EXHIBIT 10.26
BARNSTABLE WATER COMPANY
NOTE AGREEMENT
Dated as of February 15, 1991
Re: $2,000,000 10.2% Senior Notes
Due February 15, 2011
TABLE OF CONTENTS
(Not a part of the Agreement)
Section Heading Page
1 DESCRIPTION OF NOTES AND COMMITMENT 1
1.1 Description of Notes 1
1.2 Commitment, Closing Date 1
1.3 Guarantee of the Notes 2
2. PREPAYMENT OF NOTES 2
2.1 Required Prepayments 2
2.2 Optional Prepayments 2
2.3 Mandatory Prepayment upon Change of Control 2
2.4 Notice of Optional Prepayments 3
2.5 Application of Prepayments 4
2.6 Direct Payment 4
3. REPRESENTATIONS 4
3.1 Representations of the Company 4
3.2 Representations of the Purchaser 4
4. CLOSING CONDITIONS 4
4.1 Conditions 4
4.2 Waiver of Conditions 5
5. COMPANY COVENANTS 5
5.1 Corporate Existence, Etc. 5
5.2 Insurance 6
5.3 Taxes, Claims for Labor and Materials, Compliance with Laws 6
5.4 Maintenance, Etc. 6
5.5 Nature of Business 6
5.6 Limitations on Current Debt and Funded Debt 6
5.7 Limitation on Liens 7
5.8 Limitation on Sale and Leasebacks 8
5.9 Restricted Payments 9
5.10 Investments 9
5.11 Mergers, Consolidations and Sales of Assets 10
5.12 Guaranties 12
5.13 Repurchase of Notes 12
5.14 Transactions with Affiliates 12
5.15 Termination of Pension Plans 13
5.16 Reports and Rights of Inspection 13
6. EVENTS OF DEFAULT AND REMEDIES THEREFOR 15
6.1 Events of Default 15
6.2 Notice to Holders 17
6.3 Acceleration of Maturities 17
6.4 Rescission of Acceleration 17
7. AMENDMENTS, WAIVERS AND CONSENTS 18
7.1 Consent Required 18
7.2 Solicitation of Holders 18
7.3 Effect of Amendment or Waiver 18
8. INTERPRETATION OF AGREEMENT; DEFINITIONS 18
8.1 Definitions 18
8.2 Accounting Principles 25
8.3 Directly or Indirectly 25
9. MISCELLANEOUS 25
9.1 Registered Notes 25
9.2 Exchange of Notes 25
9.3 Loss, Theft, Etc. of Notes 25
9.4 Expenses, Stamp Tax Indemnity 26
9.5 Powers and Rights Not Waived; Remedies Cumulative 26
9.6 Notices 26
9.7 Successors and Assigns 26
9.8 Survival of Covenants and Representations 26
9.9 Severability 27
9.10 Governing Law 27
9.11 Captions 27
Signature Page 27
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I - Address of Purchaser
Schedule II - Liens Securing Funded Debt (including Capitalized
Leases) as of September 30,1990
Exhibit A - Form of 10.2% Senior Note due February 15, 2011
Exhibit B - Form of Guaranty Agreement
Exhibit C - Representations and Warranties of the Company
Exhibit D - Representations and Warranties of the Guarantor
Exhibit E - Description of Special Counsel's Closing Opinion
Exhibit F - Description of Closing Opinion of Counsel to the
Company and the Guarantor
BARNSTABLE WATER COMPANY
47 Old Yarmouth Road
Hyannis, Massachusetts 02601-0326
NOTE AGREEMENT
Re: $2,000,000 10.2% Senior Notes
Due February 15, 2011
Dated as of February 15, 1991
Indianapolis Life Insurance Company
2960 North Meridian Street
Indianapolis, Indiana 46208
Attention: Securities Department
Gentlemen:
The undersigned, BARNSTABLE WATER COMPANY, a Massachusetts
corporation (the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
1.1. Description of Notes. The Company will authorize the
issue and sale of $2,000,000 aggregate principal amount of its 10.2% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from such
date at the rate of 10.2% per annum, payable semiannually on the fifteenth day
of each February and August in each year (commencing August 15, 1991) and at
maturity and to bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest at the rate
of 12.2% per annum after the date due, whether by acceleration or otherwise,
until paid, to be expressed to mature on February 15, 2011, and to be
substantially in the form attached hereto as Exhibit A. Interest on the Notes
shall be computed on the basis of a 360-day year of twelve 30-day months. The
Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and
in the amounts and with the premium, if any, set forth in Section 2 of this
Agreement. You are hereinafter sometimes referred to as the "Purchaser".
1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company the entire issue of the Notes at a price
equal to the principal amount thereof on the Closing Date hereinafter mentioned.
Delivery of the Notes will be made at the offices of Hill &
Barlow, One International Place, Boston, Massachusetts 02110, against payment
therefor in Federal Reserve or other funds current and immediately available at
the principal office of Shawmut Bank, N.A., ABA No. 011000206, Attention: Philip
Messina ((617) 292-2969) in the amount of the purchase price for credit to the
account of the Company (Account No.20-029-223-6) at 10:00 A.M. Boston time, on
March 19, 1991 or such later date (not later than March 31, 1991) as shall be
mutually
agreed upon by the Company and you (the "Closing Date"). The Notes delivered to
you on the Closing Date will be delivered to you in the form of a single
registered Note for the full amount of your purchase (unless different
denominations are specified by you), in the form attached hereto as Exhibit A,
registered in your name or in the name of your nominee, all as you may specify
at any time prior to the date fixed for delivery.
1.3. Guarantee of the Notes. Payment of the principal of and
interest and premium, if any, on the Notes will be unconditionally guaranteed by
Barnstable Holding Co., Inc., a Delaware corporation of which the Company is a
subsidiary (the; "Guarantor"), under and pursuant to a Guaranty Agreement (the
"Guaranty") dated as of February 15, 1991, substantially in the form attached
hereto as Exhibit B.
SECTION 2. PREPAYMENT OF NOTES.
2.1. Required Prepayments. The Company agrees that on February
15, annually, it will prepay and apply and there shall become due and payable on
the principal indebtedness evidenced by the Notes (a) commencing February 15,
1997 and ending February 15, 2001, both inclusive, an amount equal to the lesser
of (i) $75,000 or (ii) the principal amount of the Notes then outstanding and
(b) commencing February 15, 2002 and ending February 15,2010, both inclusive, an
amount equal to the lesser of (i) $100,000 or (ii) the principal amount of the
Notes then outstanding. The entire remaining principal amount of the Notes shall
become due and payable on February 15, 2011. No premium shall be payable in
connection with any required prepayment made pursuant to this Section 2.1. For
purposes of this Section 2.1, any prepayment of less than all of the outstanding
Notes pursuant to Section 2.2 shall be deemed to be applied first, to the amount
of principal scheduled to remain unpaid on February 15, 2011, and then, to the
remaining scheduled principal payments in inverse chronological order.
2.2. Optional Prepayments. In addition to the payments
required by Section 2.1, upon compliance with Section 2.4 the Company shall have
the privilege of prepaying the outstanding Notes, either in whole or in part
(but if in part then in a minimum principal amount of $100,000):
(a) at any time and from time to time on or after February 15,
2001, by payment of the principal amount of the Notes, or portion thereof to be
prepaid, and accrued interest thereon to the date of such prepayment, together
with a premium equal to the Make-Whole Amount, determined as of five business
days prior to the date of such prepayment pursuant to this Section 2.2(a); and
(b) at any time and from time to time out of the net proceeds
received by the Company from the exercise of the power of eminent domain or a
purchase under threat of the exercise of the power of eminent domain on the part
of any public authority, including a taking by eminent domain or purchase under
the Company's charter, Chapter 286 of the 1911 Acts of the Massachusetts General
Assembly, as amended, of all or any part of the property of the Company the
taking of which would impair the ability of the Company to carry on its business
as conducted on the Closing Date, by payment of the principal amount of the
Notes or portion thereof to be prepaid, and accrued interest thereon to the date
of such prepayment, but without payment of any premium.
2.3. Mandatory Prepayment upon Change of Control. In the event
that a Change of Control shall occur or the Company shall have knowledge of any
impending Change of Control, the Company shall give written notice thereof (a
"Company Notice") promptly (and in any event within three business days
thereafter) to each holder of the Notes then outstanding. The Company Notice
shall (i) describe in reasonable detail the facts and
circumstances giving rise to such Change of Control, (ii) offer to prepay, on a
date (the "Change of Control Prepayment Date") which shall be not less than 30
days nor more than 60 days after the date of the Company Notice, all of the
Notes held by such holder, at a price equal to 100% of the principal amount of
Notes so to be prepaid, accrued interest thereon to the Change of Control
Prepayment Date, together with the then applicable Make-Whole Amount, (iii)
request such holder to notify the Company in writing, not less than 10 days
prior to the Change of Control Prepayment Date, of its acceptance or rejection
of such offer, (iv) inform such holder that, upon its receipt of the Company
Notice, failure to reject such offer in writing on or before the 10th day prior
to the Change of Control Prepayment Date shall be deemed acceptance of such
offer and (v) set forth the respective names and addresses of, and principal
amounts of the Notes held by, any other holders of the Notes then outstanding.
Not less than two business days prior to the Change of Control Prepayment Date,
the Company shall provide each holder of the Notes with a reasonably detailed
computation of the Make-Whole Amount.
The Company covenants and agrees that it will on the Change of
Control Prepayment Date prepay all of the Notes held by each holder of the Notes
then outstanding which has accepted the prepayment offer in accordance with this
Section 2.3, by payment of the principal amount of such Notes, together with
interest accrued on the unpaid principal amount of such Notes to the Change of
Control Prepayment Date and the then applicable Make-Whole Amount.
For purposes of this Section 2.3, the following terms shall
have the meanings ascribed thereto below:
"Change of Control" shall mean the occurrence after the
Closing Date of any event which results in either (i) the legal or beneficial
ownership of more than 50% of the outstanding shares of Voting Stock of the
Company being owned by any Person or Control Group other than the Designated
Shareholders or (ii) any Person or Control Group other than the Designated
Shareholders having the power to elect, appoint or cause the election or
appointment of, at least a majority of the members of the Board of Directors of
the Company through beneficial ownership of capital stock of the Company or
otherwise.
Barnstable Water Company
"Control Group" shall mean any related Persons constituting a
"group" for the purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended (other than the Designated Shareholders).
"Designated Shareholders" shall mean the shareholders and
beneficial owners of the Company on the Closing Date (the "Original
Shareholders"), any Person who is the spouse of any Original Shareholder, any
Person or the spouse of any Person who is a lineal descendant of any Original
Shareholder; or any corporation or partnership of which any of such Persons are
legally entitled to exercise more than a majority of the voting power, or any
trust of which any of such Persons are the sole beneficiaries or the executor or
administrator of the estate of any such Person or any legal guardian of any such
Person.
2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to Section 2.2 to each holder
thereof not less than 30 days nor more than 60 days before the date fixed for
such optional prepayment specifying (i) such date, (ii) the principal amount of
the holder's Notes to be prepaid on such date, (iii) that a premium may be
payable, (iv) the date when such premium will be calculated, (v) the estimated
premium, and (vi) the accrued interest applicable to the prepayment. Such notice
of prepayment shall also certify all facts, if any, which are conditions
precedent to any such prepayment. Notice of prepayment
having been so given, the aggregate principal amount of the Notes specified in
such notice, together with accrued interest thereon and the premium, if any,
payable with respect thereto shall become due and payable on the prepayment date
specified in said notice. Not later than two business days prior to the
prepayment date specified in such notice, the Company shall provide each holder
of a Note written notice of the premium, if any, payable in connection with such
prepayment and, whether or not any premium is payable, a detailed computation of
the Make-Whole Amount.
2.5. Application of Prepayments. All partial prepayments
pursuant to Section 2.1 or Section 2.2 shall be applied on all outstanding Notes
ratably in accordance with the unpaid principal amounts thereof.
2.6. Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by you
or your nominee or owned by any subsequent Institutional Holder which has given
written notice to the Company requesting that the provisions of this Section 2.6
shall apply, the Company will punctually pay when due the principal thereof,
interest thereon and premium, if any, due with respect to said principal,
without any presentment thereof, directly to you, to your nominee or to such
subsequent Institutional Holder at your address or your nominee's address set
forth in Schedule I hereto or such other address as you, your nominee or such
subsequent Institutional Holder may from time to time designate in writing to
the Company or, if a bank account with a United States bank is designated for
you or your nominee on Schedule I hereto or in any written notice to the Company
from you, from your nominee or from any such subsequent Institutional Holder,
the Company will make such payments in immediately available funds to such bank
account, marked for attention as indicated, or in such other manner or to such
other account in any United States bank as you, your nominee or any such
subsequent Institutional Holder may from time to time direct in writing.
SECTION 3. REPRESENTATIONS.
3.1. Representations of the Company. The Company represents
and warrants that all representations and warranties set forth in Exhibit C are
true and correct as of the date hereof and are incorporated herein by reference
with the same force and effect as though herein set forth in full.
3.2. Representations of the Purchaser. You represent, and in
entering into this Agreement the Company understands, that you are acquiring the
Notes for the purpose of investment and not with a view to the resale or
distribution thereof, and that you have no present intention of selling,
negotiating or otherwise disposing of the Notes; it being understood, however,
that the disposition of your property shall at all times be and remain within
your control. You further represent that you are acquiring the Notes for your
own account and with your general corporate assets and not with the assets of
any separate account in which any employee benefit plan has any interest. As
used in this Section, the terms "separate account" and "employee benefit plan"
shall have the respective meanings assigned to them in ERISA.
SECTION 4. CLOSING CONDITIONS.
4.1. Conditions. Your obligation to purchase the Notes on the
Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following further conditions
precedent:
(a) Guaranty. Concurrently with the delivery of the Notes to
you on the Closing Date, you shall have received the Guaranty duly executed by
the Guarantor.
(b) Closing Certificates. You shall have received certificates
dated the Closing Date, the truth and accuracy of which shall be a condition to
your obligation to purchase the Notes proposed to be sold to you (i) signed by
the President or a Vice President of the Company, and to the effect that (x) the
representations and warranties of the Company set forth in Exhibit C hereto are
true and correct on and with respect to the Closing Date, (y) the Company has
performed all of its obligations hereunder which are to be performed on or prior
to the Closing Date, and (z) no Default or Event of Default has occurred and is
continuing, and (ii) signed by the President of the Guarantor and to the effect
that the representations and warranties set forth in Exhibit D hereto are true
and correct on and with respect to the Closing Date.
(c) Legal Opinions. You shall have received from Chapman and
Cutler, who are acting as your special counsel in this transaction, and from
Hill & Harlow, a Professional Corporation, counsel for the Company and the
Guarantor, their respective opinions dated the Closing Date, in form and
substance satisfactory to you, and covering the matters set forth in Exhibits E
and F, respectively, hereto.
(d) Consents. All requisite filings have been made with, and
all necessary consents and approvals, in form and substance satisfactory to you,
shall have been obtained from, all applicable regulatory and other governmental
authorities and third parties, including, without limitation, the Massachusetts
Department of Public Utilities. In addition, the period for the appeal of the
authorization orders of the Massachusetts Department of Public Utilities shall
have been exhausted and no appeals shall have been made in such period.
(e) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in form
and substance to you and your special counsel, and you shall have received a
copy (executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.
4.2. Waiver of Conditions. If on the Closing Date the Company
fails to tender to you the Notes to be issued to you on such date or if the
conditions specified in Section 4.1 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this Agreement. Without
limiting the foregoing, if the conditions specified in 54.1 have not been
fulfilled, you may waive compliance by the Company with any such condition to
such extent as you may in your sole discretion determine. Nothing in this
Section 4.2 shall operate to relieve the Company of any of its obligations
hereunder or to waive any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any
amount remains unpaid on any Note:
5.1. Corporate Existence, Etc. The Company will preserve and
keep in full force and effect, and will cause each Restricted Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses, permits and franchises necessary to the proper conduct of its
business, provided that the foregoing shall not prevent any transaction
permitted by Section 5.11.
5.2. Insurance. The Company will maintain, and will cause each
Restricted Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers and in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties, including without
limitation, general public liability insurance at any time during which members
of the general public are permitted access to the Company's property for
recreational purposes.
5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or such
Restricted Subsidiary, respectively, or upon or in respect of all or any part of
the property or business of the Company or such Restricted Subsidiary, all trade
accounts payable in accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid might become a Lien upon
any property of the Company or such Restricted Subsidiary; provided the Company
or such Restricted Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (i) the validity,
applicability or amount thereof is being contested in good faith by appropriate
actions or proceedings which will prevent the forfeiture or sale of any property
of the Company or such Restricted Subsidiary or any material interference with
the use thereof by the Company or such Restricted Subsidiary, and (ii) the
Company or such Restricted Subsidiary shall set aside on its books, reserves
deemed by it to be adequate with respect thereto. The Company will promptly
comply and will cause each Subsidiary to promptly comply with all laws,
ordinances or governmental rules and regulations to which it is subject
including, without limitation, M.G.L.A. c. 164 and c. 165, to the extent
applicable to water companies, the Occupational Safety and Health Act of 1970,
as amended, ERISA and all laws, ordinances, governmental rules and regulations
relating to environmental protection in all applicable jurisdictions, the
violation of which could materially and adversely affect the properties,
business, prospects, profits or condition of the Company and its Restricted
Subsidiaries or would result in any Lien not permitted under Section 5.1.
5.4. Maintenance, Etc. (a) The Company will maintain, preserve
and keep, and will cause each Restricted Subsidiary to maintain, preserve and
keep, its properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working order
and from time to time will make all necessary repairs, replacements, renewals
and additions so that at all times the efficiency thereof shall be maintained.
(b) The Company will accrue on its books annually reserves for
depreciation in such amounts as shall be satisfactory to any governmental
authority having regulatory jurisdiction over the Company, but in no event less
than 1.25% of the Company's depreciable property.
5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Restricted Subsidiaries would be substantially
changed from the storage, transmission and sale of water for domestic,
industrial and commercial uses, and activities related thereto.
5.6. Limitations on Current Debt and Funded Debt.
(a) The Company will not, and will not permit any Restricted
Subsidiary to,
create, assume or incur or in any manner become liable in respect of any Current
Debt or Funded Debt, except:
(1) Funded Debt evidenced by the Notes;
(2) Current Debt and Funded Debt of the Company outstanding as
of the date of this Agreement and reflected in Annex I to Exhibit C hereto;
(3) unsecured Funded Debt of the Company and Funded Debt of
the Company and its Restricted Subsidiaries secured by Liens permitted by
Section 5.1(g), provided that at the time of issuance thereof and after giving
effect thereto and to the application of the proceeds thereof:
(i) Consolidated Funded Debt shall not exceed 75% of
Consolidated Tangible Net Worth, and
(ii) the Net Income Available for Fixed Charges in
any consecutive 12 of the 15 calendar months immediately preceding any date of
determination thereof shall have equalled at least 175% of Pro Forma Fixed
Charges;
(4) any refinancing of Funded Debt issued and outstanding
pursuant to Section 5.6(a)(2) or Section 5.6(a)(3) (without increase in
principal amount from the amount outstanding on the date of such refinancing);
(5) unsecured Current Debt of the Company, provided that at
the time of issuance thereof and after giving effect thereto and to the
application of the proceeds thereof, the aggregate of all Consolidated Funded
Debt and Consolidated Current Debt shall not exceed 75% of the sum of Total
Capitalization plus Consolidated Current Debt; and
(6) Current Debt or Funded Debt of a Restricted Subsidiary to
the Company or to a Wholly-owned Restricted Subsidiary.
(b) Any corporation which becomes a Restricted Subsidiary
after the date hereof shall for all purposes of this Section 5.6 be deemed to
have created, assumed or incurred at the time it becomes a Restricted Subsidiary
all Funded Debt of such corporation existing immediately after it becomes a
Restricted Subsidiary.
5.7. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be incurred
or to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Restricted Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention devices,
except:
(a) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided that payment thereof is not at the time required by
Section 5.3;
(b) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a
Restricted Subsidiary shall at any time in good faith be prosecuting an appeal
or proceeding for a review and in respect of which a stay of execution pending
such appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's and
attorneys' liens and statutory landlords' liens) and Liens to secure the
performance of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like general nature
incurred in the ordinary course of business and not in connection with the
borrowing of money, provided in each case, the obligation secured is not overdue
or, if overdue, is being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the Company
and its Restricted Subsidiaries or which customarily exist on properties of
corporation's engaged in similar activities and similarly situated and which do
not in any event materially impair their use in the operation of the business of
the Company and its Restricted Subsidiaries;
(e) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to another Restricted Subsidiary;
(f) hereto; and Liens existing as of September 30, 1990 and
reflected in Schedule II
(g) Liens incurred after the Closing Date given to secure the
payment of the purchase price incurred in connection with the acquisition of
fixed assets useful and intended to be used in carrying on the business of the
Company or a Restricted Subsidiary, including Liens existing on such fixed
assets at the time of acquisition thereof or at the time of acquisition by the
Company or a Restricted Subsidiary of any business entity then owning such fixed
assets, whether or not such existing Liens were given to secure the payment of
the purchase price of the fixed assets to which they attach so long as they were
not incurred, extended or renewed in contemplation of such acquisition, provided
that (i) the Lien shall attach solely to the fixed assets acquired or purchased,
(ii) at the time of acquisition of such fixed assets, the aggregate amount
remaining unpaid on all Indebtedness secured by Liens on such fixed assets
whether or not assumed by the Company or a Restricted Subsidiary shall not
exceed an amount equal to 65% (or 100% in the case of Capitalized Leases) of the
lesser of the total purchase price or fair market value at the time of
acquisition of such fixed assets (as determined in good faith by the Board of
Directors of the Company), and (iii) all such Indebtedness shall have been
incurred within the applicable limitations provided in Section 5.6(a)(3) or
Section 5.6(a)(4).
5.8. Limitation on Sale and Leasebacks. The Company will not,
and will not permit any Restricted Subsidiary to, enter into any arrangement
whereby the Company or any Restricted Subsidiary shall sell or transfer any
property owned by the Company or any Restricted Subsidiary to any Person other
than the Company or a Restricted Subsidiary and thereupon the Company or any
Restricted Subsidiary shall lease or intend to lease, as lessee, the same
property unless:
(a) (i) the property was owned by the Company or such
Restricted Subsidiary
for a period not exceeding 12 months prior to the date of transfer, or (ii) the
property consists of real property on which substantial fixed improvements have
been constructed within the 12 months prior to the date, of such transfer,
regardless of the period during which such real property was owned by the
Company or such Restricted Subsidiary prior to the date of transfer; and
(b) such sale and leaseback would be permitted by Sections
5.6, 5.1 and 5.11.
5.9. Restricted Payments. The Company will not, except as
hereinafter provided:
(a) Declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or other
distributions payable (i) in respect of the Company's 6% cumulative preferred
stock and (ii) solely in shares of capital stock of the Company);
(b) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its capital
stock (other than in exchange for or out of the net cash proceeds to the Company
from the substantially concurrent issue or sale of other shares of capital stock
of the Company or warrants, rights or options to purchase or acquire any shares
of its capital stock); or
(c) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such other
payments or distributions being herein collectively called "Restricted
Payments"), if, after giving effect thereto, either (i) an Event of Default
shall have occurred and be continuing or (ii) the sum of (x) the aggregate
amount of Restricted Payments made during the period from and after December 31,
1990 to and including the date of the making of the Restricted Payment in
question, plus (y) the aggregate amount of all Restricted investments made by
the Company or any Restricted Subsidiary during said period would exceed 50% of
Consolidated Net Income for such period, computed on a cumulative basis for said
entire period after deducting all dividends paid on the 6% cumulative preferred
stock of the Company outstanding on the Closing Date (or if such Consolidated
Net Income is a deficit figure, then minus 100% of such deficit).
The Company will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after the date of declaration
thereof.
For the purposes of this Section 5.9, the amount or any
Restricted Payment declared, paid or distributed in property shall be deemed to
be the greater of the book value or fair market value (as determined in good
faith by the Board of Directors of the Company) of such property at the time of
the making of the Restricted Payment in question.
5.10. Investments. The Company will not, and will not permit
any Restricted Subsidiary to, make any Investments, other than:
(a) Investments by the Company and its Restricted Subsidiaries
in and to Restricted Subsidiaries, including any Investment in a corporation
which, after giving effect to
such Investment, will become a Restricted Subsidiary;
(b) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by the Company
or any Restricted Subsidiary, is accorded the highest rating by Standard &
Poor's Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's") or other
nationally recognized credit rating agency of similar standing;
(c) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of America, the
payment or guarantee of which constitutes a full faith and credit obligation of
the United States of America, in either case, maturing in twelve months or less
from the date of acquisition thereof;
(d) Investments in certificates of deposit maturing within one
year from the date of issuance thereof, issued by a bank or trust company
organized under the laws of the United States or any state thereof, having
capital, surplus and undivided profits aggregating at least $100,000,000 and
whose long-term certificates of deposit are, at the time of acquisition thereof
by the Company or a Restricted Subsidiary, rated AA or better by S&P or Aa or
better by Moody's;
(e) loans or advances in the usual and ordinary course of
business to officers, directors and employees for expenses (including moving
expenses related to a transfer) incidental to carrying on the business of the
Company or any Restricted Subsidiary;
(f) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted Subsidiaries;
(g) investments in Funded Debt of Barlaco, Inc., a
Massachusetts corporation ("Barlaco") incurred for the purpose of paying taxes
owed by Barlaco, provided that such Funded Debt shall bear interest (which may
be expressed to be payable at the maturity of such Funded Debt); and provided
further that such Funded Debt shall have a fixed maturity date and shall become
due and payable upon the sale of any real property owned by Barlaco; and
(h) other Investments (in addition to those permitted by the
foregoing provisions of this Section 5.10), provided that (i) all such other
Investments shall have been made out of funds available for Restricted Payments
which the Company or any Restricted Subsidiary would then be permitted to make
in accordance with the provisions of Section 5.9 and (ii) after giving effect to
such other Investments, no Event of Default shall have occurred and be
continuing.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 5.10, such Investments shall be taken at
the original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation therein, but less any amount repaid or recovered on
account of capital or principal.
For purposes of this Section 5.10, at any time when a
corporation becomes a Restricted Subsidiary, all Investments of such corporation
at such time shall be deemed to have been made by such corporation, as a
Restricted Subsidiary, at such time.
5.11. Mergers, Consolidations and Sales or Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, (i} consolidate with or be a party to a merger with any other
corporation or (ii) sell, lease or
otherwise dispose of all or any substantial part (as defined in paragraph (d) of
this Section 5.11) of the assets of the Company and its Restricted Subsidiaries,
provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or
into the Company or any Wholly-owned Restricted Subsidiary so long as in any
merger or consolidation involving the Company, the Company shall be the
surviving or continuing corporation;
(2) the Company may consolidate or merge with any other
corporation if (i) the surviving or continuing corporation (the "New Company")
shall be a corporation organized and existing under the laws of the United
States of America or any State thereof or the District of Columbia, (ii) the New
Company shall be a corporation principally engaged in the storage, transmission
and sale of water for domestic industrial and commercial uses, and activities
related thereto, (iii) the New Company shall expressly and unconditionally
assume, by an instrument in writing, both the due and punctual payment of the
principal of (and premium, if any) and interest on all the Notes and the due and
punctual performance or observance of every covenant of this Agreement and the
Notes to be performed or observed by the Company, (iv) the Company shall have
delivered to the holders of the Notes a certificate of a responsible officer of
the Company and an opinion of counsel, each stating that such consolidation or
merger complies with the provisions of this Section 5.11(a)(2) and that all
conditions precedent relating to such transaction provided for in this Section
5.11(a)(2) have been met, (v) at the time of such consolidation or merger and
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing, and (vi) after giving effect to such consolidation or" merger
the New Company would be permitted to incur at least $1.00 of additional Funded
Debt under the provisions of Section 5.6(a)(3); and
(3) any Restricted Subsidiary may sell, lease or otherwise
dispose of all or any substantial part of its assets to the Company or any
Wholly-owned Restricted Subsidiary Water Company
(b) The Company will not permit any Restricted Subsidiary to
issue or sell any shares of stock of any class (including as "stock" for the
purposes of this Section 5.11, any warrants, rights or options to purchase or
otherwise acquire stock or other Securities exchangeable for or convertible into
stock) of such Restricted Subsidiary to any Person other than the Company or a
Wholly-owned Restricted Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly pre-existing preemptive
rights of minority shareholders in connection with the simultaneous issuance of
stock to the Company and/or a Restricted Subsidiary whereby the Company and/or
such Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose
of any shares of stock of any Restricted Subsidiary (except to qualify directors
or as allowed by Section 5.9) or any Indebtedness of any Restricted Subsidiary,
and will not permit any Restricted Subsidiary to sell, transfer or otherwise
dispose of (except to the Company or a Wholly-owned Restricted Subsidiary) any
shares of stock or any Indebtedness of any other Restricted Subsidiary, unless:
(1) simultaneously with such sale, transfer, or disposition,
all shares of stock and all Indebtedness of such Restricted Subsidiary at the
time owned by the Company and by every other Restricted Subsidiary shall be
sold, transferred or disposed of as an entirety;
(2) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed sale,
transfer or disposition of said shares of stock and
Indebtedness is in the best interests of the Company;
(3) said shares of stock and Indebtedness are sold,
transferred or otherwise disposed of to a Person, for a cash consideration and
on terms reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(4) the Restricted Subsidiary being disposed of shall not have
any continuing investment in the Company or any other Restricted Subsidiary not
being simultaneously disposed of; and
(5) such sale or other disposition does not involve a
substantial part (as hereinafter defined) of the assets of the Company and its
Restricted Subsidiaries.
(d) As used in this Section 5.11, a sale, lease or other
disposition of assets (a "Disposition") shall be deemed to be a "substantial
part" of the assets of the Company and its Restricted Subsidiaries only if the
book value of such assets, when added to the book value of all other assets
sold, leased or otherwise disposed of by the Company and its Restricted
Subsidiaries (other than in the ordinary course of business) either (i) during
the 12-month period ending on the date of such Disposition, exceeds 10% of
Tangible Assets, determined as of the end of the immediately preceding fiscal
year or (ii) during the period from and after the Closing Date to the date of
determination thereof exceeds 25% of Tangible Assets determined as of the end of
the immediately preceding fiscal year; provided, that the Company and its
Restricted Subsidiaries may make a Disposition in excess of the limitations set
forth above if the proceeds from such Disposition are (x) applied to the
prepayment of the Notes in accordance with the provisions of Section 2.2, Or (y)
deposited with a financial institution and held in an account which is (I)
segregated from all other accounts of the Company and its Restricted
Subsidiaries, (2) invested in Investments of the nature described in Section
5.10(b), (c) or (d) and (3) applied to the purchase of other property of a
similar nature and similar value useful and to be used in the business of the
Company and its Restricted Subsidiaries. Any proceeds not applied to the
purchase of other property pursuant to this Section 5.11(d) within one year from
the date of any such Disposition, shall, not later than the first anniversary
date of such Disposition, be applied to the prepayment of the Notes in
accordance with the provisions of Section 2.2.
5.12. Guaranties. The Company will not, and will not permit
any Restricted Subsidiary to, become or be liable in respect of any Guaranty
except Guaranties by the Company which are limited in amount to a stated maximum
dollar exposure or which constitute Guaranties of obligations incurred by any
Restricted Subsidiary in compliance with the provisions of this Agreement.
5.13. Repurchase of Notes. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase or
make any offer to repurchase any Notes unless an offer has been made to
repurchase Notes, pro rata, from all holders of the Notes at the same time and
upon the same terms. In case the Company repurchases or otherwise acquires any
Notes, such Notes shall immediately thereafter be cancelled and no Notes shall
be issued in substitution therefor. Without limiting the foregoing, upon the
purchase or other acquisition of any Notes by the Company, any Restricted
Subsidiary or any Affiliate, such Notes shall no longer be outstanding for
purposes of any section of this Agreement relating to the taking by the holders
of the Notes of any actions with respect hereto, including, without limitation,
Section 6.3, Section 6.4 and Section 7.1.
5.14. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any
Affiliate (including, without limitation, the purchase from, sale to or exchange
of property with, or the rendering of any service by or for, any Affiliate),
except in the ordinary course of and pursuant to the reasonable requirements of
the Company's or such Restricted Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Restricted Subsidiary
than would obtain in a comparable arm's length transaction with a Person other
than an Affiliate.
5.15.Termination of Pension Plans. The Company will not and
will not permit any Subsidiary to withdraw from any Multiemployer Plan or permit
any employee benefit plan maintained by it to be terminated if such withdrawal
or termination could result in withdrawal liability (as described in Part I of
Subtitle E of Title IV of ERISA) or the imposition of a Lien on any property of
the Company or any Subsidiary pursuant to Section 4068 of ERISA.
5.16. Reports and Rights of Inspection. The Company will keep,
and will cause each Restricted Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of the Company or
such Restricted Subsidiary, in accordance with GAAP consistently applied (except
for changes disclosed in the financial statements furnished to you pursuant to
this Section 5.16 and concurred in by the independent public accountants
referred to in Section 5.16(b) hereof), and will furnish to you so long as "you
are the holder of any Note and to each other institutional Holder of the then
outstanding Notes (in duplicate if so specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any
event within 75 days after the end of the first quarterly fiscal period and
within 60 days after the end of each other quarterly fiscal period of each
fiscal year, copies of:
(1) consolidated and consolidating balance sheets of the
Company and its Restricted Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated figures for the
fiscal year then most recently ended,
(2) consolidated and consolidating statements of income of the
Company and its Restricted Subsidiaries for such quarterly fiscal period and for
the portion of the fiscal year ending with such quarterly fiscal period, in each
case setting forth in comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, and
(3) consolidated and consolidating statements of cash flows of
the Company and its Restricted Subsidiaries for the portion of the fiscal year
ending with such quarterly fiscal period, setting forth in comparative form the
consolidated figures for the corresponding period of the preceding fiscal year,
all in reasonable detail prepared in conformity with the accounting procedures
of the Massachusetts Department of Public Utilities and certified as complete
and correct by an authorized financial officer of the Company;
(b) Annual Statements. As soon as available and in any event
within 120 days after the close of each fiscal year of the Company, copies of:
(1) consolidated and consolidating balance sheets of the
Company and its Restricted Subsidiaries as of the close of such fiscal year, and
(2) consolidated and consolidating statements of income and
retained earnings
and cash flows of the Company and its Restricted Subsidiaries for such fiscal
year,
in each case setting forth in comparative form the consolidated figures for the
preceding fiscal year, all in reasonable detail and accompanied by a report
thereon of a firm of independent public accountants of recognized national
standing selected by the Company to the effect that the consolidated financial
statements present fairly, in all material respects, the consolidated financial
position of the Company and its Restricted Subsidiaries as of the end of the
fiscal year being reported on and the consolidated results of the operations and
cash flows for said year in conformity with GAAP and that the examination such
accountants in connection with such financial statements has been conducted in
accordance with generally accepted auditing standards and included such tests of
the accounting records and such other auditing procedures as said accountants
deemed necessary in the circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the books of
the Company or any Restricted Subsidiary and any management letter received from
such accountants;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by the Company to stockholders generally and of each regular or
periodic report, and any registration statement or prospectus filed by the
Company or any Subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency, and copies of any orders in any
proceedings to which the Company or any of its Subsidiaries is a party, issued
by any governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (i) a Reportable Event with respect to any Plan; (ii) the
institution of any steps by the Company, any ERISA Affiliate, the PBGC or any
other person to terminate any Plan; (iii) the institution of any steps by the
Company or any ERISA Affiliate to withdraw from any Plan; (iv) a non-exempt
"prohibited transaction" within the meaning of Section 406 of ERISA in
connection with any Plan; (v) any material increase in the contingent liability
of the Company or any Restricted Subsidiary with respect to any post-retirement
welfare liability; or (vi) the taking of any action by, or the threatening of
the taking of any action by, the Internal Revenue Service, the Department of
Labor or the PBGC with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial officer
of the Company stating that such officer has reviewed the provisions of this
Agreement and setting forth: (i) the information and computations (in sufficient
detail) required in order to establish whether the Company was in compliance
with the requirements of Section 5.6 through Section 5.15 at the end of the
period covered by the financial statements then being furnished, and (ii)
whether there existed as of the date of such financial statements and whether,
to the best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such financial
statements any Default or Event of Default and, if any such condition or event
exists on the date of the certificate, specifying the nature and period of
existence thereof and the action the Company is taking and proposes to take with
respect thereto;
(g) Accountant's Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an opinion with
respect to such financial statements, stating that they have reviewed this
Agreement and stating further whether, in making their audit, such accountants
have become aware of any Default or Event of Default under any of the terms
or provisions of this Agreement insofar as any such terms or provisions pertain
to or involve accounting matters or determinations, and if any such condition or
event then exists, specifying the nature and period of existence thereof;
(h) Unrestricted Subsidiaries. Within the respective periods
provided in paragraphs (a) and (b) above, financial statements of the character
and for the dates and periods as in said paragraphs (a) and (b) provided
covering each Unrestricted Subsidiary (or groups of Unrestricted Subsidiaries on
a consolidated basis); and
(i) Requested Information. With reasonable promptness, such
other data and information as you or any such Institutional Holder may
reasonably request.
Without limiting the foregoing, the Company will permit you, so long as you are
the holder of any Note, and each Institutional Holder of the then outstanding
Notes (or such Persons as either you or such Institutional Holder may
designate), to visit and inspect, under the Company's guidance, any of the
properties of the Company or any Restricted Subsidiary, to examine all of their
books of account, records, reports and other papers, to make copies and extracts
therefrom and to discuss their respective affairs, finances and accounts with
their respective officers, employees, and independent public accountants (and by
this provision the Company authorizes said accountants to discuss with you the
finances and affairs of the Company and its Restricted Subsidiaries) all at such
reasonable times and as often as may be reasonably requested, but, in aggregate,
not more than four times in a calendar year; provided that prior to the
occurrence of an alleged Event of Default, the Company shall have received
reasonable notice of such visit.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
6.1. Events of Default. Anyone or more of the following shall
constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for more
than five days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in Section 2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or premium, if any, thereon at the expressed or any
accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of the
principal of or interest on any Funded Debt or Current Debt (other than the
Notes) of the Company or any Restricted Subsidiary and such default shall
continue beyond the period of grace, if any, allowed with respect thereto; or
(e) Default or the happening of any event shall occur under
any indenture, agreement or other instrument under which any Funded Debt or
Current Debt of the Company or any Restricted Subsidiary may be issued and such
default or event shall continue for a period of time sufficient to permit the
acceleration of the maturity of any Funded Debt or Current Debt of the Company
or any Restricted Subsidiary outstanding thereunder; or
(f) Default shall occur in the observance or performance of
any covenant or
agreement contained in Section 5.6 through Section 5.11; or
(g) Default shall occur in the observance or performance of
any covenant or agreement contained in Sections 7.3 through 7.8, both inclusive,
or Section 7.10 or Section 8 of the Guaranty; or
(h) Default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied within 30 days after
the earlier of (i) the day on which the Company first obtains knowledge of such
default, or (ii) the day on which written notice thereof is given to the Company
by the holder of any Note; or
(i) Default shall occur in the observance or performance of
any other provision of the Guaranty which is not remedied within 30 days after
the earlier of (i) the day on which the Guarantor first obtains knowledge of
such default or (ii) the day on which written notice thereof is given to the
Guarantor by the holder of any Note; or
(j) Any representation or warranty made by the Company herein,
or made by the Company in any statement or certificate furnished by the Company
in connection with the consummation of the issuance and delivery of the Notes or
furnished by the Company pursuant hereto, is untrue in any material respect as
of the date of the issuance or making thereof; or
(k) Any representation or warranty made by the Guarantor in
the Guaranty, or made by the Guarantor in any statement or certificate furnished
by the Guarantor pursuant thereto or hereto, is untrue in any material respect
as of the date of the issuance or making thereof; or
(l) The Guaranty shall cease to be in full force and effect
for any reason whatsoever, including without limitation, a determination by any
governmental body or court that the Guaranty is invalid, void or unenforceable
or the Guarantor shall contest or deny in writing the validity or enforceability
of any of its obligations under the Guaranty; or
(m) Final judgment or judgments for the payment of money
aggregating in excess of $100,000 is or are outstanding against the Guarantor,
the Company or any Restricted Subsidiary or against any property or assets of
either and any one of such judgments has remained unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period of 60 days from the date of its
entry; or
(n) A custodian, liquidator, trustee or receiver is appointed
for the Guarantor, the Company or any Restricted Subsidiary or for the major
part of the property of either and is not discharged within 60 days after such
appointment; or
(o) The Guarantor, the Company or any Restricted Subsidiary
becomes insolvent or bankrupt, is generally not paying its debts as they become
due or makes an assignment for the benefit of creditors, or the Guarantor, the
Company or any Restricted Subsidiary applies for or consents to the appointment
of a custodian, liquidator, trustee or receiver for the Guarantor, the Company
or such Restricted Subsidiary or for the major part of the property of any such
Person; or
(p) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or similar law
or laws for the relief of debtors, are instituted by or against the Guarantor,
the Company or any Restricted Subsidiary and, if instituted
against the Guarantor, the Company or any Restricted Subsidiary, are consented
to or are not dismissed within 60 days after such institution.
6.2. Notice to Holders. When any Event of Default described in
the foregoing Section 6.1 has occurred, or if the holder of any Note or of any
other evidence of Funded Debt or Current Debt of the Company gives any notice or
takes any other action with respect to a claimed default, the Company agrees to
give notice within three business days of such event to all holders of the Notes
then outstanding.
6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of Section 6.1 has happened and is
continuing, any holder of any Note may, and when any Event of Default described
in paragraphs (d) through (n), inclusive, of said Section 6.1 has happened and
is continuing, the holder or holders of 2596 or more of the principal amount of
Notes at the time outstanding may, by notice to the Company, declare the entire
principal and all interest accrued on all Notes to be, and all Notes shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in paragraph (o) or (p) of Section 6.1 has
occurred, then all outstanding Notes shall immediately become due and payable
without presentment, demand or notice of any kind. Upon the Notes becoming due
and payable as a result of any Event of Default as aforesaid, the Company will
forthwith pay to the holders of the Notes the entire principal and interest
accrued on the Notes and, to the extent not prohibited by applicable law, an
amount as liquidated damages for the loss of the bargain evidenced hereby (and
not as a penalty) equal to the Make-Whole Amount, determined as of the date on
which the Notes shall so become due and payable. No course of dealing on the
part of the holder or holders of any Notes nor any delay or failure on the part
of any holder of Notes to exercise any right shall operate as a waiver of such
right or otherwise prejudice such holder's rights, powers and remedies. The
Company further agrees, to the extent permitted by law, to pay to the holder or
holders of the Notes all costs and expenses incurred by them in the collection
of any Notes upon any default hereunder or thereon, including reasonable
compensation to such holder's or holders' attorneys for all services rendered in
connection therewith.
6.4. Rescission of Acceleration. The provisions of Section 6.3
are subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default described in paragraphs (a)
through (n), inclusive, of Section 6.1, the holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument filed
with the Company, rescind and annul such declaration and the consequences
thereof, provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under Section 6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to Section 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any
subsequent Default or Event of Default or impair any right consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 66-2/3% in aggregate principal
amount of outstanding Notes; provided that without the written consent of the
holders of all of the Notes then outstanding, no such amendment or waiver shall
be effective which will change (i) the time of payment (including any prepayment
required by Section 2.1) of the principal of or the interest on any Note or
change the principal amount thereof or change the rate of interest thereon, or
(ii) any of the provisions with respect to optional prepayments, or (iii) the
percentage of holders of the Notes required to consent to any such amendment or
waiver of any of the provisions of this Section 7 or Section 6.
7.2. Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each holder of Notes (irrespective of the amount
of Notes then owned by it) shall be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. The Company will not, directly or indirectly, payor cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any holder of Notes as consideration for or as an
inducement to entering into by any holder of Notes of any waiver or amendment of
any of the terms and provisions of this Agreement or the Notes unless such
remuneration is concurrently offered, on the same terms, ratably to the holders
of all Notes then outstanding.
7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
" Affiliate" shall mean any Person (other than a Restricted
Subsidiary) (i) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company,
(ii) which beneficially owns or holds 5% or more of any class of the Voting
Stock of the Company or (iii) 5% or more of the Voting Stock (or in the case of
a Person which is not a corporation, 5% or more of the equity interest) of which
is beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect
to which is required to be capitalized on a consolidated balance sheet of the
lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date
of any determination thereof the amount at which the aggregate Rentals due and
to become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Company" shall mean Barnstable Water Company, a Massachusetts
corporation, and any Person who succeeds to all, or substantially all, of the
assets and business of Barnstable Water Company.
"Consolidated Current Debt" shall mean all Current Debt of the
Company and its Restricted Subsidiaries, determined on a consolidated basis
eliminating intercompany items.
"Consolidated Funded Debt" shall mean all Funded Debt of the
Company and its Restricted Subsidiaries, determined on a consolidated basis
eliminating intercompany items.
"Consolidated Net Income" for any period shall mean the gross
revenues of the Company and its Restricted Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined on a
consolidated basis after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded gains and
any tax deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted subsidiary), substantially all the assets of which have been acquired
in any manner by the Company or any Restricted Subsidiary, realized by such
corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted Subsidiary shall
have consolidated or which shall have merged into or with the Company or a
Restricted Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been received by
the Company or such Restricted Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends to the
Company or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
the Company or any Restricted Subsidiary; and
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been made from
income arising during such period.
"Consolidated Net Tangible Assets" shall mean as of the date
of any determination thereof the total amount of all Tangible Assets of the
Company and its Restricted Subsidiaries after deducting therefrom all Restricted
Investments and all items which in accordance with GAAP would be included on the
liability and equity side of a consolidated balance sheet, except deferred
income taxes, deferred investment tax credits capital stock of any class,
surplus and Consolidated Funded Debt.
"Consolidated Tangible Net Worth" shall mean as of the date
of any determination thereof Consolidated Net Tangible Assets less all
outstanding Funded Debt, deferred income taxes and deferred investment tax
credits of the Company and its Restricted Subsidiaries.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (i) all Indebtedness of such Person for borrowed money
other than Funded Debt of such Person and (ii) Guaranties by such Person of
Current Debt of others.
"Default" shall mean any event or condition the occurrence of
which would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
Successor sections.
"ERISA Affiliate" shall mean any corporation, trade or
business that is, along with the Company, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
section 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in Section
6.1.
"Fired Charges" for any period shall mean on a consolidated
basis the sum of (i) all Rentals (other than Rentals on Capitalized Leases)
payable during such period by the Company and its Restricted Subsidiaries and
(ii) all interest and all amortization of debt discount and expense on all
Indebtedness (including the interest component of Rentals on Capitalized Leases)
of the Company and its Restricted Subsidiaries. Computations of Fixed Charges on
a pro forma basis for Indebtedness having a variable interest rate shall be
calculated at the rate in effect on the date of any determination.
"Funded Debt" of any Person shall mean (i) all Indebtedness of
such Person for borrowed money or which has been incurred in connection with the
acquisition of assets in each case having a final maturity of one or more than
one year from the date of origin thereof (or which is renewable or extendible at
the sole option of the obligor for a period or periods more than one year from
the date of origin), including all payments in respect thereof that are required
to be made within one year from the date of any determination of Funded Debt,
whether or not the obligation to make such payments shall constitute a current
liability of the obligor under GAAP, (ii) all Capitalized Rentals of such
Person, and (iii) all Guaranties by such Person of Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles at
the time.
"Guaranties" by any Person shall mean all obligations (other
than endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through an agreement,
contingent or otherwise, by such Person: (i) to purchase such Indebtedness or
obligation or any property or assets constituting security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment of such
Indebtedness or obligation, (iii) to lease property or to purchase Securities or
other property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or (iv) otherwise to assure the owner
of the Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Guarantor" shall mean Barnstable Holding Co., Inc., a
Delaware corporation of which the Company is a subsidiary and any Person who
succeeds to all or substantially all, of the assets and business of Barnstable
Holding Co., Inc.
"Guaranty" shall mean the Guaranty Agreement described in
Section 1.3 hereof, as the same may from time to time be amended or modified.
"Indebtedness" of any Person shall mean and include all
obligations of such Person which in accordance with GAAP shall be classified
upon a balance sheet of such Person as liabilities of such Person, and in any
event shall include all (i) obligations of such Person for borrowed money or
which has been incurred in connection with the acquisition of property or
assets, (ii) obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of property, (iv) Capitalized Rentals and (v)
Guaranties of obligations of others of the character referred to in this
definition.
"Institutional Holder" shall mean any "qualified institutional
buyer," as defined
in Rule 144A promulgated under the Securities Exchange Act of 1934, as said Rule
may from time to time be amended.
"Investments" shall mean all investments, in cash or by
delivery of property made, directly or indirectly in any Person, whether by
acquisition of shares of capital stock, indebtedness or other obligations or
Securities or by loan, advance, capital contribution or otherwise; provided,
however, that "Investments" shall not mean or include routine investments in
property to be used or consumed in the ordinary course of business or demand
deposits in bank accounts maintained in the ordinary course of business.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
(including, with respect to stock, stockholder agreements, voting trust
agreements, buyback agreements and all similar arrangements) affecting property.
For the purposes of this Agreement, the Company or a Restricted Subsidiary shall
be deemed to be the owner of any property which it has acquired or holds subject
to a conditional sale agreement, Capitalized Lease or other arrangement pursuant
to which title to the property has been retained by or vested in some other
Person for security purposes and such retention or vesting shall constitute a
Lien.
"Make-Whole Amount" shall mean in connection with any
prepayment or acceleration of the Notes the excess, if any, of (i) the aggregate
present value as of the date of such prepayment of each dollar of principal
being prepaid (taking into account the application of such prepayment required
by Section 2.1) and the amount of interest (exclusive of interest accrued to the
date of prepayment) that would have been payable in respect of such dollar if
such prepayment had not been made, determined by discounting such amounts at the
Reinvestment Rate from the respective dates on which they would have been
payable, over (ii) 100% of the principal amount of the outstanding Notes being
prepaid. If the Reinvestment Rate is equal to or higher than 10.2%, the
Make-Whole Amount shall be zero. For purposes of any determination of the Make
Whole Amount;
"Reinvestment Rate" shall mean the arithmetic mean of the
yields under the respective headings "This Week" and "Last Week" published in
the Statistical Release under the caption "Treasury Constant Maturities" for the
maturity (rounded to the nearest month) corresponding to the Weighted Average
Life to Maturity of the principal being prepaid (taking into account the
application of such prepayment required by 52.1). If no maturity exactly
corresponds to such Weighted Average Life to Maturity, yields for the two
published maturities most closely corresponding to such Weighted Average Life to
Maturity shall be calculated pursuant to the immediately preceding sentence and
the Reinvestment Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding in each of such relevant periods to the nearest
month. For the purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any successor which is
published weekly by the Federal Reserve System and which establishes yields on
actively traded U.S. Government Securities
adjusted to constant maturities or, if such statistical release is not published
at the time of any determination hereunder, then such other reasonably
comparable index which shall be designated by the holders of 66-2/396 in
aggregate principal amount of the outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount
of the Notes being prepaid shall mean, as of the time of any determination
thereof, the number of years obtained by dividing the then Remaining
Dollar-Years of such principal by the aggregate amount of such principal. The
term "Remaining Dollar-Years" of such principal shall mean the amount obtained
by (i) multiplying (x) the remainder of (1) the amount of principal that would
have become due on each scheduled payment date if such prepayment had not been
made, less (2) the amount of principal on the Notes scheduled to become due on
such date after giving effect to such prepayment and the application thereof in
accordance with the provisions of Section 2.1, by (y) the number of years
(calculated to the nearest one-twelfth) which will elapse between the date of
determination and such scheduled payment date, and (ii) totalling the products
obtained in (i).
"Minority Interests" shall mean any shares of stock of any
class of a Restricted Subsidiary (other than directors' qualifying shares as
required by law) that are not owned by the Company and/or one or more of its
Restricted Subsidiaries. Minority Interests shall be valued by valuing Minority
Interests constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect any changes from
the book value of such common stock required by the foregoing method of valuing
Minority Interests in preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Income Available for Fixed Charges" for any period shall
mean the sum of (i) Consolidated Net Income during such period plus (to the
extent deducted in determining Consolidated Net Income), (ii) all provisions for
any Federal, state or other income taxes made by the Company and its Restricted
Subsidiaries during such period and (iii) Fixed Charges of the Company and its
Restricted Subsidiaries during such period.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" means a "pension plan," as such term is defined in
ERISA, established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or otherwise
may have any liability.
"Pro Forma Fixed Charges" for any period shall mean, as of the
date of any determination thereof, the maximum aggregate amount of Fixed Charges
which would have become payable by the Company and its Restricted Subsidiaries
in such period determined on a pro forma basis giving effect as of the beginning
of such period to the incurrence of any Funded Debt (including Capitalized
Rentals) and the concurrent retirement of outstanding Funded Debt or Current
Debt or termination of any Capitalized Leases.
"Purchaser" shall have the meaning set forth in Section 1.1.
"Rentals" shall mean and include as of the date of any
determination thereof all fixed payments (including as such all payments which
the lessee is obligated to make to the lessor on termination of the lease or
surrender of the property) payable by the Company or a Restricted Subsidiary, as
lessee or sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a Restricted
Subsidiary (whether or not designated as rents or additional rents) on account
of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Investments" shall mean all Investments, other
than Investments described in clauses (a) through (g) of Section 5.10.
"Restricted Subsidiary" shall mean any Subsidiary (i) which
is organized under the laws of the United States or any State thereof; (ii)
which conducts substantially all of its business and has substantially all of
its assets within the United States; and (iii) of which more than 8096 (by
number of votes) of the Voting Stock is beneficially owned, directly or
indirectly, by the Company.
"Security" shall have the same meaning as in Section 2(1) of
the Securities Act of 1933, as amended.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 5096 (by number of votes) of the
Voting Stock shall be beneficially owned, directly or indirectly, by such parent
corporation. The term "Subsidiary" shall mean a subsidiary of the Company.
"Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all assets of the Company and its
Restricted Subsidiaries (less depreciation, depletion and other properly
deductible valuation reserves) after deducting good will, patents, trade names,
trade marks, copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, deferred assets other than prepaid
insurance and prepaid taxes, the excess of cost of shares acquired over book
value of related assets and such other assets as are properly classified as
"intangible assets" in accordance with GAAP.
"Total Capitalization" shall mean, at any date of
determination thereof, the sum of (i) the aggregate principal amount of all
Consolidated Funded Debt then outstanding plus (ii) Consolidated Tangible Net
Worth as of such date.
"Unrestricted Subsidiary" shall mean any Subsidiary which is
not a Restricted Subsidiary.
"Voting Stock" shall mean Securities of any class or classes,
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary
shall mean a Subsidiary of which all of the issued and outstanding shares of
stock (except shares required as directors' qualifying shares) and all Funded
Debt and Current Debt shall be owned by the
Company and/or one or more of its Wholly-owned Subsidiaries.
8.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, the same shall be done in accordance with GAAP,
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
9.1. Registered Notes. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the Notes
(hereinafter called the "Note Register"), and the Company will register or
transfer or cause to be registered or transferred, as hereinafter provided and
under such reasonable regulations as it may prescribe, any Note issued pursuant
to this Agreement.
At any time and from time to time the registered holder of any
Note which has been duly registered as hereinabove provided may transfer such
Note upon surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be
registered shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement. Payment of or on account of the principal, premium,
if any, and interest on any registered Note shall be made to or upon the written
order of such registered holder.
9.2. Exchange of Notes. At any time and from time to time,
upon not less than ten days' notice to that effect given by the holder of any
Note initially delivered or of any Note substituted therefor pursuant to Section
9.1, this Section 9.2 or Section 9.3, and, upon surrender of such Note at its
office, the Company will deliver in exchange therefor, without expense to such
holder, except as set forth below, a Note for the same aggregate principal
amount as the then unpaid principal amount of the Note so surrendered, or Notes
in the denomination of $100,000 or any amount in excess thereof as such holder
shall specify, dated as of the date to which interest has been paid on the Note
so surrendered or, if such surrender is prior to the payment of any interest
thereon, then dated as of the date of issue, registered in the name of such
Person or Persons as may be designated by such holder, and otherwise of the same
form and tenor as the Notes so surrendered for exchange. The Company may require
the payment of a sum sufficient to cover any stamp tax or governmental charge
imposed upon such exchange or transfer.
9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent Institutional Holder is the
owner of any such lost, stolen or
destroyed Note, then the affidavit of an authorized officer of such owner,
setting forth the fact of loss, theft or destruction and of its ownership of
such Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to the reasonable charges and disbursements of
Chapman and Cutler, your special counsel, duplicating and printing costs and
charges for shipping the Notes, adequately insured to you at your home office or
at such other place as you may designate, and all such expenses relating to any
amendment, waivers or consents pursuant to the provisions hereof, including,
without limitation, any amendments, waivers, or consents resulting from any
work-out, re-negotiation or restructuring relating to the performance by the
Company of its obligations under this Agreement and the Notes. The Company also
agrees that it will pay and save you harmless against any and all liability with
respect to stamp and other taxes, if any, which may be payable or which may be
determined to be payable in connection with the execution and delivery of this
Agreement or the Notes, whether or not any Notes are then outstanding. The
Company agrees to protect and indemnify you against any liability for any and
all brokerage fees and commissions payable or claimed to be payable to any
Person in connection with the transactions contemplated by this Agreement.
9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
9.6. Notices. All communications provided for hereunder shall
be in writing and, if to you, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication, in each
case addressed to you at your address appearing on Schedule I to this Agreement
or such other address as you or the subsequent holder of any Note initially
issued to you may designate to the Company in writing, and if to the Company,
delivered or mailed by registered or certified mail or overnight air courier, or
by facsimile communication, to the Company at 47 Old Yarmouth Road, Hyannis,
Massachusetts 02601-0326, Attention: President or to such other address as the
Company may in writing designate to you or to a subsequent holder of the Note
initially issued to you; provided, however, that a notice to you by overnight
air courier shall only be effective if delivered to you at a street address
designated for such purpose in Schedule I, and a notice to you by facsimile
communication shall only be effective if made by confirmed transmission to you
at a telephone number designated for such purpose in Schedule I, or, in either
case, as you or a subsequent holder of any Note initially issued to you may
designate to the Company in writing.
9.7. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to your benefit
and to the benefit of your successors and assigns, including each successive
holder or holders of any Notes.
9.8. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant
hereto, whether or not in connection with the Closing Date, shall survive the
closing and the delivery of this Agreement and the Notes.
9.9. Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect the
validity or enforceability of any remaining portion, which remaining portion
shall remain in force and effect as if this Agreement had been executed with the
invalid or unenforceable portion thereof eliminated and it is hereby declared
the intention of the parties hereto that they would have executed the remaining
portion of this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid or
unenforceable.
9.10. Governing Law. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with
Massachusetts law.
9.11. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this Agreement
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
Accepted as of February 15, 1991.
BARNSTABLE WATER COMPANY
By: /s/ George D. Wadsworth
-----------------------------------
George D. Wadsworth, President
INDIANAPOLIS LIFE INSURANCE COMPANY
By: Its Vice President, Securities and Treasurer
SCHEDULE I
Name and Address Principal Amount of
of Purchasers Notes to be Purchased
INDIANAPOLIS LIFE INSURANCE $2,000,000
COMPANY
2960 North Meridian Street
Indianapolis, Indiana 46208
Attention: Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "Barnstable Water Company, 10.2% Senior Notes due February
15, 2011, principal or interest") to:
INB National Bank
One Indiana Square
Indianapolis, Indiana 46266
for credit to Indianapolis Life Insurance
Company's Account No. 35-001-852
Notices
All notices and communications to be addressed as first provided above,
except notice with respect to payment, and written confirmation of each
such payment, to be addressed to:
Indianapolis Life Insurance Company
P.O. Box 1230
Indianapolis, Indiana 46206
Attention: Securities Department
Name of Nominee in which Notes are to be issued: None
SCHEDULE II
LIENS SECURING FUNDED DEBT
(INCLUDING CAPITALIZED LEASES)
as of September 30, 1990
NONE
BARNSTABLE WATER COMPANY
10.2% Senior Note
Due February 15, 2011
BARNSTABLE WATER COMPANY, a Massachusetts corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of February, 2011
the principal amount of
DOLLARS ($)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 10.2% per annum from the date hereof until maturity, payable
semiannually on the fifteenth of each February and August in each year
(commencing on the first of such dates after the date hereof) and at maturity.
The Company agrees to pay interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest, at the rate
of 12.2% per annum after the due date, whether by acceleration or otherwise,
until paid. Both the principal hereof and interest hereon are payable at the
principal office of the Company in Hyannis, Massachusetts in coin or currency of
the United States of America which at the time of payment shall be legal tender
for the payment of public and private debts.
This Note is one of the 10.2% Senior Notes due February
15, 2011 (the "Notes") of the Company in the aggregate principal amount of
$2,000,000 issued or to be issued under and pursuant to the terms and provisions
of the Note Agreement dated as of February 15, 1991 (the "Note Agreement"),
entered into by the Company with the original Purchaser therein referred to and
this Note and the holder hereof are entitled equally and ratably with the
holders of all other Notes outstanding under the Note Agreement to all the
benefits provided for thereby or referred to therein. Reference is hereby made
to the Note Agreement for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note
Agreement may be declared due prior to their expressed maturity dates and
certain prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.
EXHIBIT A
(to Note Agreement)
The Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if any, set forth
in the Note Agreement.
Pursuant to a Guaranty Agreement dated as of February 15, 1991
(the "Guaranty") from Barnstable Holding Co., Inc. (the "Guarantor"), payment of
the principal of, and interest and premium on, the Notes has been guaranteed by
the Guarantor.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest on
this Note shall be made only to or upon the order in writing of the registered
holder.
BARNSTABLE WATER COMPANY
By George D. Wadsworth, President
------------------------------
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. The Company has no Subsidiaries.
2. Corporate Organization and Authority. The Company:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry on
its business as now conducted and as presently proposed to be
conducted; and
(c) does not transact business or own or lease property in any
state other than The Commonwealth of Massachusetts so as to require the
Company to be qualified or licensed as a foreign corporation in any
jurisdiction.
3. Business and Property. You have heretofore been furnished
with a copy of the Massachusetts Department of Public Utilities (the
"Department") Report dated December 31, 1989 (the "Report") prepared by the
Company which generally sets forth the business conducted and proposed to be
conducted by the Company and the principal properties of the Company.
4. Financial Statements. (a) The balance sheets of the Company
as of December 31 in each of the years 1985 to 1989, both inclusive, and the
statements of income and retained earnings and changes in financial position or
cash flows for the fiscal years ended on said dates, each accompanied by a
report thereon containing an opinion unqualified as to scope limitations imposed
by the Company and otherwise without qualification except as therein noted, by
Ernst & Young, have been prepared in accordance with GAAP consistently applied
except as therein noted, are correct and complete and present fairly the
financial position of the Company as of such dates and the results of its
operations and changes in its financial position or cash flows for such periods.
The unaudited balance sheets of the Company as of September 30, 1990, and the
unaudited statements of income and retained earnings and cash flows for the nine
month period ended on said date prepared by the Company have been prepared in
accordance with Department accounting practices consistently applied, are
correct and complete and present fairly the financial position of the Company as
of said date and the results of its operations and changes in its financial
position or cash flows for such period.
(b) Since December 31, 1989, there has been no change in the
condition, financial or otherwise, of the Company as shown on the balance sheet
as of such date except changes in the ordinary course of business, none of which
individually or in the aggregate has been materially adverse.
EXHIBIT C
(to Note Agreement)
5. Indebtedness. Annex 1 attached hereto correctly describes
all Current Debt, Funded Debt, Capitalized Leases and Long-Term Leases of the
Company outstanding on February 28, 1991.
6. Full Disclosure. Neither the financial statements referred
to in paragraph 4 hereof nor the Agreement, the Report or any other written
statement furnished by the Company to you in connection with the negotiation of
the sale of the Notes, contains any untrue statement of a material fact or omits
a material fact necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Company which the Company has not
disclosed to you in writing which materially affects adversely nor, so far as
the Company can now foresee, will materially affect adversely the properties,
business, prospects, profits or condition (financial or otherwise) of the
Company.
7. Pending Litigation. Except as disclosed in Annex 2 attached
hereto, there are no proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company in any court or before any
governmental authority or arbitration board or tribunal which involve the
possibility of materially and adversely affecting the properties, business,
prospects, profits or condition (financial or otherwise) of the Company.
8. Title to Properties. The Company has good and marketable
title in fee simple (or its equivalent under applicable law) to all material
parcels of real property and has good title to all the other material items of
property it purports to own, including that reflected in the most recent balance
sheet referred to in paragraph 4 hereof, except as sold or otherwise disposed of
in the ordinary course of business and except for Liens permitted by the
Agreement.
9. Patents and Trademarks. The Company owns or possesses all
the patents, trademarks, trade names, service marks, copyright, licenses and
rights with respect to the foregoing necessary for the present and planned
future conduct of its business, without any known conflict with the rights of
others.
10. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreement and the
Notes
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under the Charter or By-laws of the Company or any
indenture or other agreement or instrument to which the Company is a party or by
which it may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company; and
(c) have been duly authorized by proper corporate action on
the part of the Company (no action by the stockholders of the Company being
required by law, by the Charter or By-laws of the Company or otherwise),
executed and delivered by the Company and the Agreement and the Notes constitute
the legal, valid and binding obligations, contracts and agreements of the
Company enforceable in accordance with their respective terms.
11. No Defaults. No Default or Event of Default has occurred
and is continuing. The Company is not in default in the payment of principal or
interest on any Funded Debt or Current Debt and is not in default under any
instrument or instruments or agreements under and subject to which any Funded
Debt or Current Debt has been issued and no event has occurred and is continuing
under the provisions of any such instrument or agreement which with the lapse of
time or the giving of notice, or both, would constitute an event of default
thereunder.
12. Governmental Consent. Except for the approval of the
Department, which approval has been obtained and is in full force and effect, no
approval, consent or withholding of objection on the part of any regulatory
body, state, Federal or local, is necessary in connection with the execution and
delivery by the Company of the Agreement or the Notes or compliance by the
Company with any of the provisions of the Agreement or the Notes. The period for
the appeal of the order of the Department has been exhausted and no appeals have
been made in such period. Such order contains no burdensome restrictions on the
Company and authorizes the issue and sale of the Notes upon terms not
inconsistent with the Agreement.
13. Taxes. All tax returns required to be filed by the Company
in any jurisdiction have, in fact, been filed, and all taxes, assessments, fees
and other governmental charges upon the Company or upon any of its properties,
income or franchises, which are shown to be due and payable in such returns have
been paid. For all taxable years ending on or before December 31, 1986, the
Federal income tax liability of the Company has been satisfied and either the
period of limitations on assessment of additional Federal income tax has expired
or the Company has entered into an agreement with the Internal Revenue Service
closing conclusively the total tax liability for the taxable year. The Company
does not know of any proposed additional tax assessment against it for which
adequate provision has not been made on its accounts, and no material
controversy in respect of additional Federal or state income taxes due since
said date is pending or to the knowledge of the Company threatened. The
provisions for taxes on the stocks of the Company are adequate for all open
years, and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the
Notes will be used to repay bank borrowings and for other corporate purposes.
None of the transactions contemplated in the Agreement (including, without
limitation thereof, the use of proceeds from the issuance of the Notes) will
violate or result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto, including, without
limitation, Regulations G, T and X of the Board of Governors of the Federal
Reserve System, 12 C.F .R., Chapter II. The Company does not own or intend to
carry or purchase any "margin stock" within the meaning of said Regulation G.
None of the proceeds from the sale of the Notes will be used to purchase, or
refinance any borrowing the proceeds of which were used to purchase, any
"security" within the meaning of the Securities Exchange Act of 1934, as
amended.
15. Private Offering. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer the Notes or
any similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from or has otherwise approached or negotiated or
will approach or negotiate in respect of the Notes or any similar Security with
any Person other than the Purchaser and not more than one other institutional
investor, which was offered a portion of the Notes at private sale for
investment. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered 0: will offer the Notes or
any similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from any Person so as to bring the issuance and
sale of the Notes within the provisions of Section 5 of the Securities Act of
1933, as amended.
16. ERISA. The consummation of the transactions provided for
in the Agreement and compliance by the Company with the provisions thereof and
the Notes issued thereunder will not involve any prohibited transaction within
the meaning of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended. Each plan complies in all material respects with all applicable
statutes and governmental rules and regulations, and (a) no Reportable Event has
occurred and is continuing with respect to any Plan, (b) neither the Company nor
any ERISA Affiliate has withdrawn from any Plan or Multiemployer Plan or
instituted steps to do so, and (c) no steps have been instituted to terminate
any Plan. No condition exists or event or transaction has occurred in connection
with any Plan which could result in the incurrence by the Company or any ERISA
Affiliate of any material liability, fine or penalty. No Plan maintained by the
Company or any ERISA Affiliate, nor any trust created thereunder, has incurred
any "accumulated funding deficiency" as defined in Section 302 of ERISA. Neither
the Company nor any ERISA Affiliate has any contingent liability with respect to
any post-retirement "welfare benefit plan" (as such term is defined in ERISA)
except as has been disclosed to the Purchaser.
17. Compliance with Law. The Company (a} is not in violation
of any law, ordinance, franchise, governmental rule or regulation to which it is
subject; or (b) has not failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure to obtain would materially
adversely affect the business, prospects, profits, properties or condition
(financial or otherwise) of the Company, or impair the ability of the Company to
perform its obligations contained in the Agreement or the Notes. The Company is
not in default with respect to any order of any court or governmental authority
or arbitration board or tribunal.
18. Compliance with Environmental Laws. Except as disclosed in
Annex 2 attached hereto, the Company is not in violation of any applicable
Federal, state, or local laws, statutes, rules, regulations or ordinances
relating to public health, safety or the environment, including, without
limitation, relating to releases, discharges, emissions or disposals to air,
water, land or ground water, to the withdrawal or use of ground water, to the
use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure to
toxic, hazardous or other controlled, prohibited or regulated substances which
violation could have a material adverse effect on the business, prospects,
profits, properties or condition (financial or otherwise) of the Company. The
Company does not know of any liability or class of liability of the Company
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et
seq.).
19. Franchises and Permits. The Company holds valid and
subsisting certificates of convenience and necessity, grants, franchises,
licenses, permits, consents, orders of governmental and regulatory authorities
and easements, free from unduly burdensome restrictions, required for the
maintenance and operation of its properties and business in the territories now
served by it and they enable it to carry on the business now being conducted by
it.
20. Investment Company Act. The Company is not, and is not
directly or indirectly controlled by or acting on behalf of any person which is,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Company outstanding on February 28, 1991 is as
follows:
Notes Payable-Banks $485,000
2. Funded Debt (other than Capitalized Rentals) of the Company outstanding
on February 28, 1991 is as follows:
(a) Notes, bonds and other securities:
Notes Payable -Insurance Company $265,900
(b) Guaranteed Obligations
NONE
3. Capitalized Leases of the Company outstanding on February 28, 1991 are
as follows:
NONE
ANNEX 1
(to Exhibit C)
REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants to you as follows:
1. Subsidiaries. Annex 1 attached hereto states the name of each
of the Guarantor's subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Guarantor or its subsidiaries. The
Guarantor and each subsidiary has good and marketable title to all of the shares
it purports to own of the stock of each subsidiary, free and clear in each case
of any Lien. All such shares have been duly issued and are fully paid and
non-assessable.
2. Corporate Organization and Authority. The Guarantor and each
significant Subsidiary:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry on
its business as now conducted and as presently proposed to be conducted;
and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or leased
by it makes such licensing or qualification necessary.
3. Financial Statements. The unaudited balance sheets of the
Guarantor, which was incorporated on November 14, 1990, and its significant
Subsidiaries have not been prepared.
4. Indebtedness. Annex 2 attached hereto correctly describes all
Current Debt, Funded Debt and Capitalized Leases of the Guarantor and its
Significant Subsidiaries outstanding on February 28, 1991.
5. Full Disclosure. Neither the Guaranty nor any other written
statement furnished by the Guarantor to you in connection with the negotiation
of the sale of the Notes contains any untrue statement of a material fact or
omits a material fact necessary to make the statements contained therein or
herein not misleading. There is no fact peculiar to the Guarantor and its
Significant Subsidiaries which the Guarantor has not disclosed to you in writing
which materially affects adversely nor, so far as the Guarantor can now foresee,
will materially affect adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Guarantor or its Significant
Subsidiaries, taken as a whole.
6. Pending Litigation. There are no proceedings pending or, to
the knowledge of the Guarantor, threatened against or affecting the Guarantor or
its Significant Subsidiaries in any court or before any governmental authority
or arbitration board or tribunal which involve the possibility of materially and
adversely affecting the
EXHIBIT D
(to Note Agreement)
properties, business, prospects, profits or condition (financial or otherwise)
of the Guarantor and its Significant Subsidiaries.
7. Title to Properties. The Guarantor and each Significant
Subsidiary has good and marketable title in fee simple (or its equivalent under
applicable law} to all material parcels of real property and has good title to
all the other material items of property it purports to own except as sold or
otherwise disposed of in the ordinary course of business and except for Liens
permitted by the Guaranty.
8. Patents and Trademarks. The Company and each Significant
Subsidiary owns or possesses all the patents, trademarks, trade names, service
marks, copyright, licenses and rights with respect to the foregoing necessary
for the present and planned future conduct of its business, without any known
conflict with the rights of others.
9. Guaranty is Legal and Authorized. Compliance by the Guarantor
with all of the provisions of the Guaranty
(a) is within the corporate powers of the Guarantor;
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict with
or result in any breach of any of the terms, conditions or provisions
of, or constitute a default under the Certificate of Incorporation or
By-laws of the Guarantor or any indenture or other agreement or
instrument to which the Guarantor is a party or by which it may be bound
or result in the imposition of any Liens or encumbrances on any property
of the Guarantor; and
(c) has been duly authorized by proper corporate action on the
part of the Guarantor (no action by the stockholders of the Guarantor
being required by law, by the Certificate of Incorporation or By-laws of
the Guarantor or otherwise), executed and delivered by the Guarantor and
the Guaranty and the Notes constitute the legal, valid and binding
obligations, contracts and agreements of the Guarantor enforceable in
accordance with their respective terms.
10. No Defaults. No Default or Event of Default has occurred and
is continuing. The Guarantor is not in default in the payment of principal or
interest on any Funded Debt or Current Debt and is not in default under any
instrument or instruments or agreements under and subject to which any Funded
Debt or Current Debt has been issued and no event has occurred and is continuing
under the provisions of any such instrument or agreement which with the lapse of
time or the giving of notice, or both, would constitute an event of default
thereunder.
11. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Guarantor of the
Guaranty or compliance by the Guarantor with any of the provisions of the
Guaranty.
12. Taxes. All tax returns required to be filed by the Guarantor
or any Significant Subsidiaries in any jurisdiction have, in fact, been filed,
and all taxes, assessments, fees and other governmental charges upon the
Guarantor or any Significant Subsidiaries or upon any of its properties, income
or franchises, which are shown to be due and payable in such returns have been
paid. The Guarantor does not know of any proposed additional tax assessment
against
it for which adequate provision has not been made on its accounts, and no
material controversy in respect of additional Federal or state income taxes due
since said date is pending or to the knowledge of the Guarantor threatened. The
provisions for taxes on the books of the Guarantor and each Significant
Subsidiary are adequate for all open years, and for its current fiscal period.
13. Compliance with Law. Neither the Guarantor nor any
Significant Subsidiary (a) is in violation of any law, ordinance, franchise,
governmental rule or regulation to which it is subject; or (b) has failed to
obtain any license, permit, franchise or other governmental authorization
necessary to the ownership of its property or to the conduct of its business,
which violation or failure to obtain would materially adversely affect the
business, prospects, profits, properties or condition (financial or otherwise)
of the Guarantor and its Significant Subsidiaries, or impair the ability of the
Guarantor to perform its obligations contained in the Guaranty. Neither the
Guarantor nor any Significant Subsidiary is in default with respect to any order
of any court or governmental authority or arbitration board or tribunal.
14. Compliance with Environmental Laws. The Guarantor is not in
violation of any applicable Federal, state, or local laws, statutes, rules,
regulations or ordinances relating to public health, safety or the environment,
including, without limitation, relating to releases, discharges, emissions or
disposals to air, water, land or ground water, to the withdrawal or use of
ground water, to the use, handling or disposal of polychlorinated biphenyls
(PCB's), asbestos or urea formaldehyde, to the treatment, storage, disposal or
management of hazardous substances (including, without limitation, petroleum,
crude oil or any fraction thereof, or other hydrocarbons), pollutants or
contaminants, to exposure to toxic, hazardous or other controlled, prohibited or
regulated substances which violation could have a material adverse effect on the
business, prospects, profits, properties or condition (financial or otherwise)
of the Guarantor. The Guarantor does not know of any liability or class of
liability of the Guarantor under the comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.), or the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. Section 6901 et seq.).
15. Investment Company Act. The Guarantor is not, and is not
directly or indirectly controlled by or acting on behalf of any person which is,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
16. Holding Company. The Guarantor is not a "holding Company" or
a "subsidiary company" of a "holding company" or an "affiliate" of a "holding
company", or of a "subsidiary company" of a "holding company" as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
SUBSIDIARIES OF THE GUARANTOR
Percentage of Voting
Stock Owned by the
Name of Jurisdiction of Guarantor and each
Subsidiary Incorporation Other Subsidiary
- ---------- ------------- ----------------
Barnstable Water
Company Massachusetts 95.47%
Barlaco Massachusetts 95.47%
ANNEX I
(to Exhibit D)
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Guarantor outstanding on February 28, 1991 is as
follows:
NONE
2. Funded Debt (other than Capitalized Rentals} of the Guarantor outstanding
on February 28, 1991 is as follows:
(a) Notes, bonds and other securities: NONE
(b) Guaranteed Obligations:
Notes payable -Insurance Company $265,900
3. Capitalized Leases of the Guarantor outstanding on February 28, 1991 are
as follows:
NONE
ANNEX 2
(to Exhibit D)
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler, special counsel to the
Purchaser, called for by Section 4.1 of the Agreement, shall be dated the
Closing Date and addressed to the Purchaser, shall be satisfactory in form and
substance to the Purchaser and shall be to the effect that:
(1) The Company is a corporation, duly incorporated, legally existing
and in good standing under the laws of the Commonwealth of Massachusetts, has
corporate power and authority and is duly authorized to enter into and perform
the Agreement and to issue the Notes and incur the Indebtedness to be evidenced
thereby;
(2) The Guarantor is a corporation, duly incorporated, legally existing
and in good standing under the laws of the State of Delaware, has corporate
power and authority and is duly authorized to enter into and perform the
Guaranty;
(3) The Agreement has been duly authorized, executed and delivered by
the Company and constitutes the legal, valid and binding, contract and agreement
of the Company enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law);
(4) The Guaranty has been duly authorized, executed and delivered by the
Guarantor and constitutes the legal, valid and binding contract and agreement of
the Guarantor enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law);
(5) The Notes have been duly authorized by proper corporate action on
the part of the Company, have been duly executed by authorized officers of the
Company and delivered and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law); and
(6) The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Agreement constitute an exempt transaction under the
registration provisions of the Securities Act of 1933, as amended, and do not
under existing law require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture in respect thereof
under the Trust Indenture Act of 1939.
The opinion of Chapman and Cutler shall also state that the opinion
of Hill & Barlow, a Professional Corporation, is satisfactory in scope and form
to Chapman and Cutler and that, in their opinion, the Purchaser is justified in
relying thereon and shall cover such other matters relating to the sale of the
Notes as the Purchaser may reasonably request. With respect to matters of fact
upon which such opinion is based, Chapman and Cutler may rely on appropriate
certificates of public officials and officers of the Company.
EXHIBIT E
(to Note Agreement)
DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY
AND THE GUARANTOR
The closing opinion of Hill & Barlow, a Professional Corporation,
counsel for the Company and the Guarantor, which is called for by Section 4.1(a)
of the Agreement, shall be dated the Closing Date and addressed to the
Purchaser, shall be satisfactory in scope and form to the Purchaser and shall be
to the effect that:
(1) The Company is a corporation, duly incorporated, legally existing
and in good standing under the laws of the Commonwealth of Massachusetts, has
corporate power and authority and is duly authorized to enter into and perform
the Agreement and to issue the Notes and incur the Indebtedness to be evidenced
thereby and has full corporate power and authority to conduct the activities in
which it is now engaged and is duly licensed or qualified and is in good
standing as a foreign corporation in each jurisdiction in which the character of
the properties owned or leased by it or the nature of the business transacted by
it makes such licensing or qualification necessary;
(2) The Company holds valid and subsisting certificates of convenience
and necessity and it has secured such grants, franchises, permits, licenses,
consents and orders of governmental or regulatory authorities required for the
maintenance and operation of its properties and business in the territories now
served by the Company (as such business and territories have been described to
such counsel by the Company) and such as are ordinarily held and obtained by
water companies of comparable size and similarly situated; that such
certificates, franchises, easements, licenses, consents, and orders are free
from any unusual or burdensome restrictions; and they enable the Company to
carryon its business as now being conducted by it in the Commonwealth of
Massachusetts;
(3) The Guarantor is a corporation, duly incorporated, legally existing
and in good standing under the laws of the State of Delaware, has corporate
power and authority and is duly authorized to enter into and perform the
Guaranty and has full corporate power and authority to conduct the activities in
which it is now engaged and is duly licensed or qualified and is in good
standing as a foreign corporation in each jurisdiction in which the character of
the properties owned or leased by it or the nature of the business transacted by
it makes such licensing or qualification necessary;
(4) The Agreement has been duly authorized, executed and delivered by
the Company and constitutes the legal, valid and binding contract and agreement
of the Company enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law);
(5) The Guaranty has been duly authorized, executed and delivered by the
Guarantor and constitutes the legal, valid and binding contract and agreement of
the Guarantor enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law);
EXHIBIT F
(to Note Agreement)
(6) The Notes have been duly authorized by proper corporate action on
the part of the Company, have been duly executed by authorized officers of the
Company and delivered and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law);
(7) Except for the approval of the Massachusetts Department of Public
Utilities, which approval has been obtained and is in full force and effect, no
approval, consent or withholding of objection on the part of, or filing,
registration or qualification with, any governmental body, Federal, state or
local, is necessary in connection with the execution and delivery of the
Agreement or the Notes;
(8) No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any governmental body, Federal,
state or local, is necessary in connection with the execution and delivery of
the Guaranty;
(9) The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Agreement do not conflict with or result in
any breach of any of the provisions of or constitute a default under or result
in the creation or imposition of any Lien upon any of the property of the
Company pursuant to the provisions of the Charter or By-laws of the Company or
any agreement or other instrument known to such counsel to which the Company is
a party or by which the Company may be bound;
(10) The execution, delivery and performance by the Guarantor of the
Guaranty does not conflict with or result in any breach of any of the provisions
of or constitute a default under or result in the creation or imposition of any
Lien upon any of the property of the Guarantor pursuant to the provisions of the
Certificate of Incorporation or By-laws of the Guarantor or any agreement or
instrument known to such counsel to which the Guarantor is a party or by which
the Guarantor may be bound; and
(11) The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Agreement constitute an exempt transaction under the
registration provisions of the Securities Act of 1933, as amended, and do not
under existing law require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture in respect thereof
under the Trust Indenture Act of 1939.
The opinion of Hill & Barlow, a Professional Corporation, shall
cover such other matters relating to the sale of the Notes as the Purchaser may
reasonably request. With respect to matters of fact on which such opinion is
based, such counsel shall be entitled to rely on appropriate certificates of
public officials and officers of the Company and the Guarantor.
AMENDMENT AGREEMENT
dated as of June 1, 1992
Barnstable Water Company Indianapolis Life Insurance Company
47 Old Yarmouth Road 2960 North Meridian Street
Hyannis, MA 02601 Indianapolis, Indiana 46208
Barnstable Holding Company
47 Old Yarmouth Road
Hyannis, MA 02601
Ladies and Gentlemen:
Section 1. Introduction. Reference is made to:
(a) the Note Agreement dated as of February 15, 1991 (the "Note
Agreement") between Barnstable Water Company, a Massachusetts corporation (the
"Company"), and Indianapolis Life Insurance Company (the "Purchaser"); and
(b) the Guaranty Agreement dated as of February 15, 1991 (the
"Guaranty") from Barnstable Holding Co. Inc., a Delaware corporation (the
"Guarantor"), to the holder of $2,000,000 10.2% Senior Notes due February 15,
2001 (the "Notes") issued under the Note Agreement
Section 2. Definition of Terms. All capitalized terms used but not defined
in this Amendment Agreement have the meanings ascribed to them in the Note
Agreement.
Section 3. Identification of Noteholders. The Purchaser hereby certifies
that it is the holder on the date of all of the outstanding Notes.
Section 4. Amendments to Note Agreement.
4.1. Amendment to Section 5.9. The first paragraph of Section 5.9 of
the Note Agreement is hereby amended, in its entirety so that the same shall
henceforth read as follows:
"5.9. Restricted Payments. The Company will not, except as
hereinafter provided:
(a) Declare or pay any dividends, either in cash or
property, on any shares of its capital stock of any
class (except dividends or other distributions payable
(i) in respect of the Company's 6% cumulative
preferred stock and (ii) solely in shares of capital
stock of the Company);
(b) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital
stock of any class or any warrants, rights or options to
purchase or acquire any shares of its capital stock
(other than in exchange for or out of the net cash
proceeds to the Company from the substantially
concurrent issue or sale of other
shares of capital stock of the Company or warrants,
rights, or options to purchase or acquire any shares of
its capital stock); or
(c) Make any other payment or distribution, either directly
or indirectly or through any Subsidiary, in respect of
its capital stock;
(such declarations or payments of dividends, purchases, redemptions
or retirements of capital stock and warrants, rights or options and all
such other payments or distributions being herein collectively called
"Restricted Payments"), if, after giving effect thereto, either (i) an
Event of Default shall have occurred and be continuing or (ii) the sum of
(x) the aggregate amount of Restricted Payments made during the period
from and after December 31, 1990 to and including the date of the making
of the Restricted Payment in question, plus (y) the aggregate amount of
all Restricted Investments made by the Company or any Restricted
Subsidiary during said period would exceed 50% of Consolidated Net Income
for such period, computed on a cumulative basis for said entire period
after deducting (A) all dividends paid on the 6% cumulative preferred
stock of the Company outstanding on the Closing Date and (B) all amounts
paid by the Company pursuant to the terms of the Real Estate Lease (or if
such Consolidated Net Income is a deficit figure, then minus 100% of such
deficit)."
4.2. Amendment to Section 5.10. Paragraph (g) of Section 5.10 of the
Note Agreement is hereby amended in its entirety by deleting the same and
inserting in lieu thereof "Intentionally omitted; and".
4.3. Amendment to Section 5.14. Section 5.14 of the Note Agreement
is hereby amended by adding to the end thereof the following:
'"; provided that notwithstanding the foregoing, the Company may be
a party to the Real Estate Lease.'
4.4. Amendment to Section 5.16. Paragraph (f) of Section 5.16 of the
Note Agreement is hereby amended by deleting the word "and" between clauses (i)
and (ii), and deleting the semicolon following clause (ii) and inserting in lieu
thereof the following:
", and (iii) the aggregate amount of all payments made by the
Company in respect of the Real Estate Lease during the period covered by
such certificate (including, without limitation, all taxes, insurance
premiums and other charges paid by the Company as lessee under such Real
Estate Lease);"
4.5 Amendment to Section 8.1. Section 8.1 of the Note Agreement is
hereby amended by inserting the following definition between the definitions of
the terms "Purchaser" and "Rentals":
"`Real Estate Lease' shall mean that certain real estate lease
between Barlaco, Inc., a Massachusetts corporation, as lessor, and the
Company, as lessee, executed by the parties thereto as of November 1,
1991, with a term beginning January 1, 1991."
Section 5. Amendments to the Guaranty.
5.1. Amendment to Section 7.3. Paragraph (a)(3)(ii) of Section 7.3
is hereby amended to include "and" at the end of such paragraph; paragraph
(a)(4) of such Section is hereby amended to delete "; and" appearing at the end
of such paragraph and inserting in lieu thereof a period; and paragraph (a)(5)
of such Section is hereby amended in its entirety by deleting the same.
5.2. Amendment to Section 7.8. The proviso at the end of paragraph
(a) of Section 7.8 of the Guaranty is hereby amended in its entirety so that the
same shall henceforth read as follows:
"provided that (x) any Significant Subsidiary may sell, lease or
otherwise dispose of more than an insubstantial pan of its assets to the
Guarantor or any Wholly-owned Significant Subsidiary, and (y) Barlaco may
lease more than an insubstantial part of its assets to the Company
pursuant to the provisions of the Real Estate Lease."
5.3. Amendment to Section 7.12. Section 7.12 of the Guaranty is
hereby amended by adding to the end thereof the following:
"provided that notwithstanding the foregoing, the Guarantor may
permit the Company and Barlaco to be parties to the Real Estate Lease."
5.4 Amendment to Section 9. Section 9 of the Guaranty is hereby
amended to add two new definitions as follows:
(a) between tile definitions of the terms "Applicable Accounting
Procedures" and "Disposition".
"`Barlaco' shall mean Barlaco. Inc., a Massachusetts corporation.";
and
(b) between the definitions of the terms "Group Funded Debt" and
"Restricted Group"
"`Real Estate Lease' shall mean that certain real estate lease
between Barlaco, as lessor, and title Company, as lessee, executed by the
Parties thereto as of November 1, 1991, with a term beginning January 1,
1991."
Section 6. Ratification of Note Agreement and Guaranty. Except as herein
expressly amended, the Note Agreement and the Guaranty each is in all respects
rarified and confirmed. If and to the extent mat any of the terms or provisions
of the Note Agreement or the Guaranty are in conflict or inconsistent with any
of me terms or provisions of this Amendment Agreement, this Amendment Agreement
shall govern.
Section 7. Acknowledgement of Amendment to Note Agreement; Reaffirmation
of Guaranty. The Guarantor hereby expressly acknowledges that certain amendments
are made hereby to the terms of the Note Agreement and me Guarantor reaffirms
its obligations under the Guaranty.
Section 8. Severability. Should any part of this Amendment Agreement for
any reason be declared invalid or unenforceable, such decision shall not affect
the validity or enforceability of any remaining portion, which remaining portion
shall remain in force and effect as if this Amendment Agreement had been
executed with tile invalid or unenforceable portion thereof eliminated and it is
hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Amendment Agreement without including
therein any such part, parts or portion which may, for any reason, be hereafter
declared invalid or unenforceable.
Section 9. Execution in Counterparts. Two or more duplicate originals of
this Amendment Agreement may be signed by the parties hereto, each of which
shall be an original but all of which together shall constitute one and the same
instrument. This Amendment Agreement may be executed in one or more counterparts
and will be effective (as of the effective dare set forth below) when at least
one counterpart has been executed by each party hereto, and each set of
counterparts which, collectively, show execution by each party shall constitute
one duplicate original.
Section 10. Governing Law. This Amendment Agreement shall be governed by
and construed in accordance with Massachusetts law.
Section 11. Captions. The descriptive headings of the various Sections or
parts of this Amendment Agreement are for convenience only and shall not affect
the meaning or construction of any of the provisions hereof.
This Amendment Agreement shall be effective as of June 1, 1992.
BARNSTABLE WATER COMPANY
By: /s/ George D. Wadsworth
--------------------------------
George D. Wadsworth, President
BARNSTABLE HOLDING CO., INC.
By: /s/ George D. Wadsworth
--------------------------------
George D. Wadsworth, President
INDIANAPOLIS LIFE INSURANCE COMPANY
By: /s/ Gene E. Trueblood
--------------------------------
Gene E. Trueblood, Vice President, Securities
CONSENT AND WAIVER
Consent and Waiver dated as of June 1, 1992, by Indianapolis Life
Insurance Company (the " Purchaser"), in favor of Barnstable Water Company, a
Massachusetts corporation (the "Company "), and Barnstable Holding Co. Inc., a
Delaware corporation (the "Guarantor").
Reference is made to the following:
a. The Note Agreement dated as of February 15, 1991 (the "Note Agreement")
between the Purchaser and the Company, as amended as of the date hereof;
b. The Guaranty Agreement dated as of February 15, 1991 (the "Guaranty")
from the Guarantor to the holders of $2,000,000 10.2% Senior Notes due February
15, 2001 issued under the Note Agreement; and
c. The Lease of certain real estate dated as of November 1, 1991 (the
"Real Estate Lease") between Barlaco, Inc., a Massachusetts corporation
("Barlaco "), as lessor, and the Company, as lessee.
In connection with the Amendment Agreement dated as of June 30, 1992 among
the Company, the Guarantor and the Purchaser, the Purchaser, the Company and the
Guarantor hereby agrees as follows:
1. The Purchaser hereby consents to the execution, delivery and
performance by Barlaco and the Company of the Real Estate Lease in accordance
with its terms.
2. The Purchaser hereby waives compliance by the Company with Section 5.14
of the Note Agreement and compliance by the Guarantor with Sections 7.8 and 7.12
of the Guaranty for the purpose of entering into the Real Estate Lease and
consents to the payments heretofore made by the Company under the Real Estate
Lease.
3. The Company and the Guarantor hereby represent that after giving effect
to the waiver set forth in paragraph 2 hereof, no Defaults or Events of Default
have occurred and are continuing under the Note Agreement or the Guaranty
(exclusive of any Default or Event of Default which has been waived by the
Purchaser prior to the date hereof).
4. This Consent and Waiver shall be governed by Massachusetts law.
Executed as of the date first set forth above.
BARNSTABLE WATER COMPANY
By: /s/ George D. Wadsworth
--------------------------------
George D. Wadsworth, President
BARNSTABLE HOLDING CO., INC.
By: /s/ George D. Wadsworth
--------------------------------
George D. Wadsworth, President
INDIANAPOLIS LIFE INSURANCE COMPANY
By: /s/ Gene E. Trueblood
--------------------------------
Gene E. Trueblood, Vice President, Securities
BARNSTABLE WATER COMPANY
10.2% Senior Note
Due February 15, 2011
No. R-l
$2,000,000 March 19, 1991
BARNSTABLE WATER COMPANY, a Massachusetts corporation (the
"Company"), for value received, hereby promises to pay to
INDIANAPOLIS LIFE INSURANCE COMPANY
or registered assigns
on or before the fifteenth day of February, 2011
the principal amount of
TWO MILLION AND 00/100 DOLLARS ($2,000,000)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 10.2% per annum from the date hereof until maturity, payable
semiannually on the fifteenth of each February and August in each year
(commencing on the first of such dates after the date hereof) and at maturity.
The Company agrees to pay interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest, at the rate
of 12.2% per annum after the due date, whether by acceleration or otherwise,
until paid. Both the principal hereof and interest hereon are payable at the
principal office of the Company in Hyannis, Massachusetts in coin or currency of
the United States of America which at the time of payment shall be legal tender
for the payment of public and private debts.
This Note is one of the 10.2% Senior Notes due February 15, 2011
(the "Notes") of the Company in the aggregate principal amount of $2,000,000
issued or to be issued under and pursuant to the terms and provisions of the
Note Agreement dated as of February 15, 1991 (the "Note Agreement"), entered
into by the Company with the original Purchaser therein referred to and this
Note and the holder hereof are entitled equally and ratably with the holders of
all other Notes outstanding under the Note Agreement to all the benefits
provided for thereby or referred to therein. Reference is hereby made to the
Note Agreement for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreement
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the terms and
in the manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option
of the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreement.
Pursuant to a Guaranty Agreement dated as of February 15, 1991 (the
"Guaranty") from Barnstable Holding Co., Inc. (the "Guarantor"), payment of the
principal of, and interest and premium on, the Notes has been guaranteed by the
Guarantor.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest on
this Note shall be made only to or upon the order in writing of the registered
holder.
BARNSTABLE WATER COMPANY
By: /s/ George D. Wadsworth
--------------------------------
George D. Wadsworth, President
GUARANTY AGREEMENT
Dated as of February 15, 1991
of
BARNSTABLE HOLDING CO., INC.
Re: $2,000,000 10.296 Senior Notes
of
Barnstable Water Company
EXHIBIT B
(to Note Agreement)
TABLE OF CONTENTS
Page
Section Heading Number
- ------- ------- ------
1. GUARANTEE 1
2. PAYMENT UPON CERTAIN EVENTS 1
3. WAIVERS; OBLIGATION UNCONDITIONAL 2
4. COLLECTION EXPENSES 3
5. NO SUBROGATION UNTIL PAYMENT IN FULL 3
6. REPRESENTATIONS AND WARRANTIES 3
7. GUARANTOR COVENANTS 3
8. REQUIRED PURCHASE OF NOTES ON GUARANTOR
CHANGE OF CONTROL 11
9. DEFINITIONS 12
10. JURISDICTION AND SERVICE IN RESPECT OF
GUARANTOR 13
11. SUCCESSORS AND ASSIGNS 13
12. NOTICES 14
13. GOVERNING LAW 14
14. AMENDMENTS, WAIVERS AND CONSENTS 14
Signatures 15
GUARANTY AGREEMENT
AGREEMENT dated as of February 15, 1991 by Barnstable Holding Co.,
Inc., a Delaware corporation (the "Guarantor").
RECITALS OF THE GUARANTOR
A. The Guarantor owns 95.47% of the outstanding shares of common
stock of Barnstable Water Company, a Massachusetts corporation (the "Company").
B. The Company has entered into a Note Agreement dated as of
February 15, 1991 (the "Note Agreement") with Indianapolis Life Insurance
Company (the "Note Purchaser") providing for the sale by the Company of its
$2,000,000 principal amount 10.2% Senior Notes due February 15, 2011 (the
"Notes").
C. Capitalized terms used but not defined herein shall have the
meanings assigned in the Note Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and to aid the sale of the Notes and to induce the
Note Purchaser, and every future holder of the Notes, to purchase the Notes, it
is hereby agreed as follows:
SECTION 1. GUARANTEE.
The Guarantor hereby unconditionally guarantees to each holder of
any Note (collectively "Noteholders" and individually a "Noteholder") (1) the
due and punctual payment at maturity, whether at stated maturity, by
acceleration, by notice of prepayment or otherwise, of the principal of and
premium, if any, and interest on the Notes in accordance with the terms and
conditions thereof and of the Note Agreement, and (2) the prompt performance and
compliance by the Company with each of its other obligations under the Note
Agreement.
SECTION 2. PAYMENT UPON CERTAIN EVENTS.
The Guarantor agrees that, if any of the following events occurs, i.e.,
(a) the entry of a decree or order by a court having jurisdiction in the
premises for relief under any bankruptcy or similar law or laws for the relief
of debtors in respect of the Guarantor, or adjudging the Guarantor a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
adjustment or composition of or in respect of the Guarantor under the Federal
Bankruptcy Code or any other applicable Federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of or for the Guarantor or any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; or
(b) the commencement by the Guarantor of a voluntary case, or the
institution by it of proceedings to be adjudicated a bankrupt or insolvent, or
the consent by it to the institution of bankruptcy or insolvency proceedings,
against it, or the filing by it of a petition or answer or consent seeking
reorganization, arrangement or relief under the Federal Bankruptcy Code or any
other applicable Federal or state law, or the consent or acquiescence by it to
the filing of any such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee, sequestrator, (or other
similar official) of the Guarantor or any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability or its failure to pay its debts generally as
they become due, or the taking of corporate action by the Guarantor in
furtherance of any such action;
the Guarantor will forthwith pay to the Noteholders, without demand or notice
and whether or not there has been any other default under the Note Agreement or
the Notes, the whole amount of the principal of the Notes then outstanding and
any unpaid interest thereon, and, to the extent not prohibited by applicable
law, an amount as liquidated damages for the loss of the bargain evidenced
hereby (and not as a penalty) equal to the Make-Whole Amount.
SECTION 3. WAIVERS; OBLIGATION UNCONDITIONAL.
The Guarantor assents to all the terms, covenants and conditions of
the Notes and the Note Agreement, and irrevocably waives presentation, demand
for payment, or protest, of any of the Notes, any and all notice of any such
presentation, demand or protest, notice of any Default or Event of Default under
the Note Agreement, notice of acceptance of this guarantee or of the terms and
provisions hereof by any Noteholder, any requirement of diligence or promptness
on the part of any Noteholder in the enforcement of rights under the provisions
hereof, of the Note Agreement or of the Notes, or any right to require any
Noteholder to proceed first against the Company. The obligations of the
Guarantor hereunder shall be unconditional irrespective of the genuineness,
validity, regularity or enforceability of the Note Agreement or of the Notes or
of any other circumstance which might otherwise constitute a legal or equitable
discharge of a surety or guarantor. The obligations of the Guarantor hereunder
shall not be affected by:
(a) the recovery of any judgment against the Company, or by the levy of
any writ or process of execution under any such judgment, or by any action or
proceeding taken by any Noteholder, either under the Notes or under the Note
Agreement for the enforcement thereof, or hereof, or in the exercise of any
right or power given or conferred thereby, or hereby, or
(b) any delay, failure or omission upon the part of any Noteholder to
enforce any of the rights or powers given or conferred hereby or by the Note
Agreement, or by any delay, failure or omission upon the part of any Noteholder
to enforce any right of any Noteholder against the Company, or by any action by
any Noteholder in granting indulgence to the Company, or in waiving or
acquiescing in any Default or Event of Default upon the part of the Company
under the Notes or under the Note Agreement, or
(c) the consolidation or merger of the Company with or into any other
corporation or corporations or any sale, lease or other disposition of the
Company's properties as an entirety or substantially as an entirety to any other
corporation, or
(d) any other act or delay or failure to act, or by any other thing, which
mayor might in any manner or to any extent vary the risk of the Guarantor
hereunder;
it being the purpose and intent of the parties hereto that the obligations of
the Guarantor hereunder shall be absolute and unconditional under any and all
circumstances, and shall not be discharged except by payment as herein provided,
and then only to the extent of such payment or payments.
SECTION 4. COLLECTION EXPENSES.
In the event that the Guarantor shall be required to make any
payment to any Noteholder pursuant to this Agreement, it shall, in addition to
such payment, pay to such Noteholder such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to attorneys, and any expenses or liabilities incurred by any
Noteholder hereunder. The covenants contained in this Agreement may be enforced
by any Noteholder.
SECTION 5. NO SUBROGATION UNTIL PAYMENT IN FULL.
No payment by the Guarantor pursuant to the provisions hereof to any
Noteholder shall entitle the Guarantor, by subrogation to the rights of the
holders of the Notes in respect of which such payment is made or otherwise, to
any payment by the Company or out of the property of the Company, except after
payment in full of the entire principal of and premium, if any, and interest on
the Notes, or provision for such payment satisfactory to the holders of the
Notes.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Guarantor represents and warrants that all representations set
forth in the form of Closing Certificate of the Guarantor attached to the Note
Agreement as Exhibit D are true and correct as of the date hereof and will be
true and correct on the Closing Date.
SECTION 7. GUARANTOR COVENANTS.
From and after the First Closing Date and continuing so long as any
amount remains unpaid on any Note:
7.1. Corporate Existence, Etc. The Guarantor will preserve and keep
in full force and effect, and will cause each Significant Subsidiary to preserve
and keep in full force and effect, its corporate existence and all licenses,
permits and franchises necessary to the proper conduct of its business, provided
that the foregoing shall not prevent any transaction permitted by Section 7.7.
7.2. Taxes, Claims for Labor and Materials, Compliance with Laws.
The Guarantor will promptly pay and discharge, and will cause each Significant
Subsidiary promptly to pay and discharge, all lawful taxes, assessments and
governmental charges or levies imposed upon the Guarantor or such Significant
Subsidiary, respectively, or upon or in respect of all or any part of the
property or business of the Guarantor or such Significant Subsidiary, all trade
accounts payable in accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid might become a Lien upon
any property of the Guarantor or such Significant Subsidiary; provided the
Guarantor or such Significant Subsidiary shall not be required to pay any such
tax, assessment, charge, levy, account payable or claim if (i) the validity,
applicability or amount thereof is being contested in good faith by appropriate
actions or proceedings which will prevent the forfeiture or sale of any property
of the Guarantor or such Significant Subsidiary or any material interference
with the use thereof by the Guarantor or such Significant Subsidiary, and (ii)
the Guarantor or such Significant Subsidiary shall set aside on its books,
reserves deemed by it to be adequate with respect thereto. The Guarantor will
promptly comply and will cause each subsidiary to promptly comply with all laws,
ordinances or governmental rules and regulations to which it is subject
including, without limitation, the Occupational Safety and Health Act of 1970,
as amended, ERISA and all laws, ordinances, governmental rules and regulations
relating to environmental protection in all applicable jurisdictions, the
violation of which could materially and adversely affect the properties,
business, prospects, profits or condition of the Guarantor and its Significant
Subsidiaries or would result in any Lien not permitted under Section 7.4.
7.3. Limitations on Current Debt and Funded Debt. (a) The Guarantor
will not, and will not permit any Significant Subsidiary to, create, assume or
incur or in any manner become liable in respect of any Current Debt or Funded
Debt, except:
(1) unsecured Funded Debt of the Guarantor and Funded Debt of the
Guarantor and its Significant Subsidiaries secured by Liens permitted by
Section 7.4(g), provided that at the time of issuance thereof and after giving
effect thereto and to the application of the proceeds thereof:
(i) Group Funded Debt shall not exceed 7596 of Consolidated Tangible
Net Worth,
(ii) the Net Income Available for Fixed Charges in any consecutive
12 of the 15 calendar months immediately preceding any date of determination
thereof shall have equalled at least 175% of Pro Forma Fixed Charges, and
(iii) the Company would be permitted to incur $1.00 of additional
Funded Debt under the provisions of Section 5.6(a)(3) of the Note Agreement;
(2) any refinancing of Funded Debt issued and outstanding pursuant to
Section 7.3(a)(1} (without increase in principal amount from the amount
outstanding on the date of such refinancing);
(3) unsecured Current Debt of the Guarantor, provided that at the time
of issuance thereof and after giving effect thereto and to the application of
the proceeds thereof:
(i) the aggregate of all Group Funded Debt and Group Current Debt
shall not exceed 75% of the sum of Total Capitalization plus Consolidated
Current Debt, and
(ii) the Company would be permitted to incur $1.00 of additional
Current Debt under the provisions of Section 5.6(a)(5) of the Note Agreement;
(4) Current Debt or Funded Debt of a Significant Subsidiary to the
Guarantor or to a Wholly-owned Significant Subsidiary; and
(5) Funded Debt of Barlaco, Inc., a Massachusetts corporation ("Barlaco")
to the Company incurred for the purpose of paying taxes owed by Barlaco;
provided that such Funded Debt shall bear interest (which may be expressed to be
payable at the maturity of such Funded Debt); and provided further that such
Funded Debt shall have a fixed maturity date and shall become due and payable
upon the sale of any real property owned by Barlaco.
(b) Any corporation which becomes a Significant Subsidiary after the
date hereof shall for all purposes of this Section 7.3 be deemed to have
created, assumed or incurred at the time it becomes a Significant Subsidiary all
Funded Debt of such corporation existing immediately after it becomes a
Significant Subsidiary.
7.4. Limitation on Liens. The Guarantor will not, and will not
permit any Significant Subsidiary to, create or incur, or suffer to be incurred
or to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Significant Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention devices,
except:
(a) Liens for property taxes and assessments or governmental charges or
levies and Liens securing claims or demands of mechanics and materialmen,
provided that payment thereof is not at the time required by Section 7.2;
(b) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in respect
of which the Guarantor or a Significant Subsidiary shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review shall
have been secured;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker's compensation,
unemployment insurance and other like laws, warehousemen's and attorneys' liens
and statutory landlords' liens) and Liens to secure the performance of bids,
tenders or trade contracts, or to secure statutory obligations, surety or appeal
bonds or other Liens of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money, provided in each
case, the obligation secured is not overdue or, if overdue, is being contested
in good faith by appropriate actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservation.), or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Guarantor and its Significant Subsidiaries or which customarily exist on
properties of
corporations engaged in similar activities and similarly situated and which
do not in any event materially impair their use in the operation of the business
of the Guarantor and its Significant Subsidiaries;
(e) Liens securing Indebtedness of a Significant Subsidiary to the
Guarantor or to another Significant Subsidiary;
(f) Liens existing as of September 30, 1990 and reflected in Schedule III
to the Note Agreement; and
(g) Liens incurred after the First Closing Date given to secure the
payment of the purchase price incurred in connection with the acquisition of
fixed assets useful and intended to be used in carrying on the business of the
Guarantor or a Significant Subsidiary, including Liens existing on such fixed
assets at the time of acquisition thereof or at the time of acquisition by the
Guarantor or a Significant Subsidiary of any business entity then owning such
fixed assets, whether or not such existing Liens were given to secure the
payment of the purchase price of the fixed assets to which they attach so long
as they were not incurred, extended or renewed in contemplation of such
acquisition, provided that (i) the Lien shall attach solely to the fixed assets
acquired or purchased, (ii) at the time of acquisition of such fixed assets, the
aggregate amount remaining unpaid on all Indebtedness secured by Liens on such
fixed assets whether or not assumed by the Guarantor or a Significant Subsidiary
shall not exceed an amount equal to 65% (or 100% in the case of Capitalized
Leases) of the lesser of the total purchase price or fair market value at the
time of acquisition of such fixed assets (as determined in good faith by the
Board of Directors of the Guarantor), and (iii) all such Indebtedness shall have
been incurred within the applicable limitations provided in Section 7.3(a)(1) or
Section 7.3(a)(2).
7.5. Limitation on Sale and Leasebacks. The Guarantor will not, and
will not permit any Significant Subsidiary to, enter into any arrangement
whereby the Guarantor or any Significant Subsidiary shall sell or transfer any
property owned by the Guarantor or any Significant Subsidiary to any Person
other than the Guarantor or a Significant Subsidiary and thereupon the Guarantor
or any Significant Subsidiary shall lease or intend to lease, as lessee, the
same property unless such sale and leaseback would be permitted by
Sections 7.3, 7.4 and 7.1.
7.6 Investments. The Guarantor will not, and will not permit any
Significant Subsidiary to, make any Investments, other than:
(a) Investments by (i) the Guarantor in and to the Restricted Group,
including any Investment in a corporation which, after giving effect to
such Investment, will become a member of the Restricted Group and (ii)
Significant Subsidiary in and to another Significant Subsidiary, including
any Investment in a corporation which after giving effect to such
Investment will become a Significant Subsidiary;
(b) Investments by the Guarantor or any Significant Subsidiary in
any Investment described in paragraphs (a) through (f), inclusive,
of Section 5.10 of the Note Agreement;
(c) Investments by the Guarantor in direct obligations of the United
States of America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith and
credit obligation of the United States of America, in either case,
maturing in five years or less from the date of acquisition thereof;
(d) Investments by the Guarantor in certificates of deposit maturing
within three years from the date of issuance thereof, issued by a bank or
trust, company organized under the laws of the United States or any state
thereof, having capital, surplus and undivided profits aggregating at
least $100,000,000 and whose long-term certificates of deposit are, at the
time of acquisition thereof by the Guarantor, rated AA or better by
Standard & Poor's Corporation or Aa or better by Moody's Investors
Service, Inc.;
(e) Investments by the Guarantor in debt Securities issued by
corporations organized under the laws of the United States or any state
thereof maturing in three years or less from the date of acquisition
thereof which, at the time of acquisition by the Guarantor, is accorded a
rating of A or better by S&P or Moody's;
(f) Investments by the Guarantor in general obligations of any state
or political subdivision of any state maturing in three years or less from
the date of acquisition thereof which, at the time of acquisition by the
Guarantor, is accorded a rating of AA or better by S&:P or Aa or better by
Moody's;
(g) loans or advances in the usual and ordinary course of business
to officers, directors and employees for expenses (including moving
expenses related to a transfer) incidental to carrying on the business of
the Guarantor or any Significant Subsidiary; and
(h) receivables arising from the sale of goods and services in the
ordinary course of business of the Guarantor and Its Significant
Subsidiaries.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 7.5, such Investments shall be taken at
the original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation therein, but less any amount repaid or recovered on
account of capital or principal.
For purposes of this Section 7.6. at any time when a corporation
becomes a Significant Subsidiary, all Investments of such corporation at such
time shall be deemed to have been made by such corporation, as a Significant
Subsidiary, at such time.
7.7 Mergers and Consolidations. The Guarantor will not, and will not
permit any Significant Subsidiary to, consolidate with or be a party to a merger
with any other corporation provided, however, that:
(1) any Significant Subsidiary may merge or consolidate with or into
the Guarantor or any Wholly-owned Significant Subsidiary so long as in any
merger or consolidation involving the Guarantor, the Guarantor shall be
the surviving or continuing corporation; and
(2) the Guarantor may consolidate or merge with any other
corporation if (i) the surviving or continuing corporation (the "New
Guarantor") shall be a corporation organized and existing under the laws
of the United States of America or any State thereof or the District of
Columbia, (ii) the New Guarantor shall expressly and unconditionally
assume, by an instrument in writing the due and punctual performance or
observance of every covenant of this Agreement to be performed or observed
by the Guarantor, (iii) the Guarantor shall have delivered to the holders
of the Notes a certificate
of a responsible officer of the Guarantor and an opinion of counsel, each
stating that such consolidation or merger complies with the provisions of
this Section 7.7(2) and that all conditions precedent relating to such
transaction provided for in this Section 7.7(2) have been met and (iv) at
the time of such consolidation or merger and after giving effect thereto
no Default or Event of Default shall have occurred and be continuing.
7.8. Sale of Assets; Issuance or Sale of Subsidiary Stock. (a)
Except as otherwise permitted by Section 7.7, the Guarantor will not, and will
not permit any Significant Subsidiary to, sell, lease or otherwise dispose of
more than an insubstantial part (as defined in paragraph (d) of this Section
7.8) of the assets of the Guarantor and its Significant Subsidiaries (other than
in the ordinary course of business) (a "Disposition") unless an amount at least
equal to 25% of the net proceeds of such Disposition received by the Guarantor
or such Significant Subsidiary is, within three months of the date of such
Disposition, (i) used to prepay the Notes in accordance with Section 2.2 of the
Note Agreement, or (ii) used to purchase Notes from the holders thereof in
accordance with the provisions of Section 8 hereof or Section 5.13 of the Note
Agreement or (iii) invested in Investments permitted by Section 7.6; provided
that any Significant Subsidiary may sell, lease or otherwise dispose of more
than an insubstantial part of its assets to the Guarantor or any Wholly-owned
Significant Subsidiary.
(b) The Guarantor will not permit any Significant Subsidiary to
issue or sell any shares of stock of any class (including as "stock" for the
purposes of this Section 7.8, any warrants, rights or options to purchase or
otherwise acquire stock or other Securities exchangeable for or convertible into
stock) of such Significant Subsidiary to any Person other than the Guarantor or
a Wholly-owned Significant Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly pre-existing preemptive
rights of minority shareholders in connection with the simultaneous issuance of
stock to the Guarantor and/or a Significant Subsidiary whereby the Guarantor
and/or such Significant Subsidiary maintain their same proportionate interest in
such Significant Subsidiary.
(c) The Guarantor will not sell, transfer or otherwise dispose of
any shares of stock of any Significant Subsidiary (except to qualify directors)
or any Indebtedness of any Significant Subsidiary, and will not permit any
Significant Subsidiary to sell, transfer or otherwise dispose of (except to the
Guarantor or a Wholly-owned Significant Subsidiary) any shares of stock or any
Indebtedness of any other Significant Subsidiary, unless:
(1) simultaneously with such sale, transfer, or disposition, all
shares of stock and all Indebtedness of such Significant Subsidiary at the
time owned by the Guarantor and by every other Significant Subsidiary
shall be sold, transferred or disposed of as an entirety;
(2) the Board of Directors of the Guarantor shall have determined,
as evidenced by a resolution thereof, that the proposed sale, transfer or
disposition of said shares of stock and Indebtedness is in the best
interests of the Guarantor;
(3) said shares of stock and Indebtedness are sold, transferred or
otherwise disposed of to a Person, for a cash consideration and on terms
reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(4) the Significant Subsidiary being disposed of shall not have any
continuing investment in the Guarantor or any other Significant Subsidiary
not being simultaneously disposed of; and
(5) such sale or other disposition does not involve more than an
insubstantial part {as hereinafter defined) of the assets of the Guarantor
and its Significant Subsidiaries.
(d) As used in this Section 7.8, a sale, transfer or other
disposition shall be deemed to be more than an "insubstantial part" of the
assets of the Guarantor and its Significant Subsidiaries if the fair market
value of such assets (determined in good faith by a resolution adopted by the
Board of Directors of the Guarantor) exceeds $10,000 during the 12-month period
ending on the date of such sale, transfer or other disposition.
7.9. Guaranties. The Guarantor will not, and will not permit any
Significant Subsidiary to, become or be liable in respect of any Guaranty except
Guaranties by the Guarantor which are limited in amount to a stated maximum
dollar exposure or which constitute Guaranties of obligations incurred by the
Company or any Significant Subsidiary in compliance with the provisions of this
Agreement.
7.10. Use of Rear Property. (a) The Guarantor will not, and will not
permit any member of the Restricted Group to, use, sell, lease or otherwise
dispose of any of its real property in a manner which could impair in any
material respect the business of the Company as a corporation principally
engaged in the storage, transmission and sale of water for domestic, industrial
and commercial uses, and activities related thereto (the "Company's Business").
(b) Prior to any change in use by the Guarantor or any Significant
Subsidiary of any of its real property (including a Disposition to any other
Person), the Guarantor will furnish or cause to be furnished to each holder of
the Notes a hydrological assessment of the property in view of the proposed use
by a Hydrogeologist stating that the proposed use could not reasonably be
expected to impair in any material respect the Company's Business.
"Hydrogeologist" shall mean a hydrogeologist who is (i) certified by
the National Water Well Association as a certified groundwater professional, or
(ii) a member of the American Institute of Professional Geologists having
appropriate academic and work experience in hydrogeology or (iii) a member of
the American Institute of Hydrology having appropriate academic and work
experience in hydrology.
7.11. Purchase of Notes. Neither the Guarantor nor any Significant
Subsidiary or Affiliate, directly or indirectly, may purchase or make any offer
to purchase any Notes unless an offer has been made to purchase Notes, pro rata,
from all holders of the Notes at the same time and upon the same terms. In case
the Guarantor purchases or otherwise acquires any Notes, such Notes shall
immediately thereafter be cancelled and no Notes shall be issued in substitution
therefor. Without limiting the foregoing, upon the purchase or other acquisition
of any Notes by the Guarantor, any Significant Subsidiary or any Affiliate, such
Notes shall no longer be outstanding for purposes of any section of the Note
Agreement relating to the taking by the holders of the Notes of any actions with
respect thereto, including, without limitation, Section 6.J, Section 6.4 and
Section 7.1 of the Note Agreement.
7.12. Transactions with Affiliates. The Guarantor will not, and will
not permit any Significant Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Guarantor's or such Significant
Subsidiaries business and upon fair and reasonable terms no less favorable to
the Guarantor or such Significant Subsidiary than would obtain in a comparable
arm's length transaction with a Person other than an Affiliate.
7.13. Reports. The Guarantor will keep, and will cause each
Significant Subsidiary to keep, proper books of record and account In which full
and correct entries will be made of all dealings or transactions of, or in
relation to, the business and affairs of the Guarantor or such Significant
Subsidiary, in accordance with GAAP consistently applied (except for changes
disclosed in the financial statements furnished to the Note Purchaser pursuant
to this Section 7.13 and concurred in by the independent public accountants
referred to in Section 7.13(b) hereof), and will furnish to the Note Purchaser
so long as it is the holder of any Note and to each other Institutional Holder
of the then outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any event within 75
days after the end of the first quarterly fiscal period and within 60 days after
the end of each other quarterly fiscal period of each fiscal year, copies of:
(1) consolidated balance sheets of the Guarantor and its consolidated
subsidiaries as of the close of such quarterly fiscal period, setting forth in
comparative form the consolidated figures for- the fiscal year then most
recently ended,
(2) consolidated statements of income of the Guarantor and its
consolidated subsidiaries for such quarterly fiscal period and for the portion
of the fiscal year ending with such quarterly fiscal period, in each case
setting forth in comparative form the consolidated figures for the corresponding
periods of the preceding fiscal year, and
(3) consolidated statements of cash flows of the Guarantor and its
consolidated subsidiaries for the portion of the fiscal year ending with such
quarterly fiscal period, setting forth in comparative form the consolidated
figures for the corresponding period of tile preceding fiscal year,
all in reasonable detail prepared in conformity with the Appliance Accounting
Procedures and certified as complete and correct by an authorized financial
officer of the Guarantor;
(b) Annual Statements. As soon as available and in any event within 120
days after the close of each fiscal year of the Guarantor, copies of:
(1) consolidated balance sheets of the Guarantor and its consolidated
subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained earnings and cash flows
of the Guarantor and its consolidated subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures for the
preceding fiscal year, all in reasonable detail and accompanied by a report
thereon of a firm of independent public accountants of recognized national
standing selected by the Guarantor to the effect that the consolidated financial
statements present fairly, in all material respects, the consolidated financial
position of the Guarantor and its consolidated subsidiaries as of the end of the
fiscal year being
reported on and the consolidated results of the operations and cash flows for
said year in conformity with GAAP and that the examination of such accountants
in connection with such financial statements has been conducted in accordance
with generally accepted auditing standards and included such tests of the
accounting records and such other auditing procedures as said accountants deemed
necessary in the circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of each interim
or special audit made by independent accountants of the books of the Guarantor
or any Significant Subsidiary and any management letter received from such
accountants;
(d) SEC and Other Reports. Promptly upon their becoming available, one
copy of each financial statement, report, notice or proxy statement sent by the
Guarantor to stockholders generally and of each regular or periodic report, and
any registration statement or prospectus filed by the Guarantor or any
Significant with any securities exchange or the Securities and Exchange
Commission or any successor agency, and copies of any orders in any proceedings
to which the Guarantor or any of its Significant Subsidiaries is a party, issued
by any governmental agency, Federal or state, having jurisdiction over the
Guarantor or any of its subsidiaries;
(e) Officer's Certificates. Within the periods provided in paragraphs (a)
and (b) above, a certificate of an authorized financial officer of the Guarantor
stating that such officer has reviewed the provisions of this Agreement and
setting forth: (i) the information and computations (in sufficient detail)
required in order to establish whether the Guarantor was in compliance with the
requirements of Section 7.2 through Section 7.12 at the end of the period
covered by the financial statements then being furnished, and (ii) whether there
existed as of the date of such financial statements and whether, to the best of
such officer's knowledge, there exists on the date of the certificate or existed
at any time during the period covered by such financial statements any default
under any of the terms or provisions of this Agreement and, if any such
condition or event exists on the date of the certificate, specifying the nature
and period of existence thereof and the action the Company is taking and
proposes to take with respect thereto;
(f) Accountants' Certificates. Within the period provided in paragraph (b)
above, a certificate of the accountants who render an opinion with respect to
such financial statements, stating that they have reviewed this Agreement and
stating further whether, in making their audit, such accountants have become
aware of any default under any of the terms or provisions of this Agreement
insofar as any such terms or provisions pertain to or involve accounting matters
or determinations, and if any such condition or event then exists, specifying
the nature and period of existence thereof; and
(g) Requested Information. With reasonable promptness, such other data and
information as the Note Purchaser or any such Institutional Holder may
reasonably request.
SECTION 8. REQUIRED PURCHASE OF NOTES ON GUARANTOR CHANGE OF CONTROL.
In the event that a Guarantor Change of Control shall occur or the
Guarantor shall have knowledge of any impending Guarantor Change of Control, the
Guarantor shall give written notice thereof (a "Guarantor Notice") promptly (and
in any event within three business days thereafter) to each holder of the Notes
then outstanding. The Guarantor Notice shall (i) describe in reasonable detail
the facts and circumstances giving rise to such Guarantor Change of Control,
(ii) offer to purchase, on a date (the "Change or Control Purchase Date") which
shall be not less than 30 days nor more than 60 days after the date of the
Guarantor Notice, all of the
Notes held by such holder, at a price equal to 100% of the principal amount of
Notes so to be prepaid, accrued interest thereon to the Change of Control
Purchase Date, together with the then applicable Make-Whole Amount, (iii)
request such holder to notify the Guarantor in writing, not less than 10 days
prior to the Change of Control Purchase Date, of its acceptance or rejection of
such offer, (iv) inform such holder that, upon its receipt of the Guarantor
Notice, failure to reject such offer in writing on or before the 10th day prior
to the Change of Control Purchase Date shall be deemed acceptance of such offer
and (v) set forth the respective names and addresses of, and principal amounts
of the Notes held by, any other holders of the Notes then outstanding. Not less
than two business days prior to the Change of Control Purchase Date, the
Guarantor shall provide each holder of the Notes with a reasonably detailed
computation of the Make-Whole Amount.
The Guarantor covenants and agrees that it will on the Change of
Control Purchase Date purchase, or cause to be purchased, all of the Notes held
by each holder of the Notes then outstanding which has accepted the purchase
offer in accordance with this Section 8, by payment of the principal amount of
such Notes, together with interest accrued on the unpaid principal amount of
such Notes to the Change of Control Purchase Date and the then applicable
Make-Whole Amount.
For purposes of this Section 8, the following terms shall have the
meanings ascribed thereto below:
"Control Group" shall mean any related Persons constituting a
"group" for the purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended (other than the Designated Shareholders).
"Designated Shareholders" shall mean the shareholders and beneficial
owners of the Guarantor on the First Closing Date (the "Original Shareholders"),
any Person who is the spouse of any Original Shareholder, any Person or the
spouse of any Person who is a lineal descendant of any Original Shareholder; or
any corporation or partnership of which any of such Persons are legally entitled
to exercise more than a majority of the voting power, or any trust of which any
of such Persons are the sole beneficiaries or the executor or administrator of
the estate of any such Person or any legal guardian of any such Person.
"Guarantor Change or Control" shall mean the occurrence after the
First Closing Date of any event which results in either (i) the legal or
beneficial ownership of more than 50% of the outstanding shares of Voting Stock
of the Guarantor being owned by any Person or Control Group other than the
Designated Shareholders or (ii) any Person or Control Group other than the
Designated Shareholders having the power to elect, appoint or cause the election
or appointment of, at least a majority of the members of the Board of Directors
of the Guarantor through beneficial ownership of capital stock of the Guarantor
or otherwise.
SECTION 9. DEFINITIONS.
In addition to the terms defined in the Note Agreement or elsewhere
in this Agreement, and unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined:
"Applicable Accounting Procedures" shall mean the accounting
procedures of the Massachusetts Department of Public Utilities if required and,
if not, generally accepted accounting principles applicable at such time.
"Disposition" is defined in Section 7.8(a).
"Group Current Debt" shall mean Current Debt of the Guarantor and
the Restricted Group, determined on a consolidated basis eliminating
intercompany items.
"Group Funded Debt" shall mean Funded Debt of the Guarantor and the
Restricted Group, determined on a consolidated basis eliminating intercompany
items.
"Restricted Group" shall mean collectively the Company, its
Restricted Subsidiaries and the Significant Subsidiaries.
"Significant Subsidiary" shall mean any subsidiary of the Guarantor
(other than the Company and its Restricted Subsidiaries) (i) which is organized
under the laws of the United States or any State thereof; (ii) which conducts
substantially all of its business and has substantially all of its assets within
the United States; and (iii) of which more than 80% (by number of votes) of the
Voting Stock is beneficially owned, directly or indirectly, by the Guarantor.
"Wholly-owned Significant Subsidiary" shall mean a Significant
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Funded Debt and Current
Debt shall be owned by the Guarantor and/or on or more of its Wholly-owned
Significant Subsidiaries.
SECTION 10. JURISDICTION AND SERVICE IN RESPECT OF GUARANTOR.
The Guarantor hereby irrevocably submits to the jurisdiction of the
courts of the Commonwealth of Massachusetts and of the courts of the United
States of America having jurisdiction in the Commonwealth of Massachusetts for
the purpose of any legal action or proceeding in any such court with respect to,
or arising out of, this Agreement. The Guarantor hereby designates and appoints
the Secretary of State of Massachusetts, and its successors as the Guarantor's
lawful agent in the Commonwealth of Massachusetts upon which may be served and
which may accept and acknowledge, for and on behalf of the Guarantor, all
process in any action, suit or proceeding that may be brought against the
Guarantor in any of the courts referred to in this Section, and agrees that such
service of process, or the acceptance or acknowledgment thereof by said agent,
shall be valid, effective and binding in every respect. If any Noteholder shall
cause process to be served upon the Guarantor by being served upon such agent, a
copy of such process shall also be mailed to the Guarantor by United States
registered mail, first class postage prepaid, at 47 Old Yarmouth Road, Hyannis,
Massachusetts 02601-0326, Attention: President or to such other address as the
Guarantor may in writing designate to the Note Purchaser or to a subsequent
Noteholder.
SECTION 11. SUCCESSORS AND ASSIGNS.
All covenants and agreements contained in this Agreement by or on
behalf of the Guarantor shall be binding upon the Guarantor and its successors
and assigns and shall inure to the benefit of the Note Purchaser and each and
every Noteholder.
SECTION 12. NOTICES.
All notices, requests, demands, waivers or other communications
required or contemplated hereby, except as otherwise provided in Section 10
hereof, shall be given or made as provided in Section 9.6 of the Note Agreement.
SECTION 13. GOVERNING LAW.
This Agreement and all rights arising hereunder shall be governed by
and construed in accordance with Massachusetts law.
SECTION 14. AMENDMENTS, WAIVERS AND CONSENTS.
14.1. Consent Required. Any term, covenant, agreement or condition
of this Agreement may, with the consent of the Guarantor, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Guarantor shall have obtained
the consent in writing of the holders of at least 66-2/3% in aggregate principal
amount of outstanding Notes; provided that without the written consent of the
holders of all of the Notes then outstanding, no such waiver, modification,
alteration or amendment shall be effective which will reduce the scope of the
guaranty set forth in this Agreement or amend the requirements of Section 1,
Section 2, Section 3, Section 8 or this Section 14.
14.2. Solicitation of Noteholders. So long as there are any Notes
outstanding, the Guarantor will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each Noteholder (irrespective of the amount of
Notes then owned by it) shall be informed thereof by the Guarantor and shall be
afforded the opportunity of considering the same and shall be supplied by the
Guarantor with sufficient information to enable it to make an informed decision
with respect thereto. The Guarantor will not, directly or indirectly, payor
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any Noteholder as consideration for or as an
inducement to entering into by any Noteholder of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently offered, on the same terms, ratably to all Noteholders then
outstanding.
14.3. Effect of Amendment or Waiver. Any such amendment or waiver
shall apply equally to all of the Noteholders and shall be binding upon them,
upon each future Noteholder and upon the Guarantor, whether or not such Note
shall have been marked to indicate such amendment or waiver. No such amendment
or waiver shall extend to or affect any obligation not expressly amended or
waived or impair any right consequent thereon.
IN WITNESS WHEREOF, the Guarantor has caused this Agreement to be
duly executed under seal as of the day and year first above written.
BARNSTABLE HOLDING CO., INC.
By: /s/ George D. Wadsworth
--------------------------------
George D. Wadsworth, President