ETOWN CORPORATION EXHIBIT 4(C)
$12,000,000
6.79% Senior Notes due December15, 2007
----------------
NOTE PURCHASE AGREEMENT
----------------
Dated as of December15, 1997
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION1. AUTHORIZATION OF NOTES 1
SECTION2. SALE AND PURCHASE OF NOTES 1
SECTION3. CLOSINGS 1
SECTION4. CONDITIONS TO EACH CLOSING 2
Section4.1. Representations and Warranties 2
Section4.2. Performance; No Default 2
Section4.3. Compliance Certificates 2
Section4.4. Opinions of Counsel 2
Section4.5. Purchase Permitted by Applicable Law, etc 3
Section4.6. Governmental Approvals 3
Section4.7. Payment of Special Counsel Fees 3
Section4.8. Private Placement Number 3
Section4.9. Changes in Corporate Structure 3
Section4.10. Proceedings and Documents 3
SECTION5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 4
Section5.1. Organization; Power and Authority 4
Section5.2. Authorization, etc 4
Section5.3. Disclosure 4
Section5.4. Organization and Ownership of Shares of Subsidiaries 4
Section5.5. Financial Statements 5
Section5.6. Compliance with Laws, Other Instruments, etc 5
Section5.7. Governmental Authorizations, etc 5
Section5.8. Litigation; Observance of Statutes and Orders 5
Section5.9. Taxes 6
Section5.10. Title to Property; Leases 6
Section5.11. Licenses, Permits, etc 6
Section5.12. Compliance with ERISA 6
Section5.13. Private Offering by the Company 7
Section5.14. Use of Proceeds; Margin Regulations 7
Section5.15. Existing Indebtedness 8
Section5.16. Foreign Assets Control Regulations, etc 8
Section5.17. Status under Certain Statutes 8
SECTION6. REPRESENTATIONS OF THE PURCHASER 8
Section6.1. Purchase for Investment 8
Section6.2. Source of Funds 8
SECTION7. INFORMATION AS TO COMPANY 10
Section7.1. Financial and Business Information 10
Section7.2. Officers Certificate 12
Section7.3. Inspection 13
SECTION8. PREPAYMENT OF THE NOTES 13
Section8.1. Prepayments 13
Section8.2. Optional Prepayments with Make-Whole Amount 13
Section8.3. Allocation of Partial Prepayments 14
Section8.4. Maturity; Surrender, etc 14
Section8.5. Purchase of Notes 14
Section8.6. Make-Whole Amount 14
SECTION9. AFFIRMATIVE COVENANTS 16
Section9.1. Compliance with Law 16
Section9.2. Insurance 16
Section9.3. Maintenance of Properties 16
Section9.4. Payment of Taxes 16
Section9.5. Corporate Existence, etc.; Maintenance of Ownership of
Elizabethtown Water Company 17
SECTION10. NEGATIVE COVENANTS 17
Section10.1. Transactions with Affiliates 17
Section10.2. Merger, Consolidation, etc 17
Section10.3. Fixed Charges Coverage Ratio 18
Section10.4. Consolidated Common Shareholders Equity 18
Section10.5. Consolidated Debt 18
Section10.6. Liens 18
Section10.7. Sale of Assets of Elizabethtown Water Company and The
Mount Xxxxx Water Company 18
Section10.8. Restricted Investments 19
SECTION11. EVENTS OF DEFAULT 19
SECTION12. REMEDIES ON DEFAULT, ETC 21
Section12.1. Acceleration 21
Section12.2. Other Remedies 22
Section12.3. Rescission 22
Section12.4. No Waivers or Election of Remedies, Expenses, etc 22
SECTION13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES 22
Section13.1. Registration of Notes 22
Section13.2. Transfer and Exchange of Notes 23
Section13.3. Replacement of Notes 23
SECTION14. PAYMENTS ON NOTES 24
Section14.1. Place of Payment 24
Section14.2. Home Office Payment 24
SECTION15. EXPENSES, ETC 24
Section15.1. Transaction Expenses 24
Section15.2. Survival 25
XXXXXXX00. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT 25
SECTION17. AMENDMENT AND WAIVER 25
Section17.1. Requirements 25
Section17.2. Solicitation of Holders of Notes 25
Section17.3. Binding Effect, etc 26
Section17.4. Notes Held by Company, etc 26
SECTION18. NOTICES 26
SECTION19. REPRODUCTION OF DOCUMENTS 27
SECTION20. CONFIDENTIAL INFORMATION 27
SECTION21. SUBSTITUTION OF PURCHASER 28
SECTION22. MISCELLANEOUS 28
Section22.1. Successors and Assigns 28
Section22.2. Payments Due on Non-Business Days 29
Section22.3. Severability 29
Section22.4. Construction 29
Section22.5. Counterparts 29
Section22.6. Governing Law 29
Signatures 30
SCHEDULEA INFORMATION RELATING TO PURCHASER
SCHEDULEB DEFINED TERMS
SCHEDULE5.4 Subsidiaries of the Company and Ownership of
Subsidiary Stock
SCHEDULE5.15 Existing Indebtedness
EXHIBIT1 Form of 6.79% Senior Note due December15, 2007
EXHIBIT4.4(a) Form of Opinion of Counsel for the Company
EXHIBIT4.4(b) Form of Opinion of Special New York Counsel for
the Company
EXHIBIT4.4(C) Form of Opinion of Special Counsel for the Purchaser
ETOWN CORPORATION
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
6.79% SENIOR NOTES DUE DECEMBER15, 2007
Dated as of
December15, 1997
American General Life Insurance Company
c/o American General Corporation
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Ladies and Gentlemen:
ETOWN CORPORATION, a New Jersey corporation (the Company), agrees with you as
follows:
SECTION1. AUTHORIZATION OF NOTES. The Company will authorize the issue and sale
of $12,000,000 aggregate principal amount of its 6.79% Senior Notes due
December15, 2007 (the Notes, such term to include any such notes issued in
substitution therefor pursuant to Section13 of this Agreement). The Notes shall
be substantially in the form set out in Exhibit1, with such changes therefrom,
if any, as may be approved by you and the Company. Certain capitalized terms
used in this Agreement are defined in ScheduleB; references to a Schedule or an
Exhibit are, unless otherwise specified, to a Schedule or an Exhibit attached to
this Agreement.
SECTION2. SALE AND PURCHASE OF NOTES. Subject to the terms and conditions of
this Agreement, the Company will issue and sell to you and you will purchase
from the Company, at each Closing provided for in Section3, Notes in the
principal amount specified opposite your name in Schedule A with respect to such
Closing at the purchase price of 100% of the principal amount thereof.
SECTION3. CLOSINGS. The sale and purchase of the Notes to be purchased by you
shall occur at the offices of Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, at 10:00 A.M. Chicago time, at not more than three
closings (each a Closing) which shall take place on December22, 1997, January8,
1998 and May15, 1998 or on such other Business Day or Business Days on or prior
to May31, 1998 as may be agreed upon by the Company and you. At each Closing the
Company will deliver to you the Notes to be purchased by you on such date in the
form of a single Note (or such greater number of Notes in denominations of at
least $100,000 as you may request) dated the date of such Closing and registered
in your name (or in the name of your nominee), against delivery by you to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of the Company to account number 2083605002512 at First Union National
Bank, Newark, New Jersey, ABA number 000000000. If at any Closing the Company
shall fail to tender such Notes to you as provided above in this Section3, or
any of the conditions specified in Section4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
SECTION4. CONDITIONS TO EACH CLOSING. Your obligation to purchase and pay for
the Notes to be sold to you at each Closing is subject to the fulfillment to
your satisfaction, prior to or at such Closing, of the following conditions:
Section4.1. Representations and Warranties. The representations and warranties
of the Company in this Agreement shall be correct when made and at the time of
such Closing. Section4.2. Performance; No Default. The Company shall have
performed and complied with all agreements and conditions contained in this
Agreement required to be performed or complied with by it prior to or at such
Closing, and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section5.14), no Default
or Event of Default shall have occurred and be continuing. Section4.3.
Compliance Certificates. (a) Officers Certificate. The Company shall have
delivered to you an Officers Certificate, dated the date of such Closing,
certifying that the conditions specified in Sections4.1, 4.2 and 4.9 have been
fulfilled. (b) Secretarys Certificate. (i) The Company shall have delivered to
you on or prior to the first Closing a certificate certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and this Agreement. (ii) The
Company shall have delivered to you on or prior to each subsequent Closing a
certificate certifying as to no changes to the authorizing resolutions or any of
the other items attached to the Companys certificate delivered in connection
with the first Closing. Section4.4. Opinions of Counsel. You shall have received
opinions in form and substance satisfactory to you, dated the date of such
Closing (a)from Xxxxxx X. Xxxxxxxx, Esq., Secretary of the Company, (b) from
Winthrop, Stimson, Xxxxxx & Xxxxxxx, special New York counsel for the Company,
covering the matters set forth in Exhibits4.4(a) and 4.4(b), respectively, and
covering such other matters incident to the transactions contemplated hereby as
you or your counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to you) and (c)from Xxxxxxx and Xxxxxx, your
special counsel in connection with such transactions, substantially in the form
set forth in Exhibit4.4(c) and covering such other matters incident to such
transactions as you may reasonably request. Section4.5. Purchase Permitted by
Applicable Law, etc. On the date of such Closing your purchase of Notes shall
(i)be permitted by the laws and regulations of each jurisdiction to which you
are subject, without recourse to provisions (such as Section1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii)not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (iii)not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officers
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted. Section4.6.
Governmental Approvals. The Company shall have received all necessary consents,
authorizations and approvals from all Governmental Authorities, if any,
necessary for the execution, delivery and performance by the Company of this
Agreement and the Notes, and any such consent, authorization or approval shall
be final and unappealable. Section4.7. Payment of Special Counsel Fees. Without
limiting the provisions of Section15.1, the Company shall have paid on or before
the first Closing the reasonable fees, charges and disbursements of your special
counsel referred to in Section4.4 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior to the first
Closing. Section4.8. Private Placement Number. A Private Placement number issued
by Standard & Poors CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes. Section4.9. Changes in Corporate Structure.
The Company shall not have changed its jurisdiction of incorporation or been a
party to any merger or consolidation and shall not have succeeded to all or any
substantial part of the liabilities of any other entity, at any time following
the date of the most recent financial statements included as part of the
Memorandum and on or prior to the date of the first Closing. Section4.10.
Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to you and your
special counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
SECTION5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents
and warrants to you that: Section5.1. Organization; Power and Authority. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof. Section5.2. Authorization,
etc. This Agreement and the Notes have been duly authorized by all necessary
corporate action on the part of the Company, and this Agreement constitutes, and
upon execution and delivery thereof each Note will constitute, a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
(i)applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors rights generally and
(ii)general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Section5.3. Disclosure. The
Company, through its agent, PNC Capital Markets, Inc., has delivered to you a
copy of a Confidential Private Placement Memorandum, dated November, 1997 (the
Memorandum), relating to the transactions contemplated hereby. This Agreement,
the Memorandum and the financial statements referred to in Section5.5, taken as
a whole, do not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made. Except as disclosed in
the Memorandum or in the financial statements referred to in Section5.5, since
December31, 1996, there has been no change in the financial condition,
operations, business or properties of the Company or any of its Subsidiaries
except changes that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect. Section5.4. Organization and
Ownership of Shares of Subsidiaries. (a)Schedule5.4 is (except as noted therein)
a complete and correct list of the Companys Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary. (b) All of
the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by the Company or another Subsidiary free and clear of any Lien (except as
otherwise disclosed in Schedule5.4). (c) Each Subsidiary identified in
Schedule5.4 is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each such Subsidiary
has the corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business
it transacts and proposes to transact. Section5.5. Financial Statements. The
consolidated financial statements of the Company and its Subsidiaries (i)
included as part of the Memorandum, and (ii) to be delivered to you prior to the
final Closing pursuant to Section7 (including in each case the related schedules
and notes) fairly present or will fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of their
respective dates and the consolidated results of their operations and cash flows
for their respective periods and have been or will be prepared in accordance
with GAAP consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments). Section5.6. Compliance with Laws,
Other Instruments, etc. The execution, delivery and performance by the Company
of this Agreement and the Notes will not (i)contravene, result in any breach of,
or constitute a default under, or result in the creation of any Lien in respect
of any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other Material agreement or instrument to which the Company or
any Subsidiary is bound or by which the Company or any Subsidiary or any of
their respective properties may be bound or affected, (ii)conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (iii)violate any provision of any
statute or other ruleor regulation of any Governmental Authority applicable to
the Company or any Subsidiary. Section5.7. Governmental Authorizations, etc. No
consent, approval or authorization of, or registration, filing or declaration
with, any Governmental Authority (including, without limitation, the New Jersey
Board of Public Utilities) is required in connection with the execution,
delivery or performance by the Company of this Agreement or the Notes.
Section5.8. Litigation; Observance of Statutes and Orders. (a)Except as
disclosed in the Memorandum, there are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any Subsidiary or any property of the Company or any Subsidiary in any court
or before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect. (b) Neither the Company nor any Subsidiary is in
default under any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
Section5.9. Taxes. The Company and its Subsidiaries have filed all income tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments payable by them, to the extent such taxes and assessments have
become due and payable and before they have become delinquent, except for any
taxes and assessments (i)the amount of which is not individually or in the
aggregate Material or (ii)the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves (if any) in accordance with GAAP. The Federal
income tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service for all fiscal years up to and including the
fiscal year ended December31, 1995. Section5.10. Title to Property; Leases. The
Company and its Subsidiaries have good and sufficient title to their respective
Material properties, including all such properties reflected in the most recent
audited balance sheet referred to in Section5.5 or purported to have been
acquired by the Company or any Subsidiary after said date (except as sold or
otherwise disposed of in the ordinary course of business), except for those
defects in title that, individually or in the aggregate, would not have a
Material Adverse Effect. All Material leases are valid and subsisting and are in
full force and effect in all material respects. Section5.11. Licenses, Permits,
etc. The Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, that are Material, without known conflict with
the rights of others, except for those conflicts that, individually or in the
aggregate, would not have a Material Adverse Effect. Section5.12. Compliance
with ERISA. (a)The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to TitleI or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section3 of ERISA), and no event, transaction or condition
has occurred or exists that would reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to TitleI or IV of ERISA
or to such penalty or excise tax provisions or to Section401(a)(29) or 412 of
the Code, other than such liabilities or Liens as would not be individually or
in the aggregate Material. (b) The accumulated benefit obligation as determined
in accordance with Financial Accounting Standards Board Statement No. 87 under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plans most recently ended plan year is as stated in the Memorandum and in
respect of the 1997 Plan Year, as will be stated in the audited financial
statements to be provided pursuant to Section7.1(b). (c) The Company and its
ERISA Affiliates have not incurred withdrawal liabilities (and are not subject
to contingent withdrawal liabilities) under section4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the aggregate are
Material. (d) The expected postretirement benefit obligation (determined as of
the last day of the Companys most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section4980B of
the Code) of the Company and its Subsidiaries is as disclosed in the Memorandum.
(e) The execution and delivery of this Agreement and the issuance and sale of
the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section406 of ERISA or in connection with which a tax could be
imposed pursuant to section4975(c)(1)(A)- (D) of the Code. The representation by
the Company in the first sentence of this Section5.12(e) is made in reliance
upon and subject to the accuracy of your representation in Section6.2 as to the
sources of the funds to be used to pay the purchase price of the Notes to be
purchased by you. Section5.13. Private Offering by the Company. Neither the
Company nor anyone acting on its behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any person other
than you and not more than thirty-eight (38) other Institutional Investors, each
of which has been offered the Notes at a private sale for investment. Neither
the Company nor anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the registration
requirements of Section5 of the Securities Act. Section5.14. Use of Proceeds;
Margin Regulations. The Company will apply the proceeds of the sale of the Notes
(i) to refinance existing indebtedness and to fund future capital expenditures
and (ii) for investments in water and wastewater systems. No part of the
proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of RegulationG of the Board of Governors of the Federal Reserve System
(12CFR207), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of RegulationT of said Board (12 CFR 220). The Company does not own or
presently intend to carry or purchase any margin stock. As used in this Section,
the terms margin stock and purpose of buying or carrying shall have the meanings
assigned to them in said RegulationG. Section5.15. Existing Indebtedness.
Schedule5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Subsidiaries as of December15, 1997, since
which date there has been no Material change in the amounts, interest rates,
sinking funds, installment payments or maturities of the Indebtedness of the
Company or its Subsidiaries. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Subsidiary and
no event or condition exists with respect to any Indebtedness of the Company or
any Subsidiary the outstanding principal amount of which exceeds $500,000 that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.
Section5.16. Foreign Assets Control Regulations, etc. Neither the sale of the
Notes by the Company hereunder nor its use of the proceeds thereof will violate
the Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto. Section5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.
SECTION6. REPRESENTATIONS OF THE PURCHASER. Section6.1. Purchase for Investment.
You represent that you are purchasing the Notes for your own account or for one
or more separate accounts maintained by you or for the account of one or more
pension or trust funds and not with a view to the distribution thereof, provided
that the disposition of your or their property shall at all times be within your
or their control. You understand that the Notes have not been registered under
the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes. Section6.2. Source of Funds. You represent that at least one
of the following statements is an accurate representation as to each source of
funds (a Source) to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder: (a) the Source is an insurance company general
account within the meaning of Department of Labor Prohibited Transaction Class
Exemption (PTCE) 95-60 (issued July12, 1995) and there is no employee benefit
plan, treating as a single plan, all plans maintained by the same employer or
employee organization, with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such plan,
exceeds ten percent (10%) of the total reserves and liabilities of such general
account (exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with your state of domicile; or (b) the
Source is either (i)an insurance company pooled separate account, within the
meaning of XXXX 00-0 (xxxxxx Xxxxxxx 00, 0000), xx (xx)x bank collective
investment fund, within the meaning of the PTCE 91-38 (issued July 12, 1991)
and, except as you have disclosed to the Company in writing pursuant to this
paragraph (b), no employee benefit plan or group of plans maintained by the same
employer or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment fund; or (c)
the Source constitutes assets of an investment fund (within the meaning of Part
V(b) of the QPAM Exemption) managed by a qualified professional asset manager or
QPAM (within the meaning of PartV(a) of the QPAM Exemption), no employee benefit
plans assets that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of SectionV(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and managed by
such QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of PartI(c) and (g) of the QPAM Exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the definition
of control in SectionV(e) of the QPAM Exemption) owns a 5% or more interest in
the Company and (i)the identity of such QPAM and (ii)the names of all employee
benefit plans whose assets are included in such investment fund have been
disclosed to the Company in writing pursuant to this paragraph (c); or (d) the
Source is a governmental plan; or (e) the Source is one or more employee benefit
plans, or a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in writing
pursuant to this paragraph (e); or (f) the Source does not include assets of any
employee benefit plan, other than a plan exempt from the coverage of ERISA. If a
proposed transferee of the Notes identifies a plan pursuant to paragraph (b),
(c) or (e) above, the Company shall deliver a certificate on or prior to the
date of any transfer of the Notes to such transferee, which certificate shall
either state that (i)it is neither a party in interest (as defined in Title I,
Section3(14) of ERISA) nor a disqualified person (as defined in Section
4975(e)(2) of the Internal Revenue Code of 1986, as amended), with respect to
any plan identified pursuant to paragraphs (b) or (e) above, or (ii)with respect
to any plan, identified pursuant to paragraph (c) above, neither it nor any
affiliate (as defined in SectionV(c) of the QPAM Exemption) has at this time,
and during the immediately preceding one year has exercised the authority to
appoint or terminate said QPAM as manager of the assets of any plan identified
in writing pursuant to paragraph (c) above or to negotiate the terms of said
QPAMs management agreement on behalf of any such identified plans. As used in
this Section6.2, the terms employee benefit plan, governmental plan, party in
interest and separate account shall have the respective meanings assigned to
such terms in Section3 of ERISA.
SECTION7. INFORMATION AS TO COMPANY Section7.1. Financial and Business
Information. The Company shall deliver to each holder of Notes that is an
Institutional Investor: (a) Quarterly Statements promptly, and in any event,
within 60 days after the end of each quarterly fiscal period in each fiscal year
of the Company (other than the last quarterly fiscal period of each such fiscal
year), duplicate copies of, (i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and (ii) consolidated statements
of income, changes in shareholders equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such quarter, setting
forth in each case in comparative form the figures for the corresponding periods
in the previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP applicable to quarterly financial statements generally, and certified
by a Senior Financial Officer as fairly presenting, in all material respects,
the financial position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Companys Quarterly Report on Form 10-Q prepared in compliance with
the requirements therefor and filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of this Section7.1(a); (b) Annual
Statements promptly, and in any event, within 105 days after the end of each
fiscal year of the Company, duplicate copies of, (i) a consolidated balance
sheet of the Company and its Subsidiaries, as at the end of such year, and (ii)
consolidated statements of income, changes in shareholders equity and cash flows
of the Company and its Subsidiaries, for such year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and accompanied by an opinion thereon
of independent certified public accountants of recognized national standing,
which opinion shall state that such financial statements present fairly, in all
material respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a reasonable basis for
such opinion in the circumstances, provided that the delivery within the time
period specified above of the Companys Annual Report on Form 10-K for such
fiscal year (together with the Companys annual report to shareholders, if any,
prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section7.1(b);
(c) SEC and Other Reports promptly upon their becoming available, one copy of
(i)each financial statement, report, notice or proxy statement sent by the
Company or any Subsidiary to public securities holders generally, (ii)each
regular or periodic report, each registration statement that shall have become
effective (without exhibits except as expressly requested by such holder), and
each final prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission, and (iii)a copy of each
Annual Report of each of Elizabethtown Water Company and The Mount Xxxxx Water
Company delivered to the New Jersey Board of Public Utilities; (d) Notice of
Default or Event of Default promptly following, and in any event within five
Business Days after a Responsible Officer becoming aware of, the existence of
any Default or Event of Default, a written notice specifying the nature and
period of existence thereof and what action the Company is taking or proposes to
take with respect thereto; (e) ERISA Matters promptly, and in any event within
five Business Days after a Responsible Officer becoming aware of, any of the
following, a written notice setting forth the nature thereof and the action, if
any, that the Company or an ERISA Affiliate proposes to take with respect
thereto: (i) with respect to any Plan, any reportable event, as defined in
section4043(c) of ERISA and the regulations thereunder, for which notice thereof
has not been waived pursuant to such regulations as then in effect on the date
hereof; or (ii) the taking by the PBGC of steps to institute, or the threatening
by the PBGC of the institution of, proceedings under section4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Plan, or
the receipt by the Company or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or (iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if
such liability or Lien, taken together with any other such liabilities or Liens
then existing, would reasonably be expected to have a Material Adverse Effect;
and (f) Requested Information with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries or relating to
the ability of the Company to perform its obligations hereunder and under the
Notes as from time to time may be reasonably requested by any such holder of
Notes. Section7.2. Officers Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section7.1(a) or Section7.1(b) hereof
shall be accompanied by a certificate of a Senior Financial Officer setting
forth: (a) Covenant Compliance the information (including detailed calculations)
required in order to establish whether the Company was in compliance with the
requirements of Section10.2 through 10.8 hereof, inclusive, during the quarterly
or annual period covered by the statements then being furnished (including with
respect to each such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be, permissible under
the terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and (b) Event of Default a statement that such
officer has reviewed the relevant terms hereof and has made, or caused to be
made, under his or her supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence during
such period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists (including, without
limitation, any such event or condition resulting from the failure of the
Company or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto. Section7.3. Inspection. The
Company shall permit the representatives of each holder of Notes that is an
Institutional Investor: (a) No Default if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Companys officers, and, with the consent of the Company (which consent will not
be unreasonably withheld) to visit the other offices and properties of the
Company and each Subsidiary, all at such reasonable times and as often (but not
more than twice by any such holder within any 12-month period) as may be
reasonably requested in writing; and (b) Default if a Default or Event of
Default then exists, at the expense of the Company to visit and inspect any of
the offices or properties of the Company or any Subsidiary, to examine all their
respective 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 and (if an officer of the Company is
present) their independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
SECTION8. PREPAYMENT OF THE NOTES. Section8.1. Prepayments. The entire
outstanding principal amount of the Notes shall be due on December15, 2007.
Except as set forth in Section8.2, the Notes may not be prepaid prior to
maturity at the option of the Company. Section8.2. Optional Prepayments with
Make-Whole Amount. The Company may, at its option, upon notice as provided
below, prepay at any time all, or from time to time any part of, the Notes, in
an amount not less than $1,000,000 in the case of a partial prepayment, at 100%
of the principal amount so prepaid, and accrued interest thereon to the date of
prepayment, plus the Make-Whole Amount determined for the prepayment date with
respect to such principal amount. The Company will give each holder of Notes
written notice of each optional prepayment under this Section8.2 not less than
30 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date, the aggregate principal amount of the
Notes to be prepaid on such date, the principal amount of each Note held by such
holder to be prepaid (determined in accordance with Section8.3), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date. Section8.3. Allocation of
Partial Prepayments. In the case of each partial prepayment of the Notes, the
principal amount of the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof. Section8.4. Maturity; Surrender,
etc. In the case of each prepayment of Notes pursuant to this Section8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note. Section8.5. Purchase of Notes.
The Company will not and will not permit any Affiliate to purchase, redeem,
prepay or otherwise acquire, directly or indirectly, any of the outstanding
Notes except (a)upon the payment or prepayment of the Notes in accordance with
the terms of this Agreement and the Notes or (b)pursuant to an offer to purchase
made by the Company or an Affiliate pro rata to the holders of all Notes at the
time outstanding upon the same terms and conditions. Any such offer shall
provide each holder with sufficient information to enable it to make an informed
decision with respect to such offer, and shall remain open for at least 10
Business Days. If the holders of more than 25% of the principal amount of the
Notes then outstanding accept such offer, the Company shall promptly notify the
remaining holders of such fact and the expiration date for the acceptance by
holders of Notes of such offer shall be extended by the number of days necessary
to give each such remaining holder at least 10 Business Days from its receipt of
such notice to accept such offer. The Company will promptly cancel all Notes
acquired by it or any Affiliate pursuant to any payment, prepayment or purchase
of Notes pursuant to any provision of this Agreement and no Notes may be issued
in substitution or exchange for any such Notes. Section8.6. Make-Whole Amount.
The term Make-Whole Amount means, with respect to any Note, an amount equal to
the excess, if any, of the Discounted Value of the Remaining Scheduled Payments
with respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings: Called Principal means, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to Section8.2 or has
become or is declared to be immediately due and payable pursuant to Section12.1,
as the context requires. Discounted Value means, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect to such Called
Principal. Reinvestment Yield means, with respect to the Called Principal of any
Note, 0.50% over the yield to maturity implied by (i)the yields reported, as of
10:00 A.M. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as Page 678 on the Dow Xxxxx Markets, a division of Dow & Xxxxx Company,
Telerate Access Service (or such other display as may replace Page 678 on the
Telerate Access Service) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii)if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (a)converting U.S. Treasury xxxx quotations
to bond-equivalent yields in accordance with accepted financial practice and
(b)interpolating linearly between (1)the actively traded U.S. Treasury security
with the maturity closest to and greater than the Remaining Average Life and
(2)the actively traded U.S. Treasury security with the maturity closest to and
less than the Remaining Average Life. Remaining Average Life means, with respect
to any Called Principal, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i)such Called Principal into (ii)the sum
of the products obtained by multiplying (a)the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (b)the
number of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment. Remaining Scheduled
Payments means, with respect to the Called Principal of any Note, all payments
of such Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date, provided that if
such Settlement Date is not a date on which interest payments are due to be made
under the terms of the Notes, then the amount of the next succeeding scheduled
interest payment will be reduced by the amount of interest accrued to such
Settlement Date and required to be paid on such Settlement Date pursuant to
Section8.2 or 12.1. Settlement Date means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid pursuant
to Section8.2 or has become or is declared to be immediately due and payable
pursuant to Section12.1, as the context requires.
SECTION9. AFFIRMATIVE COVENANTS. The Company covenants that so long as any of
the Notes are outstanding: Section9.1. Compliance with Law. The Company will and
will cause each of its Subsidiaries to comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject, including,
without limitation, Environmental Laws, and will obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, provided that such compliance with any such law, ordinance, rule
or regulation by the Company or any Subsidiary shall not be required to the
extent that the applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate proceedings,
the Company or a Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary and such
contest would not reasonably be expected to have a Material Adverse Effect.
Section9.2. Insurance. The Company will and will cause each of its Subsidiaries
to maintain, with financially sound and reputable insurers, insurance with
respect to their respective properties and businesses against such casualties
and contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated. Section9.3. Maintenance of Properties. The Company will and will cause
each of its Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this
Sectionshall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded that such
discontinuance would not, individually or in the aggregate, have a Material
Adverse Effect. Section9.4. Payment of Taxes. The Company will and will cause
each of its Subsidiaries to file all income tax or similar tax returns required
to be filed in any jurisdiction and to pay and discharge all taxes shown to be
due and payable on such returns and all other taxes, assessments, governmental
charges, or levies payable by any of them, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
provided that neither the Company nor any Subsidiary need pay any such tax or
assessment if (i)the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii)the nonpayment of all such taxes and assessments in
the aggregate would not reasonably be expected to have a Material Adverse
Effect. Section9.5. Corporate Existence, etc.; Maintenance of Ownership of
Elizabethtown Water Company. (a)Except as permitted by Section10.2, the Company
will at all times preserve and keep in full force and effect its corporate
existence. Subject to Section 10.7, the Company will at all times preserve and
keep in full force and effect the corporate existence of each of its Utility
Subsidiaries (unless merged into the Company or a Utility Subsidiary) and all
rights and franchises of the Company and its Utility Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
would not, individually or in the aggregate, have a Material Adverse Effect. (b)
The Company will at all times own and hold 100% of the shares of the outstanding
common stock of Elizabethtown Water Company.
SECTION10. NEGATIVE COVENANTS. The Company covenants that so long as any of the
Notes are outstanding: Section10.1. Transactions with Affiliates. The Company
will not and will not permit any Subsidiary to enter into directly or indirectly
any Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Company
or another Subsidiary), except pursuant to the reasonable requirements of the
Companys or such Subsidiarys business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would be obtainable in a
comparable arms-length transaction with a Person not an Affiliate. Section10.2.
Merger, Consolidation, etc. The Company shall not consolidate with or merge with
any other corporation unless: (a) the successor formed by such consolidation or
the survivor of such merger, as the case may be (the Successor Corporation),
shall be a solvent corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia; (b) if
the Company is not the Successor Corporation, such corporation shall have
executed and delivered to each holder of Notes its assumption of the due and
punctual performance and observance of each covenant and condition of this
Agreement and the Notes; and (c) immediately after giving effect to such
transaction: (i) no Default or Event of Default would exist, and (ii) the
Successor Corporation would be in compliance with the provisions of Section10.5
hereof if the ratio specified thereunder were calculated as of the date of such
transaction and after giving effect thereto. Section10.3. Fixed Charges Coverage
Ratio. The Company will not, at the end of any fiscal quarter of the Company,
permit the Fixed Charges Coverage Ratio to be less than 1.5 to 1. Section10.4.
Consolidated Common Shareholders Equity. The Company will not, at any time,
permit Consolidated Common Shareholders Equity to be less than $165,000,000.
Section10.5. Consolidated Debt. The Company will not at the end of any calendar
year permit the ratio of (a)the sum of (i) Consolidated Debt plus (ii)the
aggregate Redeemable Preferred Stock of the Company and its Subsidiaries
outstanding on such date, minus $10,000,000, to (b)the sum of (i) Consolidated
Debt plus (ii)the aggregate Preferred Stock of the Company and its Subsidiaries
outstanding on such date plus (iii)Consolidated Common Shareholders Equity, to
exceed 0.65 to 1. Section10.6. Liens. The Company will not directly or
indirectly create, incur, assume or permit to exist (upon the happening of a
contingency or otherwise) any Consensual Lien on or with respect to any of the
common stock of Elizabethtown Water Company, or any income or profits therefrom,
or assign or otherwise convey any right to receive such income or profits.
Section10.7. Sale of Assets of Elizabethtown Water Company and The Mount Xxxxx
Water Company. The Company will not permit Elizabethtown Water Company or its
Subsidiary, The Mount Xxxxx Water Company, to make any Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset Disposition is in
exchange for consideration having a Fair Market Value at least equal to that of
the property exchanged and is in the best interest of the Company, Elizabethtown
Water Company or Mount Xxxxx Water Company; and (b) immediately after giving
effect to the Asset Disposition, no Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition, the Disposition
Value of all property that was the subject of any Asset Disposition occurring on
or after the date of the Closing would not exceed 25% of Consolidated Assets of
Elizabethtown Water Company as of December31, 1997. If the Net Proceeds Amount
for any Transfer is applied to (i) a Debenture Indenture Application, (ii) a
Debt Prepayment Application, or (iii) a Property Reinvestment Application, then
such Transfer, only for the purpose of determining compliance with subsection
(c) of this Section10.7 as of any date, shall be deemed not to be an Asset
Disposition. Section10.8. Restricted Investments. (a) Limitation. The Company
will not, and will not permit any of its Subsidiaries to, declare, make or
authorize any Restricted Investment unless immediately after giving effect to
such action: (i) the aggregate value of all Restricted Investments of the
Company and its Subsidiaries (valued immediately after such action) would not
exceed $30,000,000; and (ii) no Default or Event of Default would exist. (b)
Investments of Subsidiaries. Each Person which becomes a Subsidiary of the
Company after the date of the Closing will be deemed to have made, on the date
such Person becomes a Subsidiary of the Company, all Restricted Investments of
such Person in existence on such date.
SECTION11. EVENTS OF DEFAULT. An Event of Default shall exist if any of the
following conditions or events shall occur and be continuing: (a) the Company
defaults in the payment of any principal or Make-Whole Amount, if any, on any
Note when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise; or (b) the Company defaults
in the payment of any interest on any Note for more than five Business Days
after the same becomes due and payable; or (c) the Company defaults in the
performance of or compliance with any term contained herein (other than those
referred to in paragraphs (a) and (b) of this Section11) and such default is not
remedied within 30 Business Days; or (d) any representation or warranty made in
writing by or on behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or (e) either (i)the Company or any
Subsidiary is in default (as principal or as guarantor or other surety) in the
payment of any principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at least
$5,000,000 beyond any period of grace provided with respect thereto, or (ii)the
Company or any Subsidiary is in default in the performance of or compliance with
any term of any evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $5,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a consequence
of such default or condition such Indebtedness has become, or has been declared
due and payable before its stated maturity or before its regularly scheduled
dates of payment; or (f) the Company or any Principal Subsidiary (i)is generally
not paying, or admits in writing its inability to pay, its debts as they become
due, (ii)files, or consents by answer or otherwise to the filing against it of,
a petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii)makes
an assignment for the benefit of its creditors, (iv)consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v)is
adjudicated as insolvent or to be liquidated, or (vi)takes corporate action for
the purpose of any of the foregoing; or (g) a court or governmental authority of
competent jurisdiction enters an order appointing, without consent by the
Company or any Principal Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any of its Principal Subsidiaries, or any such
petition shall be filed against the Company or any of its Principal Subsidiaries
and such petition shall not be dismissed within 60 days; or (h) a final judgment
or judgments for the payment of money aggregating in excess of 5% of
Consolidated Total Assets are rendered against one or more of the Company and
its Principal Subsidiaries and are not, within 60 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or (i) if (i)any Plan shall fail to
satisfy the minimum funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section412 of the Code, (ii)a notice of intent
to terminate any Plan shall have been filed with the PBGC or the PBGC shall have
instituted proceedings under ERISA section4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such proceedings, (iii)the
Company or any ERISA Affiliate shall have incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (iv)the Company or any ERISA Affiliate
incurs withdrawal liability in connection with the withdrawal from any
Multiemployer Plan, or (v)the Company or any Subsidiary establishes or amends
any employee welfare benefit plan that provides post-employment welfare benefits
in a manner that would increase the liability of the Company or any Subsidiary
thereunder; provided, however, none of the events described in clauses(i)
through (v) above shall constitute an Event of Default unless any such event or
events described in clauses (i) through (v) above, either individually or
together with any other such event or events, would reasonably be expected to
have a Material Adverse Effect. As used in Section11(i), the terms employee
benefit plan and employee welfare benefit plan shall have the respective
meanings assigned to such terms in Section3 of ERISA.
SECTION12. REMEDIES ON DEFAULT, ETC. Section12.1. Acceleration. (a)If an Event
of Default with respect to the Company described in paragraph (f) or (g) of
Section11 (other than an Event of Default described in clause (i) of paragraph
(f) or described in clause (vi) of paragraph (f) by virtue of the fact that such
clause encompasses clause (i) of paragraph (f)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable. (b) If any
other Event of Default has occurred and is continuing, any holder or holders of
at least 51% in principal amount of the Notes at the time outstanding may at any
time at its or their option, by written notice or notices to the Company,
declare all the Notes then outstanding to be immediately due and payable. (c) If
any Event of Default described in paragraph (a) or (b) of Section11 has occurred
and is continuing, any holder or holders of Notes at the time outstanding
affected by such Event of Default may at any time, at its or their option, by
notice or notices to the Company, declare all the Notes held by it or them to be
immediately due and payable. Upon any Notes becoming due and payable under this
Section12.1, whether automatically or by declaration, such Note will forthwith
mature and the entire unpaid principal amount of such Note, plus (x)all accrued
and unpaid interest thereon and (y)the Make-Whole Amount determined in respect
of such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section12.2. Other Remedies. If any Default or Event of Default has occurred and
is continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise. Section12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) of Section12.1, the Required
Holders, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a)the Company has paid all overdue interest
on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that
are due and payable and are unpaid other than by reason of such declaration, and
all interest on such overdue principal and Make-Whole Amount, if any, and (to
the extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b)all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section17, and
(c)no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this
Section12.3 will extend to or affect any subsequent Event of Default or Default
or impair any right consequent thereon. Section12.4. No Waivers or Election of
Remedies, Expenses, etc. No course of dealing and no delay on the part of any
holder of any Note in exercising any right, power or remedy shall operate as a
waiver thereof or otherwise prejudice such holders rights, powers or remedies.
No right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section15,
the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section12, including, without
limitation, reasonable attorneys fees, expenses and disbursements.
SECTION13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. Section13.1.
Registration of Notes. The Company shall keep at its principal executive office
a register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes. Section13.2. Transfer and Exchange of Notes. Upon
surrender of any Note at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer, 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 and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Companys expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$100,000, provided that if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $100,000. Any transferee of a Note, or purchaser of a participation
therein, shall, by its acceptance of such Note be deemed to make the same
representations to the Company regarding the Note or participation as you have
made pursuant to Section6.2, provided that such entity may (in reliance upon
information provided by the Company, which shall not be unreasonably withheld)
make a representation to the effect that the purchase by such entity of any Note
will not constitute a non-exempt prohibited transaction under Section406(a) of
ERISA. Section13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and (a) in the case
of loss, theft or destruction, of indemnity reasonably satisfactory to it
(provided that if the holder of such Note is, or is a nominee for, you or
another holder of a Note with a minimum net worth of at least $50,000,000, such
Persons own unsecured agreement of indemnity shall be deemed to be
satisfactory), or (b) in the case of mutilation, upon surrender and cancellation
thereof, the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
SECTION14. PAYMENTS ON NOTES. Section14.1. Place of Payment. Subject to
Section14.2, payments of principal, Make-Whole Amount, if any, and interest
becoming due and payable on the Notes shall be made in Westfield, New Jersey at
the principal office of the Company in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction. Section14.2. Home Office Payment. So long as you
or your nominee shall be the holder of any Note, and notwithstanding anything
contained in Section14.1 or in such Note to the contrary, the Company will pay
all sums becoming due on such Note for principal, Make-Whole Amount, if any, and
interest by the method and at the address specified for such purpose below your
name in Schedule A, or by such other method or at such other address as you
shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to
Section14.1. The Company will afford the benefits of this Section14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section14.2.
SECTION15. EXPENSES, ETC. Section15.1. Transaction Expenses. Whether or not the
transactions contemplated hereby are consummated, the Company will pay all costs
and expenses (including reasonable attorneys fees of a special counsel and, if
reasonably required, local or other counsel) incurred by you and each holder of
a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a)the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement or the Notes or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b)the
costs and expenses, including financial advisors fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by you).
Section15.2. Survival. The obligations of the Company under this Section15 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.
XXXXXXX00. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the Notes, the purchase or transfer by you of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of you or any other holder of a
Note. All statements contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.
SECTION17. AMENDMENT AND WAIVER. Section17.1. Requirements. This Agreement and
the Notes may be amended, and the observance of any term hereof or of the Notes
may be waived (either retroactively or prospectively), with (and only with) the
written consent of the Company and the Required Holders, except that (a)no
amendment or waiver of the notice periods in Section8 hereof, any of the
provisions of Section1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to by you in
writing, and (b)no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i)subject to
the provisions of Section12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii)change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii)amend any of Sections 8 (other than the notice
periods therein), 11(a), 11(b), 12, 17 or 20. Section17.2. Solicitation of
Holders of Notes. (a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes. (b) Payment. The Company will not
directly or indirectly pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise, or grant any security,
to any holder of Notes as consideration for or as an inducement to the entering
into by any holder of Notes or any waiver or amendment of any of the terms and
provisions hereof or of the Notes unless such remuneration is concurrently paid,
or security is concurrently granted, on the same terms, ratably to each holder
of Notes then outstanding whether or not such holder consented to such waiver or
amendment. Section17.3. Binding Effect, etc. Any amendment or waiver consented
to as provided in this Section17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term this Agreement and references thereto shall mean
this Agreement as it may from time to time be amended or supplemented.
Section17.4. Notes Held by Company, etc. Solely for the purpose of determining
whether the holders of the requisite percentage of the aggregate principal
amount of Notes then outstanding approved or consented to any amendment, waiver
or consent to be given under this Agreement or the Notes, or have directed the
taking of any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.
SECTION18. NOTICES. All notices and communications provided for hereunder shall
be in writing and sent (a)by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b)by registered or certified mail with return receipt
requested (postage prepaid), or (c)by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent: (i) if to you or your
nominee, to you or it at the address specified for such communications in
Schedule A, or at such other address as you or it shall have specified to the
Company in writing, (ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company in
writing, or (iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of the Treasurer, or at such other address
as the Company shall have specified to the holder of each Note in writing.
Notices under this Section18 will be deemed given only when actually received.
SECTION19. REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating
thereto, including, without limitation, (a)consents, waivers and modifications
that may hereafter be executed, (b)documents received by you at the Closing
(except the Notes themselves), and (c)financial statements, certificates and
other information previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original document
so reproduced. The Company agrees and stipulates that, to the extent permitted
by applicable law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
SECTION20. CONFIDENTIAL INFORMATION. For the purposes of this Section20,
Confidential Information means information delivered to you by or on behalf of
the Company or any Subsidiary in connection with the transactions contemplated
by or otherwise pursuant to this Agreement that is proprietary in nature and
that was clearly marked or labeled or otherwise adequately identified when
received by you as being confidential information of the Company or such
Subsidiary, provided that such term does not include information that (a)was
publicly known or otherwise known to you prior to the time of such disclosure,
(b)subsequently becomes publicly known through no act or omission by you or any
person acting on your behalf, (c)otherwise becomes known to you other than
through disclosure by the Company or any Subsidiary or (d)constitutes financial
statements delivered to you under Section7.1 that are otherwise publicly
available. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to you, provided
that you may deliver or disclose Confidential Information to (i)your directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii)your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section20, (iii)any other
holder of any Note, (iv)any Institutional Investor to which you sell or offer to
sell such Note or any part thereof or any participation therein (if such Person
has agreed in writing prior to its receipt of such Confidential Information to
be bound by the provisions of this Section20), (v)any federal or state
regulatory authority having jurisdiction over you, (vi)the National Association
of Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about your
investment portfolio, or (vii)any other Person to which such delivery or
disclosure may be necessary or appropriate (w)to effect compliance with any law,
rule, regulation or order applicable to you, (x)in response to any subpoena or
other legal process, (y)in connection with any litigation involving or related
to the Company, this Agreement or the Notes to which you are a party or (z)if an
Event of Default has occurred and is continuing, to the extent you may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under your
Notes and this Agreement. Each holder of a Note, by its acceptance of a Note,
will be deemed to have agreed to be bound by and to be entitled to the benefits
of this Section20 as though it were a party to this Agreement. On reasonable
request by the Company in connection with the delivery to any holder of a Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee or any other holder that shall have previously delivered such a
confirmation), such holder will confirm in writing that it is bound by the
provisions of this Section20.
SECTION21. SUBSTITUTION OF PURCHASER. You shall have the right to substitute any
one of your Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which notice shall be
signed by both you and such Affiliate, shall contain such Affiliates agreement
to be bound by this Agreement and shall contain a confirmation by such Affiliate
of the accuracy with respect to it of the representations set forth in Section6.
Upon receipt of such notice, wherever the word you is used in this Agreement
(other than in this Section21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted as
a purchaser hereunder and such Affiliate thereafter transfers to you all of the
Notes then held by such Affiliate, upon receipt by the Company of notice of such
transfer, wherever the word you is used in this Agreement (other than in this
Section21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to you, and you shall have all the rights of an original holder of
the Notes under this Agreement.
SECTION22. MISCELLANEOUS. Section22.1. Successors and Assigns. All covenants and
other agreements contained in this Agreement by or on behalf of any of the
parties hereto bind and inure to the benefit of their respective successors and
assigns (including, without limitation, any subsequent holder of a Note) whether
so expressed or not. Section22.2. Payments Due on Non-Business Days. Anything in
this Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-whole Amount or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the interest
payable on such next succeeding Business Day. Section22.3. Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction. Section22.4.
Construction. Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
Section22.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto. Section22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State. * * * * * If you are in agreement with the foregoing,
please sign the form of agreement on the accompanying counterpart of this
Agreement and return it to the Company, whereupon the foregoing shall become a
binding agreement between you and the Company. Signatures Very truly yours,
ETOWN CORPORATION
By
[Title]
The foregoing is hereby
agreed to as of the
date thereof.
AMERICAN GENERAL LIFE INSURANCE COMPANY
By
Its
INFORMATION RELATING TO PURCHASERS
NAME AND ADDRESS OF PURCHASER
PRINCIPAL AMOUNT OF NOTES TO BE
PURCHASED
AMERICAN GENERAL LIFE INSURANCE COMPANY
c/o American General Corporation
Attention: Investment Xxxxxxxx Xxxxxxxxxx, X00-00
P. O. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
December22, 1997 Closing: $4,000,000
January8, 1998 Closing: $6,000,000
May15, 1998 Closing: $2,000,000
Overnight Mailing Address:
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Facsimile No. (000) 000-0000
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 Etown
Corporation, 6.79% Senior Notes due 2007, PPN269242 B@1, principal or interest)
to:
ABA #000000000
State Street Bank and Trust Company
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: American General Life Insurance Company
AC-0125-880-5
OBI=PPN # and description of payment
Fund Number PA 40
Notices
All notices of payment on or in respect of the Notes and written
confirmation of each such payment to:
American General Life Insurance Company and PA 40
c/o State Street Bank and Trust Company
Insurance Services Custody (AH2)
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Manager Insurance Services
Facsimile Number: (000) 000-0000
Duplicate payment notices and all other correspondences to be addressed as
first provided above. Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
DEFINED TERMS GENERAL PROVISIONS 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
express requirements of this Agreement.
DEFINITIONS As used herein, the
following terms have the respective meanings set forth below or set forth in the
Sectionhereof following such term: Affiliate means, at any time, and with
respect to any Person, any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is under
common Control with, such first Person. As used in this definition, 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 securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an Affiliate is a reference to an
Affiliate of the Company. Asset Disposition means any Transfer except: (a) any
(i) Transfer from a Subsidiary of Elizabethtown Water Company to Elizabethtown
Water Company or a Wholly-Owned Subsidiary of Elizabethtown Water Company; (ii)
Transfer from Elizabethtown Water Company to a Wholly-Owned Subsidiary of
Elizabethtown Water Company; and (iii) Transfer from Elizabethtown Water Company
to a Subsidiary of Elizabethtown Water Company (other than a Wholly-Owned
Subsidiary of Elizabethtown Water Company) or from a Subsidiary of Elizabethtown
Water Company to another Subsidiary of Elizabethtown Water Company (other than a
Wholly-Owned Subsidiary of Elizabethtown Water Company), which in either case is
for Fair Market Value, so long as immediately before and immediately after the
consummation of any such Transfer and after giving effect thereto, no Default or
Event of Default exists; and (b) any Transfer made in the ordinary course of
business and involving only property that is either (i) inventory held for sale
or (ii) pipes and other utility plant assets, equipment, vehicles, fixtures,
supplies or materials no longer required in the operation of the business of
Elizabethtown Water Company or any Subsidiary of Elizabethtown Water Company or
that is worn out, permanently unserviceable or obsolete. Business Day means
(a)for the purposes of Section8.6 only, any day other than a Saturday, a Sunday
or a day on which commercial banks in New York City are required or authorized
to be closed, and (b)for the purposes of any other provision of this Agreement,
any day other than a Saturday, a Sunday or a day on which commercial banks in
Newark, New Jersey or New York, New York are required or authorized to be
closed. Capital Lease means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP. Capital Lease Obligation
means, with respect to any Person and a Capital Lease, the amount of the
obligation of such Person as the lessee under such Capital Lease which would, in
accordance with GAAP, appear as a liability on a balance sheet of such Person.
Closing is defined in Section3. Code means the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time. Company means Etown Corporation, a New Jersey corporation.
Confidential Information is defined in Section20. Consensual Lien means any Lien
that is voluntarily agreed to or consented to by the Company or that has been
granted or created by the Company for the benefit of any other Person.
Consolidated Assets means, at any time, the total assets of the Company and its
Subsidiaries which would be shown as assets on a consolidated balance sheet of
the Company and its Subsidiaries as of such time prepared in accordance with
GAAP, after eliminating all amounts properly attributable to minority interests,
if any, in the stock and surplus of Subsidiaries. Consolidated Common
Shareholders Equity means, at any time, (a) the sum of (i) the par value (or
value stated on the books of the corporation) of the common stock of the Company
and its Subsidiaries plus (ii) the amount of the paid-in capital and retained
earnings of the Company and its Subsidiaries, in each case as such amounts would
be shown on a consolidated balance sheet of the Company and its Subsidiaries as
of such time prepared in accordance with GAAP, provided that there shall be
excluded from this clause(a) treasury stock and common stock subscribed and
unissued, minus (b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Subsidiaries. Consolidated Debt means, as of any date of determination, the
total of all Debt of the Company and its Subsidiaries outstanding on such date,
after eliminating all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP. Consolidated Income Available for Fixed
Charges means, with respect to any period, Consolidated Net Income for such
period plus all amounts deducted in the computation thereof on account of
(a)Fixed Charges and (b)taxes imposed on or measured by income or excess
profits. Consolidated Net Income means, with reference to any period, the income
(or loss) of the Company and its Subsidiaries for such period, before
Distributions paid during such period by the Company and its Subsidiaries (taken
as a cumulative whole excluding Extraordinary Items), as determined in
accordance with GAAP, after eliminating all offsetting debits and credits
between the Company and its Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial statements
of the Company and its Subsidiaries in accordance with GAAP. Consolidated
Operating Revenues means, for any period, the operating revenues of the Company
and its Subsidiaries which would be shown as operating revenues on a
consolidated statement of income of the Company and its Subsidiaries for such
period prepared in accordance with GAAP. Debenture Indenture Application means,
with respect to any Transfer of property, the application by Elizabethtown Water
Company within 365 days of such Transfer of the Net Proceeds Amount with respect
to such Transfer in accordance with Section 5.08 (and the related definitions)
of the Indenture dated as of October15, 1988 between Elizabethtown Water Company
and Citibank, N.A., as trustee, as amended through the date of the first Closing
(or any provision of any other Debenture Indenture which is substantially the
same as such Section 5.08 (and the related definitions)). Debenture Indentures
means (i)the Indentures pursuant to which the Debentures of Elizabethtown Water
Company listed on Schedule 5.15 were issued and are outstanding, and
(ii)substantially similar Indentures pursuant to which future series of the
Debentures of Elizabethtown Water Company may be issued. Debt means, with
respect to any Person, without duplication, (a) its liabilities for borrowed
money; (b) its liabilities for the deferred purchase price of property acquired
by such Person (excluding accounts payable arising in the ordinary course of
business but including, without limitation, all liabilities created or arising
under any conditional sale or other title retention agreement with respect to
any such property); (c) its Capital Lease Obligations; (d) all liabilities for
borrowed money secured by any Lien with respect to any property owned by such
Person (whether or not it has assumed or otherwise become liable for such
liabilities); and (e) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (d) hereof. Debt of any Person
shall include all obligations of such Person of the character described in
clauses (a) through (e) to the extent such Person remains legally liable in
respect thereof notwithstanding that any such obligation is deemed to be
extinguished under GAAP. Debt Prepayment Application means, with respect to any
Transfer of property, the application within 180days of such Transfer (other
than in a Debenture Indenture Application) of cash in an amount equal to the Net
Proceeds Amount with respect to such Transfer to pay Debt of the Subsidiary of
the Company making such Transfer, Elizabethtown Water Company or any
Wholly-Owned Subsidiary (other than Debt owing to the Company, any of its
Subsidiaries or any Affiliate and Debt in respect of any revolving credit or
similar credit facility providing the Company or any of its Subsidiaries with
the right to obtain loans or other extensions of credit from time to time,
except to the extent that in connection with such payment of Debt the
availability of credit under such credit facility is permanently reduced by an
amount not less than the amount of such proceeds applied to the payment of such
Debt). Default means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default. Default Rate means that rate of interest that is the greater of
(i)2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii)2% over the rate of interest publicly announced by
The Bank of New York in New York, New York as its base or prime rate.
Disposition Value means, at any time, with respect to any property (a) in the
case of property that does not constitute Subsidiary Stock, the book value
thereof, valued at the time of such disposition in good faith by the Company,
and (b) in the case of property that constitutes Subsidiary Stock, an amount
equal to that percentage of book value of the assets of the Subsidiary that
issued such stock as is equal to the percentage that the book value of such
Subsidiary Stock represents of the book value of all of the outstanding capital
stock of such Subsidiary (assuming, in making such calculations, that all
Securities convertible into such capital stock are so converted and giving full
effect to all transactions that would occur or be required in connection with
such conversion) determined at the time of the disposition thereof, in good
faith by the Company. Distribution means, in respect of any corporation,
association or other business entity dividends paid on Preferred Stock of such
corporation, association or other business entity (except distributions in such
stock or other equity interest). Environmental Laws means any and all Federal,
state, local, and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or governmental restrictions relating to pollution and the protection
of the environment or the release of any materials into the environment,
including but not limited to those related to hazardous substances or wastes,
air emissions and discharges to waste or public systems. ERISA means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect. ERISA Affiliate means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section414 of the Code. Event of Default is defined in Section11. Exchange
Act means the Securities Exchange Act of 1934, as amended. Extraordinary Items
shall mean extraordinary items as defined and determined in accordance with
GAAP. Fair Market Value means, at any time and with respect to any property, the
sale value of such property that would be realized in an arms-length sale at
such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell). Fixed Charges means,
with respect to any period, the sum of (a)Interest Charges for such period plus
(b)Lease Rentals for such period. Fixed Charges Coverage Ratio means, at the end
of any fiscal quarter of the Company, the ratio of (a) Consolidated Income
Available for Fixed Charges for the period of four consecutive fiscal quarters
ending at the end of such fiscal quarter, to (b)the sum of (i)Fixed Charges for
such period plus (ii)Distributions paid during such period by the Company and
its Subsidiaries. GAAP means generally accepted accounting principles as in
effect from time to time in the United States of America. Governmental Authority
means (a) the government of (i) the United States of America or any State or
other political subdivision thereof, or (ii) any jurisdiction in which the
Company or any Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government. Guaranty
means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing (whether by reason of
being a general partner of a partnership or otherwise) any Indebtedness,
dividend or other obligation of any other Person in any manner, whether directly
or indirectly, including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person: (a) to purchase such
Indebtedness or obligation or any property constituting security therefor; (b)
to advance or supply funds (i) for the purchase or payment of such indebtedness
or obligation, or (ii) to maintain any working capital or other balance sheet
condition or any income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation; (c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or (d) otherwise to assure the owner of such
Indebtedness or obligation against loss in respect thereof. In any computation
of the Indebtedness or other liabilities of the obligor under any Guaranty, the
Indebtedness or other obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor. holder means, with respect to
any Note, the Person in whose name such Note is registered in the register
maintained by the Company pursuant to Section13.1. Indebtedness with respect to
any Person means, at any time, without duplication, (a) its liabilities for
borrowed money and its redemption obligations in respect of mandatorily
Redeemable Preferred Stock; (b) its liabilities for the deferred purchase price
of property acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or arising
under any conditional sale or other title retention agreement with respect to
any such property); (c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; (d) all liabilities for
borrowed money secured by any Lien with respect to any property owned by such
Person (whether or not it has assumed or otherwise become liable for such
liabilities); (e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing obligations
for borrowed money); (f) Swaps of such Person; and (g) any Guaranty of such
Person with respect to liabilities of a type described in any of clauses (a)
through (f) hereof. Institutional Investor means (a)any original purchaser of a
Note, (b)any holder of a Note holding more than 10% of the aggregate principal
amount of the Notes then outstanding, and (c)any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer holding Notes
other than in trading accounts, or any other similar financial institution or
entity, regardless of legal form. Interest Charges means, with respect to any
period, the sum (without duplication) of the following (in each case,
eliminating all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP): (a)all interest in respect of Debt of the
Company and its Subsidiaries (including imputed interest on Capital Lease
Obligations) to the extent deducted in determining Consolidated Net Income for
such period, together with all interest capitalized or deferred during such
period and not deducted in determining Consolidated Net Income for such period,
and (b)all debt discount and expense amortized or required to be amortized in
the determination of Consolidated Net Income for such period. Lease Rentals
means, with respect to any period, the sum of the minimum amount of rental and
other obligations required to be paid during such period by the Company or any
Subsidiary as lessee under all leases of real or personal property (other than
(i)any leases with annual rentals that do not exceed $10,000 in the case of any
single lease and $100,000 in the aggregate for all such leases excluded pursuant
to this clause (i), and (ii) Capital Leases), excluding any amounts required to
be paid by the lessee (whether or not therein designated as rental or additional
rental) (a)which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b)which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee. Lien means, with respect to any Person,
any mortgage, lien, pledge, charge, security interest or other encumbrance, or
any interest or title of any vendor, lessor, lender or other secured party to or
of such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person
(including in the case of stock, stockholder agreements, voting trust agreements
and all similar arrangements). Make-Whole Amount is defined in Section8.6.
Material means material in relation to the business, operations, affairs,
financial condition, assets, or properties of the Company and its Subsidiaries
taken as a whole. Material Adverse Effect means a material adverse effect on
(a)the business, operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries taken as a whole, or (b)the ability of the
Company to perform its obligations under this Agreement and the Notes, or (c)the
validity or enforceability of this Agreement or the Notes. Memorandum is defined
in Section5.3. Multiemployer Plan means any Plan that is a multiemployer plan
(as such term is defined in section4001(a)(3) of ERISA). Net Proceeds Amount
means, with respect to any Transfer of any Property by any Person, an amount
equal to the difference of (a) the aggregate amount of the consideration (valued
at the Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer, minus (b)
all ordinary and reasonable out-of-pocket costs and expenses actually incurred
by such Person in connection with such Transfer. Notes is defined in Section1.
Officers Certificate means a certificate of a Senior Financial Officer or of any
other officer of the Company whose responsibilities extend to the subject matter
of such certificate. PBGC means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto. Person means an
individual, partnership, corporation, limited liability company, association,
trust, unincorporated organization, or a government or agency or political
subdivision thereof. Plan means an employee benefit plan (as defined in
section3(3) of ERISA) that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability. Preferred Stock means, in respect of any corporation,
shares of the capital stock of such corporation that are entitled to preference
or priority over any other shares of the capital stock of such corporation in
respect of payment of dividends or distribution of assets upon liquidation.
Principal Subsidiary means any Subsidiary for which either (i)total assets equal
or exceed 30% of Consolidated Assets or (ii)operating revenues for the
immediately preceding four fiscal quarters equal or exceed 30% of Consolidated
Operating Revenues for such period. property or properties means, unless
otherwise specifically limited, real or personal property of any kind, tangible
or intangible, xxxxxx or inchoate. Property Reinvestment Application means, with
respect to any Transfer of property, the satisfaction of each of the following
conditions: (a) the application within 180days of such Transfer (other than in a
Debenture Indenture Application) of an amount equal to the Net Proceeds Amount
with respect to such Transfer to the acquisition by the Subsidiary of the
Company making such Transfer, Elizabethtown Water Company or a Wholly-Owned
Subsidiary of utility property of such Subsidiary to be used in the ordinary
course of business of such Subsidiary and which has a Fair Market Value (after
deduction for any Liens attributable thereto) at least equal to the Disposition
Value of the property sold; and (b) the Company shall have delivered a
certificate of a Responsible Officer of the Company to each holder of a Note
referring to Section10.7 and identifying the property that was the subject of
such Transfer if such Transfer shall have resulted in a Net Proceeds Amount
greater than $500,000, the Disposition Value of such property, and the nature,
terms, amount and application of the proceeds from the Transfer. QPAM Exemption
means Prohibited Transaction Class Exemption 84-14 issued by the United States
Department of Labor. Redeemable means, with respect to the capital stock of any
Person, each share of such Persons capital stock that is: (a) redeemable,
payable or required to be purchased or otherwise retired or extinguished, or
convertible into Debt of such Person (i)at a fixed or determinable date, whether
by operation of sinking fund or otherwise, (ii)at the option of any Person other
than such Person, or (iii)upon the occurrence of a condition not solely within
the control of such Person; or (b) convertible into other Redeemable capital
stock. Required Holders means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates). Responsible Officer means any
Senior Financial Officer and any other officer of the Company with
responsibility for the administration of the relevant portion of this agreement.
Restricted Investments means all investments in cash in the common equity
interests of Persons which are not primarily engaged in the generation,
distribution or sale of electric energy or natural gas or the distribution or
sale of water, or the furnishing of communications services, or water treatment
and analysis services, or in the treatment of wastewater. Security shall have
the same meaning as in Section 2(a)(1) of the Securities Act. Securities Act
means the Securities Act of 1933, as amended from time to time. Senior Financial
Officer means the chief financial officer, principal accounting officer,
treasurer or controller of the Company. Subsidiary means, as to any Person, any
corporation, association, limited liability company, or other business entity (a
Business Entity) in which such Person and/or one or more of its Subsidiaries own
directly or indirectly a majority of (a)the combined voting power of all classes
of voting stock having general voting power under ordinary circumstances to
elect a majority of the directors of such Business Entity, if it is a
corporation, (b)the capital interest or profits interest of such Business
Entity, if it is a partnership, joint venture or similar entity or (c)the
beneficial interest of such Business Entity, if it is a trust, association or
other unincorporated organization. Unless the context otherwise clearly
requires, any reference to a Subsidiary is a reference to a Subsidiary of the
Company. Subsidiary Stock means, with respect to any Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person. Swaps means, with
respect to any Person, payment obligations with respect to interest rate swaps,
currency swaps and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency. For the purposes of
this Agreement, the amount of the obligation under any Swap shall be the amount
determined in respect thereof as of the end of the then most recently ended
fiscal quarter of such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such determination,
if any agreement relating to such Swap provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount so determined.
Transfer means, with respect to any Person, any transaction in which such Person
sells, conveys, transfers or leases (as lessor) any of its property, including,
without limitation, Subsidiary Stock. For purposes of determining the
application of the Net Proceeds Amount in respect of any Transfer, the Company
may designate any Transfer as one or more separate Transfers each yielding a
separate Net Proceeds Amount. In any such case, the Disposition Value of any
property subject to each such separate Transfer shall be determined by ratably
allocating the aggregate Disposition Value of all property subject to all such
separate Transfers to each such separate Transfer on a proportionate basis.
Utility Subsidiary means any Subsidiary of the Company that is generally subject
to regulation by the New Jersey Board of Public Utilities or any other public
service commission, public utility commission or similar regulatory authority in
the United States of America or any State or other political subdivision
thereof. Wholly-Owned Subsidiary means any Subsidiary of Elizabethtown Water
Company all of the equity interests (except directors qualifying shares) and
voting interests are owned by any one or more of Elizabethtown Water Company and
Elizabethtown Water Companys other Wholly-Owned Subsidiaries.
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE
TRANSFERRED IN VIOLATION THEREOF.
ETOWN CORPORATION
6.79% SENIOR NOTE DUE DECEMBER15, 2007
No. R-[_______] [Date] $[__________] PPN 269242 B@1 FOR VALUE RECEIVED, the
undersigned, ETOWN CORPORATION (herein called the Company), a corporation
organized and existing under the laws of the State of New Jersey, hereby
promises to pay to [_____________________] or registered assigns, the principal
sum of [______________] DOLLARS on December15, 2007 with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a)on the unpaid balance
thereof at the rate of 6.79% per annum from the date hereof, payable
semiannually, on the fifteenth day of June and December in each year, commencing
with the June15 or December15 next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b)to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i)8.79% or (ii)2% over the rate of interest publicly announced by The Bank
of New York from time to time in New York, New York as its base or prime rate.
Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America in
Westfield, New Jersey at the principal office of the Company in such
jurisdiction or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreement referred to below. This Note is one of a series of Senior Notes
(herein called the Notes) issued pursuant to the Note Purchase Agreement, dated
as of December15, 1997 (as from time to time amended, the Note Purchase
Agreement), between the Company and American General Life Insurance Company and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, (i)to have agreed to the confidentiality provisions set
forth in Section20 of the Note Purchase Agreement and (ii)to have made the
representation set forth in Section6.2 of the Note Purchase Agreement, provided
that such holder may (in reliance upon information provided by the Company,
which shall not be unreasonably withheld) make a representation to the effect
that the purchase by such holder of any Note will not constitute a non-exempt
prohibited transaction under Section406(a) of ERISA. This Note is a registered
Note and, as provided in the Note Purchase Agreement, upon surrender of this
Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such
holders attorney duly authorized in writing, a new Note for a like principal
amount will be issued to, and registered in the name of, the transferee. Prior
to due presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary. This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise. If an Event of
Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable
in the manner, at the price (including any applicable Make-Whole Amount) and
with the effect provided in the Note Purchase Agreement. This Note shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State.
ETOWN CORPORATION
By
[Title:]
FORM OF OPINION OF COUNSEL
TO THE COMPANY
Each closing opinion of Xxxxxx X. Xxxxxxxx, Esq., counsel for the Company, which
is called for by Section4.4 of the Note Purchase Agreement, shall be dated the
date of the respective Closing and addressed to you, shall be satisfactory in
scope and form to you and shall be to the effect that:
1. The Company is a corporation, duly incorporated, validly existing and
in good standing under the laws of the State of New Jersey, has the corporate
power and the corporate authority to execute and perform the Note Purchase
Agreement and to issue the Notes and has the full corporate power and the
corporate 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. Each Subsidiary of the Company is a corporation or other legal entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly licensed or qualified as a foreign
corporation or other legal entity and is in good standing 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
and all of the issued and outstanding shares of capital stock of each such
Subsidiary have been duly issued, are fully paid and nonassessable and are owned
by the Company, by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
3. The Note Purchase Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes valid contract of the Company.
4. The Notes have been duly authorized by all necessary corporate action
on the part of the Company, have been duly executed and delivered by the Company
and constitute valid obligations of the Company.
5. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any New Jersey governmental body
(including, without limitation, the New Jersey Board of Public Utilities), is
necessary in connection with the execution, delivery and performance of the Note
Purchase Agreement or the Notes.
6. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Note Purchase Agreement do not conflict with
any New Jersey law or any order of any New Jersey court or governmental
authority or agency applicable to or binding on the Company, or 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 Certificate of Incorporation 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.
7. There is no litigation pending or, to the best knowledge of such
counsel, threatened which in such counsels opinion could reasonably be expected
to have a materially adverse effect on the Companys business or assets, or which
would question the validity of the Note Purchase Agreement or the Notes or
impair the ability of the Company to issue and deliver the Notes or to comply
with the provisions of the Note Purchase Agreement. The opinion of Xxxxxx X.
Xxxxxxxx, Esq. shall cover such other matters relating to the sale of the Notes
as you 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.
FORM OF OPINION OF SPECIAL NEW YORK COUNSEL
FOR THE COMPANY
Each closing opinion of Winthrop, Stimson, Xxxxxx & Xxxxxxx, special New
York counsel for the Company, which is called for by Section4.4 of the Note
Purchase Agreement, shall be dated the date of the respective Closing and
addressed to you, shall be satisfactory in scope and form to you and shall be to
the effect that:
1. The Note Purchase Agreement constitutes the legal and binding contract of the
Company, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).
2. The Notes constitute the legal and binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
3. No approval, consent or withholding of objection on the part of, or filing,
registration or qualification with, any governmental body, Federal, state or
local (including, without limitation, the New Jersey Board of Public Utilities),
is necessary in connection with the execution, delivery and performance of the
Note Purchase Agreement or the Notes.
4. The issuance and
sale of the Notes and the execution, delivery and performance by the Company of
the Note Purchase Agreement do not conflict with any law or any order of any
court or governmental authority or agency applicable to or binding on the
Company, or 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
Certificate of Incorporation 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.
5. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreement 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 under the Trust Indenture Act of
1939, as amended.
6. The issuance of the Notes and the use of the proceeds of the sale of the
Notes in accordance with the provisions of and contemplated by the Note Purchase
Agreement do not violate or conflict with Regulations G, T or X of the Board of
Governors of the Federal Reserve System.
7. The Company is not
an investment company, or a company controlled by an investment company, under
the Investment Company Act of 1940, as amended. The opinion of Winthrop,
Stimson, Xxxxxx & Xxxxxxx shall cover such other matters relating to the sale of
the Notes as you 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.
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
_________________, 199__
American General Life Insurance Company
Houston, Texas
Re: $12,000,000 6.79% Senior Notes
Due December15, 2007
of
ETOWN CORPORATION
Ladies and Gentlemen: We have acted as your special counsel in connection
with your purchase on the date hereof of $[__________] aggregate principal
amount of the 6.79% Senior Notes due December15, 2007 (the Notes) of Etown
Corporation, a New Jersey corporation (the Company), issued under and pursuant
to the Note Purchase Agreement as of December15, 1997 (the Note Purchase
Agreement), between the Company and you. In that connection, we have examined
the following: (a) The Note Purchase Agreement; (b) A copy of the Certificate of
Incorporation of the Company and all amendments thereto certified by the
Secretary of State of the State of New Jersey and the Certificate of the
Secretary of State of the State of New Jersey evidencing that the Company is in
good standing in such state (the Good Standing Certificate); (c) A copy of the
By-laws of the Company, as amended to the date hereof, and a copy of the
resolutions adopted by the Board of Directors of the Company with respect to the
authorization of the Note Purchase Agreement, the issuance, sale and delivery of
the Notes and related matters, each as certified by the Secretary of the
Company; (d) The opinion of Xxxxxx X. Xxxxxxxx, Esq., counsel for the Company,
dated the date hereof and delivered responsive to Section4.4(a) of the Note
Purchase Agreement, and the opinion of Winthrop, Stimson, Xxxxxx & Xxxxxxx,
special New York counsel to the Company, dated the date hereof and delivered
responsive to Section 4.4(b) of the Note Purchase Agreement; (e) The Notes
delivered on the date hereof; (f) Such certificates of officers of the Company
and of public officials as we have deemed necessary to give the opinions
hereinafter expressed; and (g) Such other documents and matters of law as we
have deemed necessary to give the opinions hereinafter expressed. We believe
that each opinion referred to in clause (d) above is satisfactory in scope and
form and that you are justified in relying thereon. Our opinion as to matters
referred to in paragraph1 below is based solely upon an examination of the
Certificate of Incorporation, the By-laws and the Good Standing Certificate of
the Company and the Business Corporation Act of the State of New Jersey. We have
also relied, as to certain factual matters, upon appropriate certificates of
public officials and officers of the Company and upon representations of the
Company and you delivered in connection with the issuance and sale of the Notes.
Based upon the foregoing, we are of the opinion that:
1. The Company is a
corporation, validly existing and in good standing under the laws of the State
of New Jersey and has the corporate power and the corporate authority to execute
and deliver the Note Purchase Agreement and to issue the Notes.
2. The Note
Purchase Agreement has been duly authorized by all necessary corporate action on
the part of the Company, has been duly executed and delivered by the Company and
constitutes the legal, valid and binding contract of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors rights generally, and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
3. The Notes have been duly
authorized by all necessary corporate action on the part of the Company, and the
Notes being delivered on the date hereof have been duly executed and delivered
by the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).
4. The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Purchase Agreement 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 under the Trust Indenture Act of 1939, as
amended. Our opinion is limited to the laws of the State of New York, the
Business Corporation Act of the State of New Jersey and the Federal laws of the
United States and we express no opinion on the laws of any other jurisdiction.
Respectfully submitted,
Model Form No. 1 Version of September13, 1994
Model Form No. 1 Version of September13, 1994
Draft of December 19, 1997
1463181
-6-
-5-
-2-
Etown Corporation Note Purchase Agreement
Etown Corporation Note Purchase Agreement
-00-
-00-
-0-
-00-
XXXXXXXXX
(to Note Purchase Agreement)
X-00
X-00
SCHEDULEB
(to Note Purchase Agreement)
E-1-56
E-1-1
EXHIBIT1
(to Note Purchase Agreement)
E-4.4(a)-58
E-4.4(a)-1
EXHIBIT4.4(a)
(to Note Purchase Agreement)
E-4.4(b)-60
E-4.4(b)-1
EXHIBIT4.4(b)
(to Note Purchase Agreement)
E-4.4(c)-64
E-4.4(c)-63
EXHIBIT4.4(c)
(to Note Purchase Agreement)
