Exhibit 10.1
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THE BROOKLYN UNION GAS COMPANY,
doing business as KEYSPAN ENERGY DELIVERY NEW YORK
$400,000,000
5.60% Senior Unsecured Notes due November 29, 2016
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NOTE PURCHASE AGREEMENT
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Dated as of November 29, 2006
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TABLE OF CONTENTS
SECTION
HEADING
PAGE
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SECTION 1.
AUTHORIZATION OF
NOTES.................................................................1
SECTION 2.
SALE AND PURCHASE OF
NOTES.............................................................1
SECTION 3.
CLOSING................................................................................2
SECTION 4.
CONDITIONS TO
CLOSING..................................................................2
Section 4.1. Representations
and
Warranties.........................................................2
Section 4.2.
Performance; No
Default................................................................2
Section 4.3.
Compliance
Certificates................................................................2
Section 4.4.
Opinions of
Counsel....................................................................3
Section 4.5.
Purchase Permitted By Applicable Law,
Etc..............................................3
Section 4.6.
Sale of Other
Notes....................................................................3
Section 4.7.
Payment of Special Counsel
Fees........................................................3
Section 4.8.
Private Placement
Number...............................................................3
Section 4.9.
Changes in Corporate
Structure.........................................................3
Section 4.10.
Funding
Instructions...................................................................4
Section 4.11.
Proceedings and
Documents..............................................................4
SECTION 5.
REPRESENTATIONS AND
WARRANTIES OF THE
COMPANY..........................................4
Section 5.1.
Organization; Power and
Authority......................................................4
Section 5.2.
Authorization,
Etc.....................................................................4
Section 5.3.
Disclosure.............................................................................4
Section 5.4.
Organization and Ownership of Shares of
Subsidiaries...................................5
Section 5.5.
Financial Statements; Material
Liabilities.............................................5
Section 5.6.
Compliance with Laws, Other Instruments,
Etc...........................................5
Section 5.7.
Governmental Authorizations,
Etc.......................................................6
Section 5.8.
Litigation; Observance of Statutes and
Orders..........................................6
Section 5.9.
Taxes..................................................................................6
Section 5.10.
Title to Property;
Leases..............................................................6
Section 5.11.
Licenses, Permits,
Etc.................................................................7
Section 5.12.
Compliance with
ERISA..................................................................7
Section 5.13.
Private Offering by the
Company........................................................8
Section 5.14. Use
of Proceeds; Margin
Regulations....................................................8
Section 5.15.
Existing
Indebtedness..................................................................8
Section 5.16.
Foreign Assets Control Regulations,
Etc................................................9
Section 5.17.
Status under Certain
Statutes..........................................................9
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i
SECTION 6.
REPRESENTATIONS OF THE
PURCHASERS......................................................9
Section 6.1.
Purchase for
Investment................................................................9
Section 6.2.
Source of
Funds.......................................................................10
SECTION 7.
INFORMATION AS TO
COMPANY.............................................................11
Section 7.1.
Financial and Business
Information....................................................11
Section 7.2.
Officer's
Certificate.................................................................13
Section 7.3.
Visitation............................................................................14
SECTION 8.
PAYMENT AND PREPAYMENT OF THE
NOTES...................................................14
Section 8.1.
Maturity..............................................................................14
Section 8.2.
Optional Prepayments with Make-Whole
Amount...........................................14
Section 8.3.
Allocation of Partial
Prepayments.....................................................15
Section 8.4.
Maturity; Surrender,
Etc..............................................................15
Section 8.5.
Purchase of
Notes.....................................................................15
Section 8.6.
Make-Whole
Amount.....................................................................16
SECTION 9.
AFFIRMATIVE
COVENANTS.................................................................17
Section 9.1.
Payments on the
Notes.................................................................17
Section 9.2.
Compliance with
Law...................................................................17
Section 9.3.
Insurance.............................................................................17
Section 9.4.
Maintenance of
Properties.............................................................18
Section 9.5. Payment of
Taxes......................................................................18
Section 9.6.
Corporate Existence,
Etc..............................................................18
Section 9.7.
Books and
Records.....................................................................18
Section 9.8.
Regulated
Business....................................................................18
SECTION 10.
NEGATIVE
COVENANTS....................................................................18
Section 10.1.
Transactions with
Affiliates..........................................................19
Section 10.2.
Merger, Consolidation,
Etc............................................................19
Section 10.3. Line
of
Business......................................................................19
Section 10.4.
Liens.................................................................................19
Section
10.5. Most
Favored
Noteholder...............................................................20
Section 10.6.
Terrorism Sanctions
Regulations.......................................................20
SECTION 11.
EVENTS OF
DEFAULT.....................................................................20
SECTION 12.
REMEDIES ON DEFAULT,
ETC..............................................................22
Section 12.1.
Acceleration..........................................................................22
Section 12.2.
Other
Remedies........................................................................23
Section 12.3.
Rescission............................................................................23
Section 12.4. No
Waivers or Election of Remedies, Expenses,
Etc.....................................23
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SECTION 13.
REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES.........................................24
Section 13.1.
Registration of
Notes.................................................................24
Section 13.2.
Transfer and Exchange of
Notes........................................................24
Section 13.3.
Replacement of
Notes..................................................................24
Section 13.4.
Agent
Services........................................................................25
SECTION 14.
PAYMENTS ON
NOTES.....................................................................25
Section 14.1.
Place of
Payment......................................................................25
Section 14.2. Home
Office
Payment...................................................................25
SECTION 15.
EXPENSES,
ETC.........................................................................26
Section 15.1.
Transaction
Expenses..................................................................26
Section 15.2.
Survival..............................................................................26
SECTION 16.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT..........................27
SECTION 17.
AMENDMENT AND
WAIVER..................................................................27
Section 17.1.
Requirements..........................................................................27
Section 17.2.
Solicitation of Holders of
Notes......................................................27
Section 17.3.
Binding Effect,
Etc...................................................................28
Section 17.4.
Notes Held by Company,
Etc............................................................28
SECTION 18.
NOTICES...............................................................................28
SECTION 19.
REPRODUCTION OF
DOCUMENTS.............................................................29
SECTION 20.
CONFIDENTIAL
INFORMATION..............................................................29
SECTION 21.
SUBSTITUTION OF
PURCHASER.............................................................30
SECTION 22.
MISCELLANEOUS.........................................................................30
Section 22.1.
Successors and
Assigns................................................................30
Section 22.2.
Payments Due on Non-Business
Days.....................................................31
Section 22.3.
Accounting
Terms......................................................................31
Section 22.4.
Severability..........................................................................31
Section 22.5.
Construction,
Etc.....................................................................31
Section 22.6.
Counterparts..........................................................................31
Section 22.7.
Governing
Law.........................................................................31
Section 22.8.
Jurisdiction and Process; Waiver of Jury
Trial........................................31
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Schedule A -- Information Relating to Purchasers
Schedule B -- Defined Terms
Schedule 5.3 -- Disclosure Documents
Schedule 5.4 -- Subsidiaries of the Company and Ownership of
Subsidiary Stock
Schedule 5.5 -- Financial Statements Schedule
5.15 -- Existing Indebtedness
Exhibit 1 -- Form of 5.60% Senior Unsecured Note due November 29,
2016
Exhibit 4.4(a) -- Form of Opinion of Counsel for the Company
Exhibit 4.4(b) -- Form of Opinion of Special Counsel for the
Company
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THE BROOKLYN UNION GAS COMPANY,
doing business as KEYSPAN ENERGY DELIVERY NEW YORK
One Metrotech Center
Brooklyn, New York 11201-3851
5.60% Senior Unsecured Notes due November 29, 2016
November 29, 2006
TO EACH OF THE PURCHASERS LISTED IN
SCHEDULE A:
Ladies and Gentlemen:
THE
BROOKLYN UNION GAS COMPANY, doing business as KEYSPAN ENERGY
DELIVERY
NEW YORK, a New York corporation (the "Company"), agrees with each of the
purchasers whose
names appear at the end hereof
(each, a "Purchaser" and,
collectively, the "Purchasers") as follows:
Section 1.
AUTHORIZATION OF NOTES.
The
Company will authorize
the issue and sale of
$400,000,000
aggregate
principal amount of
its 5.60% Senior Unsecured Notes due November 29, 2016 (the
"Notes", such term to
include any such notes
issued in substitution
therefor
pursuant to Section 13). The Notes shall be substantially in the form set
forth
in Exhibit 1. Certain
capitalized and other
terms used in this
Agreement are
defined in Schedule B.
References to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
Section 2.
SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each
Purchaser and each
Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount
specified opposite
such Purchaser's name in Schedule A at the purchase price of
100% of the principal amount thereof. The Purchasers' obligations hereunder are
several and not joint
obligations and no
Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation
by any other
Purchaser hereunder.
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Section 3.
CLOSING.
The
sale and purchase of the Notes to be purchased by each Purchaser
shall
occur at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New
York, New York,
at 10:00 a.m., New York, New York time, at a closing (the
"Closing") on November 29, 2006 or on such other Business Day thereafter on or
prior to December
31, 2006, as may be agreed upon by the Company and the
Purchasers. At the Closing, the Company will deliver to each
Purchaser the Notes
to be purchased by such Purchaser in the form of a single
Note (or such greater
number of Notes in
denominations of at
least $100,000 as such
Purchaser may
request), dated the
date of the Closing and registered in such Purchaser's name
(or in the name of its
nominee), against
delivery by such Purchaser 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 00036871 at Citibank, N.A., New York,
New York, ABA # 021000089, Reference: KEDNY/KEDLI Issuance. If at the Closing
the Company shall fail to tender such Notes to any Purchaser as provided above
in this Section 3, or
any of the conditions
specified in Section 4 shall not
have been fulfilled to such Purchaser's satisfaction, such Purchaser shall, at
its election,
be relieved of all further
obligations
under this
Agreement,
without thereby
waiving any rights
such Purchaser
may have by reason of
such
failure or such nonfulfillment.
Section 4.
CONDITIONS TO
CLOSING.
Each
Purchaser's obligation to purchase and pay for the Notes to be sold
to
such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's
satisfaction or waiver, prior to or at the Closing, of the
following conditions:
Section 4.1.
Representations
and Warranties. The representations and
warranties of the
Company in this
Agreement shall be
correct when made and at
the time of the Closing.
Section 4.2. 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 the
Closing and after
giving effect to the
issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Section 5.14) no Default or
Event of Default
shall have occurred and be continuing.
Section 4.3. Compliance
Certificates.
(a) Officer's
Certificate. The
Company shall have
delivered to such
Purchaser an
Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have
been
fulfilled.
(b) Secretary's Certificate. The Company shall have delivered
to such
Purchaser a certificate of its Secretary or Assistant Secretary,
dated the
date
of Closing, certifying
as to the resolutions attached thereto and
other corporate
proceedings relating
to the authorization,
execution and
delivery of the Notes
and this Agreement.
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Section 4.4.
Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance reasonably satisfactory to such
Purchaser, dated
the date of the Closing (a) from John J. Bishar, Jr., Esq., General Counsel to
KeySpan Corporation
and Counsel to the Company, covering the matters set forth
in Exhibit 4.4(a) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably
request (and
the Company
hereby instructs its counsel to deliver such opinion to the
Purchasers), (b) from
Simpson Thacher &
Bartlett LLP, special
counsel for the
Company, covering
the matters set forth
in Exhibit 4.4(b) and
covering such
other matters incident to the transactions contemplated hereby as
such Purchaser
or its counsel may
reasonably request
(and the Company
hereby instructs
its
special counsel to
deliver such opinion to the Purchasers) and (c) from Dewey
Ballantine LLP,
the Purchasers' special counsel, in connection with the
transactions
contemplated hereby
and covering such other matters incident to
such transactions as such Purchaser may reasonably request.
Section 4.5. Purchase
Permitted By Applicable Law, Etc. On the date of the
Closing such
Purchaser's
purchase of Notes
shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is
subject, without
recourse to provisions
(such as section
1405(a)(8) of the New
York Insurance
Law) permitting limited investments by insurance
companies without
restriction
as to the character of the particular investment, (b) not violate
any applicable
law or regulation
(including, without
limitation, Regulation
T, U or X of the
Board of Governors
of the Federal
Reserve System) and (c) not subject such
Purchaser 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 such Purchaser, such Purchaser shall have received
an Officer's
Certificate certifying
as to such matters of fact as such Purchaser may
reasonably specify to
enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the
Company shall
sell to each other
Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at the Closing as
specified in Schedule
A.
Section 4.7.
Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or
before the Closing
the reasonable
fees, charges and disbursements of the Purchasers' special
counsel referred to in
Section 4.4(c) to the extent reflected in a statement of
such counsel rendered
to the Company at least one (1) Business Day prior to the
Closing.
Section 4.8. Private Placement Number. A Private Placement Number
issued by
Standard & Poor's CUSIP Service Bureau (in cooperation
with the SVO) shall
have
been obtained for the Notes.
Section 4.9. Changes
in Corporate
Structure. The Company
shall not have
changed its jurisdiction of incorporation or organization, as applicable, or
been a party to any merger or consolidation or 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 referred to in
Schedule 5.5.
3
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Section 4.10. Funding Instructions. At least three (3) Business Days
prior
to the date
of the Closing, each Purchaser shall have received written
instructions signed by
a Responsible
Officer on letterhead of the Company
confirming the
information
specified in Section 3
including (i) the name
and
address of the transferee bank, (ii) such transferee bank's ABA
number and (iii)
the account name and number into which the purchase price for the
Notes is to be
deposited.
Section 4.11.
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
reasonably
satisfactory to such
Purchaser and its
special counsel,
and such
Purchaser and its
special counsel
shall have
received all such counterpart
originals or certified
or other copies of such documents as such Purchaser or
such special counsel may reasonably request.
Section 5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each Purchaser that:
Section 5.1.
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.
Section 5.2.
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).
Section 5.3.
Disclosure. The
Company, through its agents, J.P. Morgan
Securities Inc. and
RBS Greenwich Capital,
has delivered to each
Purchaser a
copy of a confidential Private Placement Memorandum, dated October, 2006 (the
"Memorandum"), relating to the transactions contemplated hereby.
This Agreement,
the Memorandum and the documents, certificates or other writings delivered to
the Purchasers
by or on behalf of the Company in connection with the
transactions
contemplated hereby
and identified in Schedule 5.3, and the
financial statements listed in Schedule 5.5 (this Agreement,
the Memorandum and
such documents,
certificates
or other writings and
such financial
statements
delivered to each
Purchaser prior to November 18, 2006 being referred to,
collectively, as the
"Disclosure Documents"), taken as a whole, do not
contain
4
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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 Disclosure
Documents, since
December 31, 2005,
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.
Section 5.4.
Organization and Ownership of Shares of Subsidiaries.
(a) Schedule
5.4 is a complete
and correct list of the Company's
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 Schedule 5.4
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.
(c) Each
Subsidiary
identified
in Schedule 5.4 is a corporation,
limited liability
company 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, limited liability
company 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.
Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the consolidated financial statements of
the Company and its
Subsidiaries listed on
Schedule 5.5. All of said financial
statements (including
in each case the
related schedules and notes) fairly
present in all material respects the consolidated financial position of the
Company and its
Subsidiaries
as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash
flows for the
respective periods so
specified and have been 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). The
Company and its Subsidiaries do not have any
Material liabilities
that are not
disclosed on such
financial statements or
otherwise disclosed in the Disclosure Documents.
Section 5.6.
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
5
<PAGE>
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 rule or
regulation of any
Governmental Authority applicable to the Company or any
Subsidiary.
Section 5.7.
Governmental
Authorizations,
Etc. No consent,
approval or
authorization of, or registration, filing or declaration with, any
Governmental
Authority is required in connection with the execution,
delivery or
performance
by the Company
of this Agreement or the Notes, other than those that have
already been obtained and which are in full force and effect;
provided, that no
representation is made
with respect to compliance with foreign securities laws
or the securities or "blue sky" laws of the various States of the
United States.
Section 5.8.
Litigation; Observance of Statutes and Orders.
(a) There are no actions, suits, investigations 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, other
than those described under the heading
"Executive
Summary - Recent
Developments," and
under the heading "Company
Overview -
Environmental
Matters," in the Memorandum and in Schedule 5.3,
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 or
the USA
Patriot Act) of any
Governmental
Authority, which
default or
violation,
individually or in the
aggregate, would
reasonably be expected
to have a
Material Adverse Effect.
Section 5.9. 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 in accordance
with GAAP. The Federal
income tax
liabilities of the
Company and its
Subsidiaries have been
finally determined
(whether by reason of completed audits or the statute of
limitations having run)
for all fiscal years up to and including the fiscal year ended September 30,
1996.
Section 5.10. 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 Section 5.5 or purported to have been acquired by the Company or
6
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any Subsidiary after
said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens
prohibited by
this Agreement, except
for those defects in title and Liens 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.
Section 5.11. Licenses, Permits, Etc. The Company and its
Subsidiaries own
or possess
all licenses, permits, franchises, authorizations, patents,
copyrights,
proprietary software, 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.
Section 5.12. Compliance with
ERISA.
(a) Except as could not reasonably be expected, individually or in
the
aggregate, to have a
Material Adverse
Effect: (i) each
employee benefit
plan
(as defined
in section 3(3) of ERISA), that is, or within the
preceding five (5) 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, has been operated and administered in
compliance with all applicable laws; (ii) neither the Company nor
any ERISA
Affiliate has incurred any liabilities pursuant to ERISA or the penalty
or
excise tax provisions
of the Code for failure to comply with continuation
coverage obligations
mandated by section 4980B of the Code with respect to
any
employee welfare benefit plan (as defined in
section 3(1) of ERISA);
and
(iii) neither the
Company nor any ERISA
Affiliate has
incurred any
liability pursuant
to Title I or IV of
ERISA or the penalty or excise tax
provisions of the Code
relating to any employee pension benefit plan (as
defined in section 3(2) 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 in the imposition of
any
Lien on any of the
rights, properties
or assets of the
Company, in
either case pursuant to Title I or IV of ERISA or to such penalty
or excise
tax
provisions or to section 401(a)(29) or 412 of the Code or
section 4068
of
ERISA.
(b) The present value of the aggregate benefit liabilities
(determined on an "accrued benefit obligations" basis) under each of
the Plans, determined as of the end of such Plan's most recently
ended
plan year on the basis
of the actuarial
assumptions
specified for
funding purposes
in such Plan's most recent actuarial valuation
report, did not exceed
the aggregate
current value of the
assets of
such Plan allocable to such benefit liabilities by more than
$173,000,000 in the
case of any single Plan and by more than
$173,000,000 in the
aggregate for all Plans. The term "benefit
liabilities" has the
meaning specified
in section 4001 of
ERISA and
the terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) Neither the Company nor, to the knowledge of the Company,
any
of its ERISA Affiliates has incurred withdrawal liabilities (and are
not subject to contingent withdrawal liabilities) under section
4201
or 4204 of ERISA in respect of Multiemployer Plans that individually
or in the aggregate are Material.
7
<PAGE>
(d) The expected postretirement benefit obligation (determined
as
of the last day of the Company's 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 section 4980B of the Code) of the Company and
its
Subsidiaries, does not
exceed the aggregate
current value of
assets
set aside to fund such obligations by more than $272,000,000.
(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 section 406 of ERISA or in
connection with
which a tax could be
imposed pursuant to section
4975(c)(1)(A)-(D) of
the Code. The
representation by the
Company to
each Purchaser in the first sentence of this Section
5.12(e) is made
in reliance
upon and subject to the accuracy of such Purchaser's
representation in
Section 6.2 as to the
sources of the funds used to
pay the purchase price of the Notes to be purchased by such
Purchaser.
Section 5.13.
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 the
Purchasers and not more than seventy-five (75) 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
Section 5 of the Securities Act or to the registration
requirements of any securities or blue sky laws of any applicable
jurisdiction.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the
sale of the Notes (a) to refinance existing intercompany
Indebtedness of the Company and/or (b) for general corporate
purposes. 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 Regulation U of the Board of Governors of the Federal
Reserve System
(12 CFR 221), 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
Regulation
T of said Board (12 CFR 220). The Company or its
Subsidiaries do not
own any margin
stock and the Company does not have any
present intention that
it or any of its Subsidiaries will own any margin stock.
As used in this Section 5.14, the terms "margin stock" and "purpose
of buying or
carrying" shall have the meanings assigned to them in said
Regulation U.
Section 5.15. Existing
Indebtedness.
(a)
Schedule 5.15 sets forth a complete
and correct
description
of all
outstanding
Indebtedness of the Company and its Subsidiaries as of October 31,
2006 (including a description of the principal amount outstanding
and collateral
therefor, if any, and Guaranty thereof, if any), 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
8
<PAGE>
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 $5,000,000,
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.
(b) Neither the Company nor any Subsidiary is a party to, or
otherwise
subject to
any provision contained in, any instrument evidencing
Indebtedness of the
Company or such
Subsidiary, any
agreement relating
thereto or any other agreement (including, but not limited to, its
charter
or
other organizational
document) which limits the amount of, or otherwise
imposes restrictions
on the incurring of, Indebtedness of the Company,
except as specifically indicated in Schedule 5.15.
Section 5.16. Foreign Assets
Control Regulations, Etc.
(a) 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.
(b) Neither the Company nor any Subsidiary (i) is a Person described
or
designated in the
Specially Designated
Nationals and Blocked
Persons
List
of the Office
of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order
or (ii) engages in any dealings or transactions with
any
such Person. The Company and its Subsidiaries are in compliance, in
all
material respects, with the USA Patriot Act.
(c) No part of the proceeds from the sale of the Notes hereunder will
be
used, directly or
indirectly,
for any payments to any governmental
official or employee,
political party, official of a political party,
candidate for
political office, or anyone else acting in an official
capacity, in order to
obtain, retain or direct business or obtain any
improper advantage,
in violation
of the United
States Foreign Corrupt
Practices Act of 1977,
as amended, assuming in all cases that such Act
applies to the Company.
Section 5.17. 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 2005,
as amended, the
ICC
Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 6.
REPRESENTATIONS OF THE PURCHASERS.
Section 6.1. Purchase for Investment. Each Purchaser severally
represents
that it is an "accredited investor" within the meaning of
clause (1), (2), (3),
(7) or (8) of Rule 501(a) under the Securities Act and severally
represents that
it is purchasing
the Notes for its own account or for one or more separate
accounts maintained by
such Purchaser or for the account of one or more pension
9
<PAGE>
or trust funds, as for
each of which such Purchaser exercises sole investment
discretion for investment purposes only, and not with a view to the
distribution
thereof; provided,
that the disposition
of such Purchaser's or
their property
shall at all times be within such Purchaser's or their control.
Each Purchaser
understands that the Notes have not been, and will not be,
registered under
the
Securities Act, that
the Company is not required to register the Notes and that
the Notes 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.
Section 6.2. Source of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate
representation as to
each
source of funds (a
"Source") to be used
by such Purchaser to
pay the purchase
price of the Notes to be purchased by such Purchaser hereunder:
(a) the Source is an "insurance company general account" (as the
term
is
defined in the United States Department of Labor's Prohibited
Transaction Exemption
("PTE") 95-60) in
respect of which the reserves and
liabilities (as
defined by the annual statement for life insurance
companies approved
by the NAIC (the
"NAIC Annual Statement")) for the
general account
contract(s) held by or
on behalf of any employee benefit
plan
together with the amount of the
reserves and liabilities for the
general account
contract(s)
held by or on behalf
of any other
employee
benefit plans
maintained by the same
employer (or
affiliate thereof as
defined in PTE 95-60) or by the same employee organization in the general
account do not exceed
10% of the total
reserves and
liabilities
of the
general account (exclusive of separate account liabilities) plus
surplus as
set
forth in the NAIC Annual Statement filed with such Purchaser's
state of
domicile; or
(b) the Source is a
separate account
that is maintained solely in
connection with such Purchaser's fixed contractual obligations under which
the
amounts payable,
or credited,
to any employee benefit plan (or its
related trust) that
has any interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant)) are
not
affected in any
manner by the investment performance of the separate
account; or
(c) the Source is
either (i) an
insurance company
pooled separate
account, within
the meaning of PTE 90-1 or (ii) a bank collective
investment fund,
within the meaning of the PTE 91-38 and, except as
disclosed by such
Purchaser to the Company in writing pursuant to this
clause (c), 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
(d) the Source
constitutes assets of an "investment fund" (within the
meaning of
Part V of PTE
84-14 (the "QPAM Exemption")) managed by a
"qualified
professional asset
manager" or "QPAM"
(within the meaning
of
Part V of the QPAM
Exemption),
no employee benefit
plan's 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 Section V(c)(1) of the QPAM
Exemption) of such
employer or by the same employee organization and
10
<PAGE>
managed by such QPAM, exceed 20% of the total client assets managed
by such
QPAM, the conditions of Part I(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 Section V(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 clause (d); or
(e) the Source
constitutes assets of
a "plan(s)" (within the meaning
of
Section IV of PTE 96-23 (the "INHAM Exemption")) managed by an
"in-house
asset manager"
or "INHAM" (within the meaning of Part IV of the
INHAM
Exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption
are
satisfied, neither the
INHAM nor a person controlling or controlled by
the
INHAM (applying
the definition of "control" in Section IV(d) of
the
INHAM Exemption)
owns a 5% or more
interest in the Company and (i) the
identity of such INHAM and (ii) the name(s) of the employee benefit
plan(s)
whose assets
constitute the Source
have been disclosed to
the Company in
writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) 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
clause (g); or
(h) the Source does not include assets of any employee
benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan," "governmental
plan," and "separate
account" shall have
the respective
meanings assigned
to
such terms in section 3 of ERISA. Section 7. INFORMATION AS TO
COMPANY.
Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of a Note or Notes that is an Institutional
Investor:
(a) Quarterly
Statements
-- within sixty (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; and
11
<PAGE>
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;
(b) Annual Statements
-- 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 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;
(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 its principal lending banks as a
whole (excluding
information sent to
such banks in the ordinary course of
administration of a bank facility, such as information relating to
pricing
and
borrowing
availability) or to its 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 SEC,
and (iii) each regular
periodic report to any
entity that
regulates the affairs of the Company
and/or its Subsidiaries (including, without limitation, the Federal
Energy
Regulatory Commission and the New York Public Service
Commission);
(d) Notice of Default
or Event of Default
-- promptly, and in any
event within five (5) 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;
12
<PAGE>
(e) ERISA Matters -- promptly, and in any event within ten (10)
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
section 4043(c) of
ERISA and the
regulations
thereunder, for
which
notice thereof has not been waived pursuant to such regulations as 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
section 4042 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 Multi-employer 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 under this
Agreement and under
the Notes as from time to time
may
be reasonably requested by such holder of a Note or Notes.
Section 7.2.
Officer's Certificate. Each set of financial statements
delivered to a holder of a Note or Notes pursuant to Section 7.1(a) or Section
7.1(b) shall be
accompanied by a
certificate
of a Senior
Financial Officer
setting forth:
(a) Financial
Covenant Compliance -- to the extent a Financial
Covenant (as
defined below) is at any time hereafter incorporated by
reference into this Agreement pursuant to Section 10.5(a) and is
not deemed
deleted thereafter pursuant to Section 10.5(b), the information
(including
detailed calculations)
required in order to
establish whether the Company
was
in compliance with
such Financial
Covenant, during the quarterly or
annual period covered by the statements then being furnished (including
with
respect to each such Financial Covenant, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage,
as the
case
may be, permissible
under the terms of such Financial Covenant, and
the
calculation
of the amount,
ratio or percentage
then in existence);
provided, that
the delivery of any such information and/or detailed
calculations that
satisfy the
requirements of the
Other Debt (as defined
below) containing
such Financial
Covenant shall be
deemed to satisfy the
requirements of this Section 7.2(a); and
13
<PAGE>
(b) Event of Default -- a statement that such Senior Financial
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,
specifying the nature
and period of existence thereof and what action the
Company shall have taken or proposes to take with respect
thereto.
Section 7.3.
Visitation. The
Company shall permit the representatives of
each holder of a Note or 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
Company's 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 as may be reasonably requested in writing. Any such visit
will
not
unreasonably
disturb or interfere with the normal operation or
maintenance of any
facilities or
surrounding
areas or the conduct
by the
Company and each
Subsidiary of their
business and will be
in accordance
with
the Company's or such Subsidiary's, and any operator of the Company
or
such
Subsidiary's,
safety,
security,
insurance
and confidentiality
programs; 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
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.
Section 8.
PAYMENT AND PREPAYMENT OF THE NOTES.
Section 8.1. Maturity.
As provided
therein, the entire unpaid principal
balance of
the
