties relate solely to or are specifically
expressed as of a particular date or period which is past or expired.
3.3. No Event of Default. No default or Event of Default exists under
the Loan Agreement or any of the other Loan Documents.
ARTICLE IV
ACKNOWLEDGEMENT OF OBLIGATIONS
4.1 Acknowledgement of Obligations. Borrower hereby ratifies and
affirms all of the terms and provisions of the Loan Documents, as amended
hereby, and acknowledges and agrees that all of its obligations under any
of the Loan Documents to which the Bank is a party are owed to the Bank
without any offset, deduction, defense or counterclaim of any nature.
ARTICLE V
MODIFICATION OF AND CONSENT UNDER LOAN DOCUMENTS;
EFFECTIVENESS OF AMENDMENT
5.1. Loan Documents. The Loan Agreement and each of the other Loan
Documents are hereby amended to provide that any reference to the
"Agreement" in the Loan Agreement or any of the other Loan Documents
executed and or delivered in conjunction therewith (excluding the Trust
Indenture and the Note Agreement), or any reference to any of the other
Loan Documents in the Loan Agreement or any other Loan Document executed
and or delivered in conjunction therewith (excluding the Trust Indenture
and the Note Agreement), shall mean the Loan Agreement or such Loan
Document as amended by this Amendment, and as it is further amended,
restated, supplemented or modified from time to time.
5.2 Conditions Precedent. This Amendment shall become effective and
be deemed effective as of the date hereof upon the satisfaction by the
Borrower or waiver by the Bank of the following conditions precedent:
(a) Receipt by the Bank of this Amendment, duly executed by the
Borrower;
(b) Receipt by the Bank of the First Amendment to Demand Revolving
Business Credit Note between the Bank and the Borrower, duly executed by
the Borrower;
(c) Receipt by the Bank of Swap Agreement, duly executed by the
Borrower;
(d) Receipt by the Bank of the Consent of the Massachusetts
Department of Public Utilities to the terms of this Amendment;
(e) Payment to the Bank of its fee in the amount of Twenty Five
Thousand Dollars ($25,000); and
(f) Receipt by the Bank of such other documents, instruments and
agreements as the Bank and its counsel may reasonably request.
ARTICLE VI
GENERAL
6.1. Full Force and Effect. As expressly amended hereby, the Loan
Agreement shall continue in full force and effect in accordance with the
provisions thereof. As used in the Loan Agreement, "hereinafter", "hereto",
"hereof" or words of similar import, shall, unless the context otherwise
requires, mean the Loan Agreement as amended by this Amendment.
6.2 Applicable Law. This Amendment shall be governed by and
construed in accordance with the internal laws and judicial decisions of
The Commonwealth of Massachusetts (without giving effect to principles of
conflicts or choice of laws of Massachusetts or of any other jurisdiction).
6.3 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one and the same instrument.
6.4 Expenses. The Borrower shall reimburse the Bank for all
reasonable legal fees and expenses incurred by the Bank in connection with
the preparation, negotiation, execution and delivery of this Amendment and
all other agreements and documents or contemplated hereby.
6.5. Headings. The headings in this Amendment are for the purpose
of reference only and shall not affect the construction of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered on the date first above written.
BORROWER:
THE BERKSHIRE GAS COMPANY
ATTEST:
/s/Cheryl M. Clark By: s/s Michael J. Marrone
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Clerk Name:
Title:: Vice President,
Treasurer & C.F.O.
(CORPORATE SEAL)
LENDER:
FLEET NATIONAL BANK
By: s/s Sheryl L. McQuade
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Sheryl L. McQuade,
Vice President