|
Exhibit 10.2
================================================================================
KEYSPAN GAS EAST CORPORATION,
doing business as KEYSPAN ENERGY DELIVERY LONG ISLAND
$100,000,000
5.60% Senior Unsecured Notes due November 29, 2016
----------------------------------------------------
NOTE PURCHASE AGREEMENT
-------------
Dated as of November 29, 2006
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION HEADING PAGE
<S> <C> <C>
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.
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.......................................................5
Section 5.8. Litigation; Observance of Statutes and
Orders..........................................5
Section 5.9.
Taxes..................................................................................6
Section 5.10. Title to Property;
Leases..............................................................6
Section 5.11. Licenses, Permits,
Etc.................................................................6
Section 5.12. Compliance with
ERISA..................................................................6
Section 5.13. Private Offering by the
Company........................................................7
Section 5.14. Use of Proceeds; Margin
Regulations....................................................8
Section 5.15. Existing
Indebtedness..................................................................8
Section 5.16. Foreign Assets Control Regulations,
Etc................................................8
Section 5.17. Status under Certain
Statutes..........................................................9
i
<PAGE>
SECTION 6. REPRESENTATIONS OF THE
PURCHASERS......................................................9
Section 6.1. Purchase for
Investment................................................................9
Section 6.2. Source of
Funds........................................................................9
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............................................................................13
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.....................................................14
Section 8.4. Maturity; Surrender,
Etc..............................................................14
Section 8.5. Purchase of
Notes.....................................................................15
Section 8.6. Make-Whole
Amount.....................................................................15
SECTION 9. AFFIRMATIVE
COVENANTS.................................................................16
Section 9.1. Payments on the
Notes.................................................................16
Section 9.2. Compliance with
Law...................................................................17
Section 9.3.
Insurance.............................................................................17
Section 9.4. Maintenance of
Properties.............................................................17
Section 9.5. Payment of
Taxes......................................................................17
Section 9.6. Corporate Existence,
Etc..............................................................17
Section 9.7. Books and
Records.....................................................................18
Section 9.8. Regulated
Business....................................................................18
SECTION 10. NEGATIVE
COVENANTS....................................................................18
Section 10.1. Transactions with
Affiliates..........................................................18
Section 10.2. Merger, Consolidation,
Etc............................................................18
Section 10.3. Line of
Business......................................................................19
Section 10.4.
Liens.................................................................................19
Section 10.5. Most Favored
Noteholder...............................................................19
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........................................................................22
Section 12.3.
Rescission............................................................................22
Section 12.4. No Waivers or Election of Remedies, Expenses,
Etc.....................................23
ii
<PAGE>
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES.........................................23
Section 13.1. Registration of
Notes.................................................................23
Section 13.2. Transfer and Exchange of
Notes........................................................23
Section 13.3. Replacement of
Notes..................................................................24
Section 13.4. Agent
Services........................................................................24
SECTION 14. PAYMENTS ON
NOTES.....................................................................25
Section 14.1. Place of
Payment......................................................................25
Section 14.2. Home Office
Payment...................................................................25
SECTION 15. EXPENSES,
ETC.........................................................................25
Section 15.1. Transaction
Expenses..................................................................25
Section 15.2.
Survival..............................................................................26
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT..........................26
SECTION 17. AMENDMENT AND
WAIVER..................................................................26
Section 17.1.
Requirements..........................................................................26
Section 17.2. Solicitation of Holders of
Notes......................................................27
Section 17.3. Binding Effect,
Etc...................................................................27
Section 17.4. Notes Held by Company,
Etc............................................................27
SECTION 18.
NOTICES...............................................................................28
SECTION 19. REPRODUCTION OF
DOCUMENTS.............................................................28
SECTION 20. CONFIDENTIAL
INFORMATION..............................................................29
SECTION 21. SUBSTITUTION OF
PURCHASER.............................................................29
SECTION 22.
MISCELLANEOUS.........................................................................30
Section 22.1. Successors and
Assigns................................................................30
Section 22.2. Payments Due on Non-Business
Days.....................................................30
Section 22.3. Accounting
Terms......................................................................30
Section 22.4.
Severability..........................................................................30
Section 22.5. Construction,
Etc.....................................................................30
Section 22.6.
Counterparts..........................................................................31
Section 22.7. Governing
Law.........................................................................31
Section 22.8. Jurisdiction and Process; Waiver of Jury
Trial........................................31
</TABLE>
iii
<PAGE>
Schedule A -- Information Relating to Purchasers
Schedule B -- Defined Terms
Schedule 5.3 -- Disclosure Documents
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
iv
<PAGE>
KEYSPAN GAS EAST CORPORATION,
doing business as KEYSPAN ENERGY DELIVERY LONG ISLAND
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:
KEYSPAN GAS EAST CORPORATION, doing business as KEYSPAN ENERGY
DELIVERY
LONG ISLAND, 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 $100,000,000
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.
<PAGE>
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.
2
<PAGE>
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
<PAGE>
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
<PAGE>
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 except
changes that
individually or in the aggregate would not reasonably be expected
to have a
Material Adverse Effect.
Section 5.4. Subsidiaries. The Company has no Subsidiaries.
Section 5.5. Financial Statements; Material Liabilities. The
Company has
delivered to each Purchaser copies of the financial statements of
the Company
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
financial position of the Company as of the respective dates
specified in such
Schedule and the results of its 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 does 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
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 is bound or by which the Company
or any of
its 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 (iii) violate any provision of any statute or
other rule or
regulation of any Governmental Authority applicable to the
Company.
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 property of the Company 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.
5
<PAGE>
(b) The Company is not 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 has filed all income tax returns
that are
required to have been filed in any jurisdiction, and has paid all
taxes shown to
be due and payable on such returns and all other taxes and
assessments payable
by it, 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 has
established adequate reserves in accordance with GAAP. The Federal
income tax
liabilities of the Company 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 December 31, 1997.
Section 5.10. Title to Property; Leases. The Company has good
and
sufficient title to its 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 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 owns or possesses
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
6
<PAGE>
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.
(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, does not exceed the aggregate current
value of assets
set aside to fund such obligations by more than $514,000,000.
(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.
7
<PAGE>
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
does not own
any margin stock and the Company does not have any present
intention that it
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 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. The
Company is
not 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 and
no event or condition exists with respect to any Indebtedness of
the
Company, 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) The Company is not a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of
the
Company, 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) The Company (i) is not 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
and (ii)
does not engage in any dealings or transactions with any such
Person. The
Company is in compliance, in all material respects, with the USA
Patriot
Act.
8
<PAGE>
(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. The Company is not
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
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
9
<PAGE>
(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
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.
10
<PAGE>
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
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;
11
<PAGE>
(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;
(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
12
<PAGE>
(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
(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
13
<PAGE>
(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 Notes shall be due and payable on the stated
maturity date
thereof.
Section 8.2. 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 five
percent
(5.00%) of the aggregate principal amount of the Notes then
outstanding in the
case of a partial prepayment, at 100% of the principal amount so
prepaid, plus
the Make-Whole Amount determined for the prepayment date with
respect to such
principal amount. The Company will give each holder of a Note or
Notes written
notice of each optional prepayment under this Section 8.2 not less
than thirty
(30) days and not more than sixty (60) days prior to the date fixed
for such
prepayment. Each such notice shall specify such date (which shall
be a Business
Day), 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 Section 8.3), and the interest to be paid on the
prepaym
|
