AMENDMENT AGREEMENT
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This Amendment Agreement ("Agreement") entered into as of the 18th day of
March, 1998, by and among PENNICHUCK CORPORATION, a New Hampshire corporation
with an address of 0 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000 (the
"Borrower"), PENNICHUCK WATER WORKS, INC., a New Hampshire corporation with an
address of 0 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000 (the "Guarantor"), and
FLEET BANK - NH, a bank incorporated under the laws of the State of New
Hampshire with a principal place of business at 0000 Xxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxxxxxxx 00000.
W I T N E S S E T H :
WHEREAS, the Bank and the Borrower entered into a Loan Agreement dated
October 2, 1991 establishing a Revolving Line of Credit Loan (the "Loan" or the
"Line of Credit") in favor of the Borrower, as amended and modified by
agreements dated on or about June 4, 1993, March 23, 1994, May 4, 1995 and July
31, 1996 (the "Loan Agreement");
WHEREAS, the Guarantor executed a Limited Guaranty Agreement dated as of
March 23, 1994, as amended and ratified, in which it guaranteed the payment of
the Loan as governed by and limited in said Limited Guaranty Agreement (the
"Limited Guaranty Agreement");
WHEREAS, the parties have executed certain documents and instruments in
connection with the Loan (collectively the "Loan Documents"); and
WHEREAS, the Borrower, the Guarantor and the Bank have agreed to amend
the Loan Documents to, among other things, reduce the rate of interest under
the Line of Credit and amend the period of loan commitment under the Line of
Credit to June 30, 2000.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants
and agreements therein contained, the receipt and adequacy of which is hereby
acknowledged, the parties covenant, stipulate and agree as follows:
1. Representations and Warranties of the Borrower and the Guarantor.
Each of the Borrower and the Guarantor represents and warrants to the Bank as
follows:
(a) The representations, warranties and covenants of the Borrower and
the Guarantor made in the Loan Documents remain true and accurate and are
hereby reaffirmed as of the date hereof.
(b) Each of the Borrower and the Guarantor has performed, in all
material respects, all obligations to be performed by it to date under the Loan
Documents and no event of default exists thereunder.
(c) Each of the Borrower and the Guarantor is a corporation duly
organized, qualified and existing in good standing under the laws of the State
of New Hampshire and is duly qualified to do business in all jurisdictions in
which the character of the property owned by or the nature of its activities
causes such qualification to be necessary.
(d) The execution, delivery and performance of this Agreement and the
documents relating hereto (the "Amendment Documents") are within the power of
the Borrower and the Guarantor and are not in contravention of law, of either
of the Borrower's or the Guarantor's Articles of Incorporation, By-laws or the
terms of any other documents, agreements or undertaking to which either the
Borrower or the Guarantor is a party or by which either the Borrower or the
Guarantor is bound. No approval of any person, corporation, governmental body
or other entity not provided herewith is a prerequisite to the execution,
delivery and performance by the Borrower or the Guarantor of the Amendment
Documents or any of the documents submitted to the Bank in connection with the
Amendment Documents, or upon execution by the Bank to ensure the validity or
enforceability thereof.
(e) When executed on behalf of the Borrower and the Guarantor, the
Amendment Documents will constitute the legally binding obligations of the
Borrower and the Guarantor, enforceable in accordance with their terms.
2. Amendment to Loan Agreement. The Loan Agreement is hereby amended
as follows:
(a) The phrase "June 30, 1992" appearing in the tenth and eleventh
lines of Article II C of the Loan Agreement is hereby deleted and replaced with
"June 30, 2000".
(b) The second paragraph of Article IV of the Loan Agreement is hereby
deleted and replaced with the following:
"In connection with the Loan, the Borrower agrees to pay the Bank a fee
equal to one-quarter of one percent (1/4%) per annum on the unused
portion of the Line of Credit, such fee to be calculated and billed
quarterly in arrears."
3. Amendment to Amended and Restated Revolving Credit Promissory Note.
The Amended and Restated Revolving Promissory Note made payable by the Borrower
to the Bank in the principal amount of $4,500,000 dated March 23, 1994, as
amended (the "Note") is hereby further amended as follows:
(a) The phrase "on June 4, 1993 and on the date hereof" appearing in
the third line of the second paragraph of the Note is hereby deleted.
(b) The third through and including the eighth paragraphs of the Note
are hereby deleted and replaced by the following:
"Sums hereunder shall bear interest at a variable per annum rate equal to
the Prime Rate (as hereinafter defined). The term Prime Rate means the
variable per annum rate of interest so designated from time to time by
the Bank as its Prime Rate. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate being charged to any
customer. Each time the Prime Rate changes, the interest rate hereunder
shall change. Interest shall be calculated and charged on the basis of
actual days elapsed over a banking year of three hundred sixty (360)
days. Notwithstanding anything herein to the contrary, in the event that
the interest rate hereunder violates any applicable usury or similar
statute, the interest rate shall automatically be deemed to be the
highest rate of interest then permitted.
The Borrower shall have the option to elect (six of which may be utilized
simultaneously) that the interest rate payable hereunder, for one (1)
month periods up to a maximum period of six (6) months (the "Fixed Rate
Interest Period(s)"), in the minimum amount of Five Hundred Thousand
Dollars ($500,000.00) and if greater in minimum additional increments of
One Hundred Thousand Dollars ($100,000), shall be equal to the LIBOR Rate
(as hereinafter defined) plus one and one-quarter percent (1 1/4%) per
annum (the "LIBOR Fixed Rate Option") or the Bank's Costs of Funds (as
hereinafter defined) plus one and one-quarter percent (1 1/4%) per annum
(the "COF Fixed Rate Option"). In the absence of such an election, sums
advanced hereunder shall bear interest at a variable rate equal to the
Prime Rate (the "Floating Rate Option") and said interest rate shall
apply to the entire principal amount outstanding thereunder or such
amount thereof as to which no LIBOR Fixed Rate Option or COF Fixed Rate
Option has been made by the Borrower. Any Fixed Rate Interest Period or
combination of Fixed Rate Interest Periods chosen by the Borrower will be
so structured such that the principal amount to be repaid at maturity
hereunder shall either bear interest at the Prime Rate or bear interest
at a LIBOR Fixed Rate Option having a Fixed Rate Interest Period which
terminates on or before the day such principal repayment is to be made.
Any Fixed Rate Interest Period which would otherwise end on a day which
is not a Banking Day shall be extended to the next Banking Day, as
otherwise determined by the Bank in accordance with the then current
foreign banking practice. At the expiration of each Fixed Rate Interest
Period, any part of the principal amount hereunder bearing interest based
on Fixed Rate Option as to which no notice of renewal has been received
as provided below shall automatically be converted to the Floating Rate
Option. The Bank shall attempt to notify the Borrower of any such
automatic conversion.
The Bank's Cost of Funds shall mean the per annum rate of interest which
the Bank is required to pay, or is offering to pay, for wholesale
liabilities, for the applicable Fixed Rate Interest Period, adjusted for
reserve requirements and such other requirements as may be imposed by
federal, state or local government and regulatory agencies, as determined
by Fleet Treasury Group.
"LIBOR RATE" shall mean the per annum rate as determined by the Bank
(rounded upward, if necessary, to the nearest 1/32 of one percent) as
determined on the basis of the offered rates for deposits in U.S.
dollars, for the applicable Fixed Rate Interest Period, which appears on
the Telerate page 3750 as of 11:00 a.m. London time on the day that is
two (2) London Banking Days preceding the first day of such Fixed Rate
Interest Period; provided, however, if the rate described above does not
appear on the Telerate System on any applicable interest determination
date, the LIBOR Rate shall be the rate (rounded upwards as described
above if necessary) for deposits in dollars for a period substantially
equal to LIBOR Rate Interest Period on the Reuters Page "LIBO" (or such
other page as may replace the LIBO Page on that service for the purpose
of displaying such rates), as of 11:00 a.m. (London Time), on the day
that is two (2) London Banking Days prior to the beginning of such
interest period. "Banking Day" shall mean any date on which commercial
banks are open for business in London, England, Manchester, New Hampshire
and Boston, Massachusetts.
If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for
deposits in U.S. dollars for a period of time comparable to such Fixed
Rate Interest Period which are offered by four major banks in the London
interbank market at approximately 11:00 a.m. London time, on the day that
is two (2) London Banking Days preceding the first day of such Fixed Rate
Interest Period as selected by the Bank's calculation agent. The
principal London office of each of the four major London banks will be
requested to provide a quotation of its U.S. dollar deposit offered rate.
If at least two such quotations are provided, the rate for that date will
be the arithmetic mean of the quotations. If fewer than two quotations
are provided as requested, the rate for that date will be determined on
the basis of the rates quoted for loans in U.S. dollars to leading
European banks for a period of time comparable to such Fixed Rate
Interest Period which are offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the day that is two (2)
London Banking Days preceding the first day of such Fixed Rate Interest
Period. In the event that Bank is unable to obtain any such quotation as
provided above, it will be deemed that LIBOR Rate cannot be determined.
Notwithstanding the foregoing, if as a result of any change in any
foreign or United States law or regulation (or change in the
interpretation thereof) it is determined by Bank that it is unlawful to
maintain a LIBOR Rate based loan, or if any central bank or governmental
authority (foreign or domestic) shall assert that it is unlawful to
maintain a Fixed Rate based loan, then such LIBOR Rate based loan shall
terminate and the Borrower shall have no further right hereunder to elect
the LIBOR Fixed Rate Option. If for any reason a LIBOR Rate based loan is
terminated or prepaid by the Borrower prior to the end of the applicable
LIBOR Rate Interest Period for which the LIBOR Rate is to be in effect,
the Borrower shall, upon demand by Bank, pay to Bank any amounts required
to compensate Bank for any additional losses, costs, or expenses which it
may reasonably incur as a result of such termination or prepayment,
including, without limitation, any losses, costs, or expenses incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by the Bank to fund or maintain such LIBOR Rate based loan. If
the Bank determines that by reason of circumstances affecting the London
interbank market, adequate and reasonable means do not exist for
determining the LIBOR Rate in the relevant amount and for the relevant
maturity are not available to the Bank in the London interbank market,
with respect to a proposed LIBOR Rate based loan, the Bank shall give the
Borrower prompt notice of such determination. Until such notice has been
withdrawn, the Bank shall have no obligation to make LIBOR Rate based
loans, or maintain outstanding LIBOR Rate based loans. In the event that
the Bank can not determine the LIBOR Rate or the LIBOR Rate is
unavailable, all amounts under the Line of Credit shall bear interest at
the Floating Rate Option unless the Borrower elects the COF Fixed Rate
Option.
If, due to any one or more of: (i) the introduction of any applicable law
or regulation or any change in the interpretation or application by any
authority charged with the interpretation or application thereof of any
law or regulation; or (ii) the compliance with any guideline or request
from any governmental central bank or other governmental authority
(whether or not having the force of law), there shall be an increase in
the cost to the Bank of agreeing to make or making, funding or
maintaining LIBOR Rate based loans, including, without limitation,
changes which affect or would affect the amount of capital or reserves
required or expected to be maintained by the Bank, with respect to all or
any portion of the LIBOR Rate based loans, or any corporation controlling
the Bank, on account thereof, then the Borrower from time to time shall,
upon written demand by the Bank, pay the Bank additional amounts
sufficient to indemnify the Bank against the increased cost. A
certificate as to the amount of the increased cost and the reason
therefor submitted to Borrower by the Bank in the absence of manifest
error, shall be conclusive and binding for all purposes.
In order for the Borrower to elect the LIBOR Fixed Rate Option or a COF
Fixed Rate Option, the following conditions must be met:
(i) The Bank shall have received a written notice (the "Fixed Rate
Request") from the Borrower at least two (2) Banking Days prior to
the first day of any Fixed Rate Interest Period requested, such
notice to specify whether it is electing the LIBOR Fixed Rate
Option or the COF Fixed Rate Option, the first day and length of
the Fixed Rate Interest Period (a "Fixed Rate Period") and the
dollar amount that the Borrower elects to bear interest at the
applicable COF or LIBOR Fixed Rate Option; and
(ii) The Bank shall not have determined in good faith that it is unable
to determine the LIBOR Rate or the Cost of Funds in respect of the
requested Fixed Rate Interest Period.
If, at any time (i) the interest rate on the Line of Credit is a fixed
rate, and (ii) the Bank in its sole discretion should determine that
current market conditions can accommodate a prepayment request, the
Borrower shall have the right at any time and from time to time to prepay
the Line of Credit in whole (but not in part) and the Borrower shall pay
to the Bank a yield maintenance fee in an amount computed as follows: The
current rate for United States Treasury securities (bills on a discounted
basis shall be converted to a bond equivalent) with a maturity date
closest to the term chosen pursuant to the applicable COF Fixed Rate
Option or the LIBOR Fixed Rate Option as to which the prepayment is made,
shall be subtracted from the "cost of funds" component of the fixed rate
in effect at the time of prepayment. If the result is zero or a negative
number, there shall be no yield maintenance fee. If the result is a
positive number, then the resulting percentage shall be multiplied by the
amount of the principal balance being prepaid. The resulting amount shall
be divided by 360 and multiplied by the number of days remaining in the
term chosen pursuant to the applicable COF Fixed Rate Option or the LIBOR
Fixed Rate Option as to which the prepayment is made. Said amount shall
be reduced to present value calculated by using the number of days
remaining in the designated term and using the above-referenced United
States Treasury securities rate and the number of days remaining in the
term chosen pursuant to the applicable COF Fixed Rate Option or the LIBOR
Fixed Rate Option as to which the prepayment is made. The resulting
amount shall be the yield maintenance fee due to the Bank upon prepayment
of the fixed rate loan. If the Bank elects to declare the amounts due
hereunder to be immediately due and payable, then any yield maintenance
fee with respect to the Line of Credit shall become due and payable in
the same manner as though the Borrower had exercised such right of
prepayment. The Borrower may prepay any amounts outstanding under this
Note, which bear interest at the Floating Rate Option, in whole or in
part, at any time without the payment of any penalty, premium or charge
of any nature whatsoever. In the event that any such prepayment shall be
made by the Borrower, the amount thereof shall be applied first to
accrued interest and delinquency charges and thereafter to principal. In
the event any such prepayment is made by the Borrower, the amount thereof
will be applied first to accrued interest and delinquency charges and
thereafter to principal in the reverse order of maturity."
4. Guarantor Consent. By execution hereof, the Guarantor consents to
this Agreement and the transactions contemplated hereby and acknowledges and
agrees that its guaranty under the Limited Guaranty Agreement applies to all
amounts advanced or to be advanced under the Loan Agreement, the Note and all
Loan Documents, as amended, in accordance with the terms of the Limited
Guaranty Agreement.
5. Conditions Precedent. The obligations of the Bank hereunder are
subject to delivery by the Borrower and the Guarantor to the Bank of this
Agreement and all other documents set forth on the Closing Agenda attached
hereto as Exhibit A.
6. Loan Documents. The Borrower and the Guarantor shall deliver this
Agreement to the Bank and this Agreement shall be included in the term "the
Loan Documents" in the Loan Agreement. The collateral granted to the Bank
therein, including without limitation, the Limited Guaranty Agreement, shall
continue to secure the Loan as set forth in the Loan Documents, as amended
hereby.
7. Future References. All references to the Loan Documents shall
hereinafter refer to such documents as amended.
8. Continuing Effect. The provisions of the Loan Document, as modified
herein, shall remain in full force and effect in accordance with their terms
and are hereby ratified and confirmed.
9. General. (a) The Borrower and the Guarantor shall execute and
deliver such additional documents and do such other acts as the Bank may
reasonably require to implement the intent of this Agreement fully.
(b) The Borrower shall pay all costs and expenses, including, but not
limited to, attorneys' fees incurred by the Bank in connection with this
Agreement. The Bank, at its option, but without any obligation to do so, may
advance funds to pay any such costs and expenses that are the obligation of the
Borrower and all such funds advanced shall bear interest at the highest rate
provided in the Loan Documents.
(c) This Agreement may be executed in several counterparts by the
Borrower, the Bank and any obligor or guarantor of the Loan Agreement, each of
which shall be deemed an original but all of which together shall constitute
one and the same Agreement.
IN WITNESS WHEREOF, the Bank, the Borrower and the Guarantor have
executed this agreement by their duly authorized officers (if appropriate) as
of the date set forth above.
FLEET BANK - NH
___________________________ By: /s/________________________________
Witness Xxxxx X. Xxxxxxxxxxx, Its Duly
Authorized Vice President
PENNICHUCK CORPORATION
___________________________ By: /s/________________________________
Witness Xxxxxxx X. Xxxxx, Its Duly
Authorized Vice President
PENNICHUCK WATER WORKS, INC.
___________________________ By: /s/________________________________
Witness Xxxxxxx X. Xxxxx, Its Duly
Authorized Vice President
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this __ day of
February, 1998 by Xxxxx X. Xxxxxxxxxxx, duly authorized Vice President of FLEET
BANK - NH, a bank incorporated under the laws of the State of New Hampshire, on
behalf of same.
_______________________________________
Justice of the Peace/Notary Public
My Commission Expires:
Notary Seal
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 18th day of
March, 1998 by Xxxxxxx X. Xxxxx, duly authorized Vice President of PENNICHUCK
CORPORATION, a New Hampshire corporation, on behalf of same.
/s/____________________________________
Justice of the Peace/Notary Public
My Commission Expires:
Notary Seal
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 18th day of
March, 1998 by Xxxxxxx X. Xxxxx, duly authorized Vice President of PENNICHUCK
WATER WORKS, INC., a New Hampshire corporation, on behalf of same.
/s/___________________________________
Justice of the Peace/Notary Public
My Commission Expires:
Notary Seal
