Exhibit
4.1
Execution
Version
MADISON GAS AND ELECTRIC
COMPANY
$40,000,000
5.59% Senior Notes due
September 11, 2018
_____________
NOTE PURCHASE
AGREEMENT
_____________
DATED SEPTEMBER 11,
2008
TABLE OF
CONTENTS
SECTION
HEADING
PAGE
SECTION 1.
AUTHORIZATION OF
NOTES
SECTION 2.
SALE AND PURCHASE OF
NOTES
SECTION 3.
CLOSING
SECTION 4.
CONDITIONS TO
CLOSING
Section 4.1.
Representations and
Warranties
Section 4.2.
Performance; No
Default
Section 4.3.
Compliance
Certificates
Section 4.4.
Opinions of
Counsel
Section 4.5.
Purchase Permitted By
Applicable Law, Etc
Section 4.6.
Sale of Other
Notes
Section 4.7.
Payment of Special
Counsel Fees
Section 4.8.
Private Placement
Number
Section 4.9.
Changes in Corporate
Structure
Section 4.10.
Funding
Instructions
Section 4.11.
Proceedings and
Documents
SECTION 5.
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Section 5.1.
Organization; Power and
Authority
Section 5.2.
Authorization,
Etc
Section 5.3.
Disclosure
Section 5.4.
Organization and
Ownership of Shares of Subsidiaries
Section 5.5.
Financial Statements;
Material Liabilities
Section 5.6.
Compliance with Laws,
Other Instruments, Etc
Section 5.7.
Governmental
Authorizations, Etc
Section 5.8.
Litigation; Observance
of Statutes and Orders
Section 5.9.
Taxes
Section 5.10.
Title to Property;
Leases
Section 5.11.
Licenses, Permits,
Etc
Section 5.12.
Compliance with
ERISA
Section 5.13.
Private Offering by the
Company
Section 5.14.
Use of Proceeds; Margin
Regulations
Section 5.15.
Existing
Indebtedness
Section 5.16.
Foreign Assets Control
Regulations, Etc
Section 5.17.
Status under Certain
Statutes
SECTION 6.
REPRESENTATIONS OF THE
PURCHASERS
Section 6.1.
Purchase for
Investment
Section 6.2.
Source of
Funds
SECTION 7.
INFORMATION AS TO
COMPANY
Section 7.1.
Financial and Business
Information
Section 7.2.
Officer’s
Certificate
Section 7.3.
Visitation
SECTION 8.
PAYMENT AND PREPAYMENT OF
THE NOTES
Section 8.1.
Maturity
Section 8.2.
Optional Prepayments
with Make-Whole Amount
Section 8.3.
Allocation of Partial
Prepayments
Section 8.4.
Maturity; Surrender,
Etc
Section 8.5.
Purchase of
Notes
Section 8.6.
Make-Whole
Amount
Section 8.7.
Change in
Control
SECTION 9.
AFFIRMATIVE
COVENANTS
Section 9.1.
Compliance with
Law
Section 9.2.
Insurance
Section 9.3.
Maintenance of
Properties
Section 9.4.
Payment of
Taxes
Section 9.5.
Corporate Existence,
Etc
Section 9.6.
Books and
Records
Section 9.7.
Conduct of
Business
SECTION 10.
NEGATIVE
COVENANTS
Section 10.1.
Transactions with
Affiliates
Section 10.2.
Merger, Consolidation,
Etc
Section 10.3.
Terrorism Sanctions
Regulations
Section 10.4.
Limitation on
Liens
Section 10.5.
Indebtedness
Ratio
Section 10.6.
Priority Debt
SECTION 11.
EVENTS OF
DEFAULT
SECTION 12.
REMEDIES ON DEFAULT,
ETC
Section 12.1.
Acceleration
Section 12.2.
Other
Remedies
Section 12.3.
Rescission
Section 12.4.
No Waivers or Election
of Remedies, Expenses, Etc
SECTION 13.
REGISTRATION; EXCHANGE;
SUBSTITUTION OF NOTES
Section 13.1.
Registration of
Notes
Section 13.2.
Transfer and Exchange of
Notes
Section 13.3.
Replacement of
Notes
SECTION 14.
PAYMENTS ON
NOTES
Section 14.1.
Place of
Payment
Section 14.2.
Home Office
Payment
SECTION 15.
EXPENSES, ETC
Section 15.1.
Transaction
Expenses
Section 15.2.
Survival
SECTION 16.
SURVIVAL OF
REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
SECTION 17.
AMENDMENT AND
WAIVER
Section 17.1.
Requirements
Section 17.2.
Solicitation of Holders
of Notes
Section 17.3.
Binding Effect,
Etc
Section 17.4.
Notes Held by Company,
Etc
SECTION 18.
NOTICES
SECTION 19.
REPRODUCTION OF
DOCUMENTS
SECTION 20.
CONFIDENTIAL
INFORMATION
SECTION 21.
SUBSTITUTION OF
PURCHASER
SECTION 22.
MISCELLANEOUS
Section 22.1.
Successors and
Assigns
Section 22.2.
Payments Due on
Non-Business Days
Section 22.3.
Accounting
Terms
Section 22.4.
Severability
Section 22.5.
Construction,
Etc
Section 22.6.
Counterparts
Section 22.7.
Governing Law
Section 22.8.
Jurisdiction and
Process; Waiver of Jury Trial
SCHEDULE
A
—
Information Relating to
Purchasers
SCHEDULE
B
—
Defined Terms
SCHEDULE
5.3
—
Disclosure
Materials
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 5.59% Senior
Note due September 11, 2018
EXHIBIT
4.4(a)
—
Form of Opinion of
Special Counsel for the Company
EXHIBIT
4.4(b)
—
Form of Opinion of
Special Counsel for the Purchasers
MADISON GAS AND
ELECTRIC
133 SOUTH BLAIR
STREET
MADISON, WI
53701
5.59% Senior Notes due
September 11, 2018
September 11,
2008
TO EACH OF THE PURCHASERS
LISTED IN
SCHEDULE A HERETO
:
Ladies and
Gentlemen:
Madison Gas and Electric
Company, a Wisconsin 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 $40,000,000 aggregate principal
amount of its 5.59% Senior Notes due September 11, 2018 (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 out in
Exhibit 1. Certain capitalized and other terms used in
this Agreement are defined in Schedule B; and 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.
SECTION 3.
CLOSING.
The sale and purchase of
the Notes to be purchased by each Purchaser shall occur at the
offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
IL 60603, at 10:00 a.m., Chicago time, at a closing (the
“Closing” ) on September 11, 2008 or on such
other Business Day thereafter on or prior to September 16, 2008 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 $250,000 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 621-950-708 at Chase
Bank, 22 East Mifflin Street, Madison Wisconsin 53703; ABA # 021
000 021; For the credit of Madison Gas and Electric Company.
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, 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.
Section 4.4.
Opinions of
Counsel .
Such Purchaser shall have received opinions in form and
substance satisfactory to such Purchaser, dated the date of the
Closing (a) from Stafford Rosenbaum LLP, Wisconsin counsel to the
Company, and Sidley Austin LLP, special New York 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 opinions to the Purchasers) and (b) from Chapman and
Cutler LLP, the Purchasers’ special counsel in connection
with such transactions, substantially in the form set forth in
Exhibit 4.4(b) 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
to the extent reflected in a statement of such counsel rendered to
the Company at least one 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.
Section 4.10.
Funding Instructions.
At
least three 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 currently 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 agent, JPMorgan Securities Inc., has delivered to each
Purchaser a copy of a Private Placement Memorandum, dated August,
2008 (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 August 27, 2008
being referred to, collectively, as the “Disclosure
Documents” ), taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of
the circumstances under which they were made. Except as
disclosed in the Disclosure Documents, since December 31, 2007,
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 (except as noted therein) 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 (except as otherwise disclosed in
Schedule 5.4).
(c)
Each Subsidiary
identified in Schedule 5.4 is a corporation or other legal entity
duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and is duly qualified as
a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be
so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports
to own or hold under lease and to transact the business it
transacts and currently proposes to transact.
Section 5.5.
Financial Statements;
Material Liabilities . The Company has delivered to
each Purchaser copies of the 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 and that such
interim financial statements may not contain all of the footnote
disclosures required by GAAP). 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 Material
indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other
Material agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions
or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (iii) violate any provision of any
statute or other 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 authorization from the Public Service
Commission of Wisconsin, which has been previously
obtained).
Section 5.8.
Litigation;
Observance of Statutes and Orders . (a) Except as
described in (i) Part I, Item 1 “Business --
Environmental,” Part I, Item 3 “Legal
Proceedings” and Part II, Item 8 “Financial Statements
and Supplementary Data – Notes to Consolidated Financial
Statements,” footnotes 18d and 21c in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2007
(the “ 2007 10-K Report ”) and (ii) Part I, Item
1 “Financial Statements -- Notes to Consolidated Financial
Statements,” footnotes 6a, 6d, 10c and 10e and Part I, Item 2
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Contractual Obligations
and Commercial Commitments - MGE Energy and MGE” and
“— Environmental” and Part II, Item 2
“Legal Proceedings” in the Company’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2008 (the
“ June 30, 2008 10-Q Report ”), 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 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
. MGE Energy,
Inc., the parent corporation of the Company, has, or 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 December 31,
2003.
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 any Subsidiary after said date (except as (i)
disclosed in the audited financial statements referred to in
Section 5.5 with respect to the consolidation of certain variable
interest entities under the provisions of FASB Interpretation No.
46R, Consolidation of Variable Interest Entities—An
Interpretation of ARB No. 51, or (ii) 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) The Company and each ERISA Affiliate have operated
and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in
and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in section 3 of ERISA), and
no event, transaction or condition has occurred or exists that
would reasonably be expected to result in the incurrence of any
such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets
of the Company or any ERISA Affiliate, in either case pursuant to
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, other than such liabilities or Liens as
would not be individually or in the aggregate Material.
(b)
The present value of the
aggregate benefit liabilities under each of the Plans (other than
(i) Multiemployer Plans and (ii) any Plans covered by the
representation in Section 5.12(d)), 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 $50,000,000 in the case of
any single Plan and by more than $80,000,000 in the aggregate for
all Plans (other than any Plans covered by the representation in
Section 5.12(d)). 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)
The Company and its
ERISA Affiliates have not 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 and its
Subsidiaries is not Material or has otherwise been disclosed in
footnote 13 of Notes to Consolidated Financial Statements in Part
II, Item 8 “Financial Statements and Supplementary
Data” in the 2007 10-K Report and footnote 8 in Part I, Item
1 “Financial Statements” in the June 30, 2008 10-Q
Report.
(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 25 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 as set forth in “The
Offering and Use of Proceeds” of the Memorandum. 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). Margin stock does not constitute more than 25% of the
value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 25% of the value of
such assets. As used in this Section, 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 . Except as described therein,
Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Subsidiaries as of
June 30, 2008 (including a description of the obligors and
obligees, 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, other than borrowings under the
Company’s credit agreement in the ordinary course of
business. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the
Company or such Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company or any Subsidiary the
outstanding principal amount of which exceeds $30,000,000 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
applicable provisions of 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, or
the ICC Termination Act of 1995, as amended. The Company is a
“subsidiary company” of a “holding company”
within the meaning of the Public Utility Holding Company Act of
2005, as amended; however, such holding company has received
a waiver from the provisions of the Public Utility Holding Company
Act of 2005. Such waiver is in full force and effect and the
Company is not aware of any existing or proposed proceedings
contemplating the revocation or modification of such
waiver.
SECTION 6.
REPRESENTATIONS OF THE
PURCHASERS.
Section 6.1.
Purchase for
Investment .
Each Purchaser 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 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 registered under the
Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither
such registration nor such an exemption is required by law, and
that the Company is not required to register the Notes.
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
National Association of Insurance Commissioners (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 managed
by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(a), (c) and (g) of the QPAM
Exemption are satisfied, the QPAM does not own a 10% or more
interest in the Company and any person controlling or controlled by
the QPAM (applying the definition of “control” in
Section V(e) of the QPAM Exemption) does not own a 20% 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 Notes that is an Institutional Investor:
(a)
Quarterly
Statements — within 60 days (or such
shorter period as is 15 days greater than the period
applicable to the filing of the Company’s Quarterly Report on
Form 10-Q (the “Form 10-Q” ) with the
SEC regardless of whether the Company is subject to the filing
requirements thereof) 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)
an unaudited
consolidated balance sheet of the Company and its Subsidiaries as
at the end of such quarter, and
(ii)
unaudited consolidated
statements of income and cash flows of the Company and its
consolidated Subsidiaries, for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year
ending with such quarter,
setting forth in each
case in comparative form the figures for the corresponding periods
in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to unaudited quarterly financial
statements generally, and certified by a Senior Financial Officer
as fairly presenting, in all material respects, the consolidated
financial position of the companies being reported on and their
consolidated results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that
delivery within the time period specified above of copies of the
Company’s Form 10-Q prepared in compliance with the
requirements therefor and filed with the SEC shall be deemed to
satisfy the requirements of this Section 7.1(a), and provided,
further, that the Company shall be deemed to have made such
delivery of such Form 10-Q if it shall have timely made such
Form 10-Q available on “EDGAR” and on its home
page on the worldwide web (at the date of this Agreement located
at: http//www.mgeenergy.com) and shall have given such holder
prior notice of such availability on EDGAR and on its home page in
connection with each delivery (such availability and notice thereof
being referred to as “Electronic Delivery”
);
(b)
Annual
Statements — within 105 days (or such
shorter period as is 15 days greater than the period applicable to
the filing of the Company’s Annual Report on Form 10-K
(the “Form 10-K” ) with the SEC regardless
of whether the Company is subject to the filing requirements
thereof) 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 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, provided that the delivery within the time
period specified above of the Company’s Annual Report on Form
10-K for such fiscal year (together with the Company’s annual
report to shareholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the SEC shall be deemed to
satisfy the requirements of this Section 7.1(b), and
provided, further, that the Company shall be deemed to have
made such delivery of such Form 10-K if it shall have timely
made Electronic Delivery thereof;
(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, and
(ii) each regular or periodic report, each registration
statement that shall have become effective (without exhibits except
as expressly requested by such holder and excluding registration
statements on Form S-8), and each final prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
SEC; provided that the Company shall be deemed to have made such
delivery of any documents referred to in this clause (ii) if it
shall have timely made Electronic Delivery thereof;
(d)
Notice of Default or
Event of Default — promptly, and in any event
within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default, a written notice
specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect
thereto;
(e)
ERISA
Matters — promptly, and in any event
within five 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 Multi-employer 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 (including, but without
limitation, actual copies of the Company’s Form 10-Q and
Form 10-K) 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
Notes.
Section 7.2.
Officer’s
Certificate .
Each set of financial statements delivered to a holder of
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 (which, in the case of Electronic Delivery of any such
financial statements, shall be by separate concurrent delivery of
such certificate to each holder of Notes):
(a)
Covenant
Compliance — the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of
Section 10.4 through Section 10.6, inclusive, during the
quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount,
ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b)
Event of
Default — a statement that such 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, as a result of such review, such Senior
Financial Officer has not become aware of 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 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; 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 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 10% 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 Notes written notice of
each optional prepayment under this Section 8.2 not less than 30
days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date (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 prepayment date
with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date
of the prepayment), setting forth the details of such computation.
Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial
Officer specifying the calculation of such Make-Whole Amount as of
the specified prepayment date.
Section 8.3.
Allocation of Partial
Prepayments .
In the case of each partial prepayment of the Notes pursuant
to Section 8.2, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called
for prepayment.
Section 8.4.
Maturity; Surrender,
Etc .
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall
mature and become due and payable on the date fixed for such
prepayment (which shall be a Business Day), together with interest
on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any,
as aforesaid, interest on such principal amount shall cease to
accrue. Any Note paid or prepaid in full shall be surrendered
to the Company and cancelled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any
Note.
Section 8.5.
Purchase of
Notes .
The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the
payment or prepayment of the Notes in accordance with the terms of
this Agreement and the Notes or (b) pursuant to an offer to
purchase made by the Company or an Affiliate pro rata to the
holders of all Notes at the time outstanding upon the same terms
and conditions. Any such offer shall provide each holder with
sufficient information to enable it to make an informed decision
with respect to such offer, and shall remain open for at least 30
days. If the holders of more than 50% of the principal amount
of the Notes then outstanding accept such offer, the Company shall
promptly notify the remaining holders of such fact and the
expiration date for the acceptance by holders of Notes of such
offer shall be extended by the number of days necessary to give
each such remaining holder at least 10 days from its receipt of
such notice to accept such offer. The Company will promptly
cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision
of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.6.
Make-Whole
Amount .
“Make-Whole Amount” means, with respect
to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect
to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following
meanings:
“Called
Principal” means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due
and payable pursuant to Section 12.1, as the context
requires.
“Discounted
Value” means, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal
from their respective scheduled due dates to the Settlement Date
with respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable)
equal to the Reinvestment Yield with respect to such Called
Principal.
“Reinvestment
Yield” means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by
(i) the yields reported as of 10:00 a.m. (New York City time)
on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as
“Page PX1” (or such other display as may replace Page
PX1) on Bloomberg Financial Markets for the most recently issued
actively traded on the run U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are
not ascertainable (including by way of interpolation), the Treasury
Constant Maturity Series Yields reported, for the latest day for
which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (or any
comparable successor publication) for U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date.
In the case of each
determination under clause (i) or clause (ii), as the
case may be, of the preceding paragraph, such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between
(1) the applicable U.S. Treasury security with the maturity
closest to and greater than such Remaining Average Life and
(2) the applicable U.S. Treasury security with the maturity
closest to and less than such Remaining Average Life. The
Reinvestment Yield shall be rounded to the number of decimal places
as appears in the interest rate of the applicable Note.
“Remaining
Average Life” means, with respect to any Called
Principal, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
(b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
“Remaining
Scheduled Payments” means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which
interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment
will be reduced by the amount of interest accrued to such
Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or Section 12.1.
“Settlement
Date” means, with respect to the Called
Principal of any Note, the date on which such Called Principal is
to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
Section
8.7.
Change in
Control .
(a)
Notice of Change in
Control and Change in Control Event. The Company will, within
five (5) Business Days after a Responsible Officer has
knowledge of the occurrence of any Change in Control, give written
notice of such Change in Control to each holder of Notes. If
within 90 days after such Change in Control, the Company does not,
for any reason, have an Investment Grade Rating, a “
Change in Control Event ” shall be deemed to have
occurred. If a Change in Control Event has occurred, the
Company shall promptly, and, in any event, within 10 days after the
end of such 90 day period, give written notice thereof to the
holders of the Notes, and such notice shall contain and constitute
an offer by the Company to prepay the Notes of the Company as
described in Section 8.7(b) hereof and shall be accompanied by
the certificate described in Section 8.7(e).
(b)
Offer to Prepay
Notes .
The offer to prepay Notes contemplated by paragraph (a) of
this Section 8.7 shall be an offer to prepay by the Company, in
accordance with and subjec
