EXHIBIT 10.1
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THIRD MODIFICATION AND REAFFIRMATION AGREEMENT
THIS AGREEMENT, dated as of August 28, 2006, by and between
BIRMINGHAM UTILITIES, INC. (the "Borrower"), a Connecticut corporation, having
its chief executive office at 230 Beaver Street, Ansonia, Connecticut,
BIRMINGHAM H2O SERVICES, INC. ("Birmingham H2O ") and EASTERN CONNECTICUT
REGIONAL WATER COMPANY, INC. ("Eastern" and collectively with Birmingham H2O,
the "Guarantor") each a Connecticut corporation having its chief executive
office at 230 Beaver Street, Ansonia, Connecticut and CITIZENS BANK OF
CONNECTICUT, a Connecticut stock savings bank with a place of business at 209
Church Street, New Haven, Connecticut (the "Bank").
WITNESSETH:
WHEREAS, the Borrower executed a Commercial Revolving Promissory Note
dated December 30, 2003 in the original principal amount of $7,000,000.00 (the
"Note"), pursuant to a Commercial Loan Agreement dated November 20, 2002, as
modified by a First Modification and Reaffirmation Agreement dated December 30,
2003, a Second Modification and Reaffirmation Agreement dated as of April 28,
2005, and certain letter agreements dated as of April 21, 2006 and July 26, 2006
(collectively the "Loan Agreement") in connection with a $7,000,000.00 revolving
loan facility (the "Revolving Loan"); and
WHEREAS, the Revolving Loan is unconditionally guaranteed by
Birmingham H2O pursuant to its Guaranty dated December 30, 2003 (the "Birmingham
H2O Guaranty") and by Eastern pursuant to its Guaranty dated as of April 28,
2005 (the "Eastern Guaranty" and collectively with the Birmingham H2O Guaranty,
the "Guaranty"); and
WHEREAS, in connection with the. Revolving Loan, Borrower and/or
Guarantor executed and delivered various other documents, instruments and/or
indemnities to Bank, each as modified by said First Modification and
Reaffirmation Agreement (hereinafter collectively, including without limitation
the Note, the Loan Agreement and the Guaranty, the "Loan Documents"); and
WHEREAS, the Borrower has requested and the Bank has agreed to modify
certain terms of the Revolving Loan and extend the maturity date of the
Revolving Loan; and
WHEREAS, the Bank has agreed to modify the terms and extend the
maturity date of the Revolving Loan on the condition that (a) the Borrower and
Guarantor modify and reaffirm the Loan Documents, (b) on the other conditions
set forth below; and
WHEREAS, Guarantor acknowledges and agrees that it will receive
direct and indirect benefit from the modification and extension of the Revolving
Loan;
NOW, THEREFORE, in consideration of the Revolving Loan and mutual
promises and covenants contained herein, the parties hereto agree as follows:
I. REAFFIRMATION OF NOTE BALANCE
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As of the date hereof, there is $6,405,000.00 of outstanding
principal balance due Bank under the Note. `
II. Modification of Note, LOAN Agreement and Loan Documents
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A. The Note is amended in the following respects:
The Maturity Date provision set forth on page 2 of the
Note is amended to delete the date "April 27, 2006" and to
insert in lieu hereof the date "August 27, 2007".
B. The Loan Agreement is amended in the following respects:
1. Paragraph 1.6, Maturity Date, is amended as follows:
"1.6 - Maturity Date. The Loan is payable in full on August
27, 2007 (the "Revolving Loan Maturity Date")."
2. Paragraph 5.8, Financial Covenants, Subparagraph A, Net
Worth, is amended by deleting the numerical amount
"$12,000,000.00" and inserting in its place the amount
"$11,000,000.00".
3. Paragraph 5.8, Financial Covenants, Subparagraph B, Total
Liabilities to Net Worth, is amended by deleting the phrase
"1.30 to 1.00" and inserting in its place and stead the
phrase "2.25 to 1.00".
C. The Loan Documents are modified to the extent required to
incorporate the changed Maturity Date.
In all other respects, the Note, the Loan Agreement, and the Loan
Documents are ratified and affirmed and continue in full force and effect.
III. MODIFICATION AND REAFFIRMATION OF GUARANTY
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Birmingham H20 and Eastern each hereby consent to the modifications
and extension of the Maturity Date contained herein and hereby ratify and
confirm: (a) that it unconditionally reaffirms to Bank its obligations under
Birmingham H2O Guaranty, and (b) Borrower's Obligations include, without
limitation, the Note and Loan Documents, as modified hereby. Birmingham H2O and
Eastern each acknowledge that its reaffirmation and ratification of the Guaranty
is a material inducement for Bank to enter into this Agreement and that Bank
would not do so without said reaffirmation and ratification. This Agreement, the
Birmingham H20 Guaranty and the Eastern Guaranty are Birmingham H20's and
Eastern's valid and binding obligations, respectively, enforceable against
Birmingham H2O and Eastern in accordance with their terms.
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IV. REAFFIRMATION
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A. Subject to the amendments and modifications set forth in this Agreement
and in the other documents and instruments executed and delivered this day in
connection with the Revolving Loan, (i) each Borrower and Guarantor adopts,
publishes and reaffirms all of the representations, warranties and covenants
(both affirmative and negative) and indemnities and waivers made by such
Borrower or Guarantor, as the case may be, contained in the Loan Agreement and
each of the Loan Documents, and (ii) all of the representations and warranties
set forth in the Loan Agreement and the Loan Documents are true and correct as
if made on behalf of each Borrower and Guarantor on the date hereof.
B. Each Borrower and Guarantor represents, acknowledges and affirms that it
has no claim, defense, offset or counterclaim whatsoever against Bank with
respect to the Note, the Loan Agreement, any Loan Document, or any document
evidencing or securing any Loan or the modifications made herein, and that Bank
is relying on this representation in agreeing to said modifications. Each
Borrower and Guarantor further acknowledges that Bank would not agree to said
modifications unless each Borrower and Guarantor made the representations
contained in this paragraph and elsewhere in this Agreement freely and
willingly, after due consultation with its attorneys. Each Borrower and
Guarantor further represents that this Agreement and all of the Loan Documents
executed by it are its valid and binding obligations and enforceable in
accordance with their terms. Each Borrower and Guarantor further represents that
no Event of Default (as defined in the Loan Agreement or any of the Loan
Documents) has occurred nor, to its knowledge, has there occurred any event or
condition which, with notice or the passage of time or both would constitute an
Event of Default.
C. In furtherance of the immediately preceding paragraph, the Borrower and
Guarantor hereby release and forever discharge the Bank, its officers, agents,
successors and assigns, from any and all claims, actions, causes of action,
obligations and liabilities of any kind known or unknown which the Borrower or
Guarantor or any of them has or may have as of the date hereof whether relating
to the Note, the Loan Agreement or any Loan Document or any of the transactions
contemplated hereby or consummated in connection herewith, or any negotiations
in connection with any of the foregoing.
D. The parties agree that nothing contained herein shall in any way impair
the Note, the Loan Agreement or any other Loan Document, or any document
evidencing or securing the Revolving Loan. The parties farther agree that
nothing contained herein or modified pursuant to this Agreement shall affect or
be construed to release or affect the liability of any other party or parties
who may now or hereafter be liable under, pursuant to, or on account of any Loan
Document.
E. Each Borrower and Guarantor affirms its understanding of the Events of
Default enumerated in Section 6 of the Loan Agreement.
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F. Except as modified by this Agreement and by the other documents and
instruments executed and delivered in connection herewith, the Loan Documents
including all Exhibits and Schedules thereto shall remain unchanged and in full
force and effect. Borrower shall keep and perform all of the terms and
agreements contained therein.
G. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, successors and assigns. This Agreement
shall be construed in accordance with the laws of the State of Connecticut and
may only be amended in writing.
H. This Agreement may be signed in one or more counterparts all of which
shall constitute one document.
IN WITNESS WHEREOF, the parties hereto have caused this Third Modification
and Reaffirmation Agreement to be duly executed as of the day and year first
above written.
Signed, Sealed and Delivered BANK:
In the Presence of: CITIZENS BANK OF CONNECTICUT
By: /s/ Paul M. Canelli
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Paul M. Canelli
Its Vice President
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BORROWER:
BIRMINGHAM UTILITIES, INC.
By: /s/ John S. Tomac
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John S. Tomac
Its President
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BIRMINGHAM H2O SERVICES, INC.
By: /s/ John S. Tomac
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John S. Tomac
Its President
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Personally appeared Paul M. Canelli, Vice President of Citizens Bank
of Connecticut, hereunto duly authorized, signer and sealer of the foregoing
instrument, and acknowledged the same to be his/her free act and deed, and the
free act and deedo of said banking association before me.
Commissioner of the Superior Court Notary
Public
My Commission Expires:
STATE OF CONNECTICUT)
) ss: New Haven, COUNTY OF NEW HAVEN)
Personally appeared, John S. Tomac, President of Birmingham
Utilities, Inc., a Connecticut corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed as such
president and the free ct and deed of said corporation, before me.
POST-CLOSING COMPLIANCE AGREEMENT
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The undersigned, as Borrower and Guarantor, respectively of that
certain loan from CITIZENS BANK OF CONNECTICUT ("Lender") to BIRMINGHAM
UTILITIES, INC. in the original principal amount of SEVEN MILLION AND 00/100
DOLLARS ($7,000,000.00) originally made December 30, 2003, and modified of even
date herewith (the "Loan"), hereby represents, covenants and agrees as follows:
1. The Loan was modified this date by Lender in accordance with
applicable Lender lending practices and upon documents prepared for that purpose
by the law firm of Susman, Duffy & Segaloff, P.C.
2. The undersigned acknowledges that in modifying the Loan, Lender
has required the proper documentation of the Loan in compliance with Lender
required standards and practices for a loan of this type.
3. The undersigned acknowledges the potential for errors and
omissions in the preparation and closing of a transaction of this type, and
agree that good faith and fair dealing oblige it to assist in remedying such
errors and omissions where necessary in order to insure that the documentation
of the Loan conform to the intent of the parties and the requirements of
Lender's practices.
NOW THEREFORE, in order to induce Lender to make and modify the Loan,
and in consideration therefor, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the undersigned does hereby
covenant and agree as follows:
The undersigned shall exercise the utmost good faith and due
diligence in complying with the reasonable requests of Lender, or
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any Holder of the note which evidences the Loan, which Lender or Holder may
hereafter deem necessary and/or appropriate to accomplish the proper
documentation of the Loan, including, without limitation, the execution or
re-execution of any documents as may be reasonably required.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 28th
day of August 2006.
BIRMINGHAM UTILITIES, INC.
By: /s/ John S. Tomac
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John S. Tomac
Its President
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BIRMINGHAM H2O SERVICES, INC.
By: /s/ John S. Tomac
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John S. Tomac
Its President
EASTERN CONNECTICUT REGIONAL
WATER COMPANY, INC.
By: /s/ John S. Tomac
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John S. Tomac
Its President
August 28, 2006
STATE OF CONNECTICUT)
) ss: New Haven,
COUNTY OF NEW HAVEN)
Personally appeared, John S. Tomac, President of Birmingham
Utilities, Inc., a Connecticut corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed as such
president and the free act and deed of said corporation, before me.
Commissioner of the Superior Court
Notary Public Commission Expires: August 28, 2006
STATE OF CONNECTICUT)
) ss: New Haven,
COUNTY OF NEW HAVEN)
Personally appeared, John S. Tomac, President of Birmingham H2O
Services, Inc., a Connecticut corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed as such
president and the free, act and deed of said corporation, before me.
Commissioner of the Superior Court
Notary Public Commission Expires: August 28, 2006
STATE OF CONNECTICUT)
) ss: New Haven,
COUNTY OF NEW HAVEN)
Personally appeared, John S. Tomac, President of Eastern Connecticut
Regional Water of the foregoing instrumert rider
Commissioner of the Superior Court
Notary Public
My Commission Expires: