CONNECTICUT DEVELOPMENT AUTHORITY
and
NEW ENGLAND POWER COMPANY
LOAN AGREEMENT
Dated as of September 1, 1999
Connecticut Development Authority
$38,500,000 Pollution Control Revenue Refunding Bonds
(New England Power Company Project - 1999 Series)
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Connecticut Development Authority
New England Power Company
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1999, by and
between the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the State
of Connecticut, and New England Power Company, a corporation organized and
existing under the laws of the Commonwealth of Massachusetts,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23xx, as amended (the "Act"), declares
that there is a continuing need in the State (1) for economic development and
activity to provide and maintain employment and tax revenues and to control,
xxxxx and prevent pollution to protect the public health and safety and (2)
for assistance to public service businesses providing transportation and
utility services in the State, and that the availability of financial
assistance and suitable facilities are important inducements to industrial and
commercial enterprises to remain or locate in the State and to provide
industrial, recreation, urban and public service projects; and
WHEREAS, the Act provides that (1) the term "project" as used therein
means any facility, plant, works, system, building, structure, utility,
fixture or other real property improvement located in the State, and the land
on which it is located or which is reasonably necessary in connection
therewith, which is of a nature or which is to be used or occupied by any
person for purposes which would constitute it as an economic development
project, recreation project, urban project, public service project or health
care project, and any real property improvement reasonably related thereto,
and (2) that a project may also include or consist exclusively of machinery,
equipment or fixtures; and
WHEREAS, the Act defines economic development project to include "any
project which is to be used or occupied by any person for . . . (2)
controlling, abating, preventing or disposing of land, water, air or other
environmental pollution . . . or (3) the conservation of energy or the
utilization of cogeneration technology or solar, wind, hydro, biomass or other
renewable sources to produce energy for any industrial or commercial
application."
WHEREAS, the Act provides that the Authority shall have power (1) to
determine the location and character of any project to be financed under the
provisions of the Act; (2) to purchase, receive by gift or otherwise, lease,
exchange, or otherwise acquire, and construct, reconstruct, improve, maintain,
equip and furnish one or more projects, including all real and personal
property which the Authority may deem necessary therewith, and to enter into a
contract with a person therefor upon such terms and conditions as the
Authority shall determine to be reasonable, including but not limited to
reimbursement for the planning, designing, financing, construction,
reconstruction, improvement, equipping, furnishing, operation and maintenance
of reserve and insurance funds with respect to the financing of the project;
(3) to extend credit or make loans to any person for the planning, designing,
financing, acquiring, constructing, reconstructing, improving, equipping and
furnishing of a project and for the refinancing of existing indebtedness with
respect to any facility or part thereof which would qualify as a project in
order to facilitate substantial improvements thereto, which credits or loans
may be secured by loan agreements, mortgages, contracts and all other
instruments or fees and charges, upon such terms and conditions as the
Authority shall determine to be reasonable in connection with such loans,
including provision for the establishment and maintenance of reserve and
insurance funds and in the exercise of powers granted in the Act in connection
with a project for such person, to require the inclusion in any contract, loan
agreement or other instrument, such provisions for the construction, use,
operation and maintenance and financing of a project as the Authority may deem
necessary or desirable; (4) to issue its bonds for such purposes, subject to
the approval of the Treasurer of the State; and, (5) as security for the
payment of the principal or redemption price, if any, of and interest on any
such bonds, to pledge or assign such a loan, lease or sale agreement and the
revenues and receipts derived by the Authority from such a project; and
WHEREAS, the Authority has by resolution adopted October 8, 1985
authorized the issuance of, and previously issued, $38,500,000 principal
amount of its Adjustable Rate Pollution Control Revenue Bonds (New England
Power Company Project - 1985 Series) (the "Prior Obligations") for the benefit
of the New England Power Company (the "Borrower") for the purpose of providing
funds for the financing and refinancing of construction of and additions to
the pollution control facilities of the Borrower; and
WHEREAS, the Borrower currently owns certain undivided interests in the
Millstone Point Nuclear Power Plant, Unit No. 3 located in the Town of
Waterford, Connecticut (the "Plant") and, by resolution adopted in furtherance
of the purposes of the Act, the Authority has accepted the application of the
Borrower for assistance in the financing and refinancing of facilities for the
control, abatement or prevention of environmental pollution resulting from the
operation of the Plant (the "Project"); and
WHEREAS, the Authority has by a resolution adopted August 18, 1999,
authorized the issuance of $38,500,000 principal amount of its Pollution
Control Revenue Refunding Bonds (New England Power Company Project - 1999
Series) for the purpose of providing funds for the refunding of the Prior
Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter defined)
are to be secured by an Indenture of Trust of even date herewith, by and
between the Authority and State Street Bank and Trust Company, as Trustee; and
WHEREAS, the proceeds of the Bonds will be used to replace certain
amounts currently on deposit in an irrevocable trust fund held by State Street
Bank and Trust Company designated "Connecticut Development Authority
Adjustable Rate Pollution Control Revenue Bonds (New England Power Company
Project - Series 1985) Defeasance Trust Fund" (the "Defeasance Trust Fund"),
which Defeasance Trust Fund was established pursuant to a Defeasance Trust
Agreement, dated as of September 1, 1998, by and among the Authority, the
Borrower and State Street Bank and Trust Company, as successor bond trustee to
The Connecticut National Bank (the "Defeasance Trust Agreement"); and
WHEREAS, the Bonds shall be special obligations of the Authority, payable
solely from the revenues or other receipts, funds or monies to be derived by
the Authority under this Agreement or the Indenture and from any amounts
otherwise available under the Indenture for the payment of the Bonds; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to make a
loan to the Borrower and the Borrower proposes to borrow such proceeds from
the Authority for the purpose of refunding the Prior Obligations; and
WHEREAS, the payment obligations of the Borrower hereunder will be
evidenced by a promissory note (the "Note") to be delivered simultaneously
with the issuance of the Bonds; and
WHEREAS, the Borrower acknowledges that the Authority is providing
financing for the Project in furtherance of the Authority's corporate purposes
under the Act, that the accomplishment of these purposes is dependent upon the
compliance of the Borrower with its covenants contained in this Agreement,
that the Authority has a resulting beneficial interest in the Project, and
that the Borrower's use of and interest in the Project as provided hereby are
in furtherance of the discharge of a public purpose; and
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, covenants and agreements herein set forth, the Authority and
the Borrower, each binding itself, its successors and assigns, do mutually
promise, covenant and agree as follows (provided that in the performance of
the agreements of the Authority herein contained, any obligation it may incur
for the payment of money shall not be an obligation, debt or liability of the
State or any municipality thereof and neither the State nor any municipality
thereof shall be liable on any obligation so incurred, but any such obligation
shall be payable solely out of the revenues or other receipts, funds or monies
to be derived by the Authority under this Agreement or the Indenture and from
any amounts otherwise available under the Indenture for the payment of the
Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. For the purposes of this Agreement, the
following words and terms shall have the respective meanings set forth as
follows, and any capitalized word or term used but not defined herein is used
as defined in the Indenture:
"Agreement" means this Loan Agreement and any amendments and supplements
hereto.
"Authority" means the Connecticut Development Authority, a body corporate
and politic constituting a public instrumentality and political subdivision of
the State of Connecticut duly organized and existing under the laws of the
State, and any body, board, authority, agency or other political subdivision
or instrumentality of the State which shall hereafter succeed to the powers,
duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the
Chairman or Vice Chairman, the President, the Executive Vice President or any
Senior Vice President or any Vice President thereof and, in the case of the
Borrower, the President, any Vice President, the Treasurer or any Assistant
Treasurer thereof and, when used with reference to the performance of any act,
the discharge of any duty or the execution of any certificate or other
document, any officer, employee or other person authorized to perform such
act, discharge such duty or execute such certificate or other document.
"Bonds" means the $38,500,000 Pollution Control Revenue Refunding Bonds
(New England Power Company Project - 1999 Series) authorized and issued
pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Xxxxxxx Breed Xxxxxx & Xxxxxx LLP or such other
nationally recognized bond counsel selected by the Authority and reasonably
satisfactory to the Borrower and the Trustee.
"Bondholder," or "Holder" or "Owner" or "Owner of Bonds" or words of
similar import when used with reference to Bonds, shall unless otherwise
specified, mean any person who shall be the registered owner of any
Outstanding Bond.
"Borrower" means (i) New England Power Company, a corporation organized
and existing under the laws of the Commonwealth of Massachusetts, and its
successors and assigns, and (ii) any surviving resulting or transferee
corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday, (ii)
that is a day on which banking institutions in all of the cities in which the
principal offices of the Trustee and the Paying Agent and, if applicable, the
Remarketing Agent and Tender Agent are located and are not required or
authorized to remain closed, and (iii) that is a day on which the New York
Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and
regulations promulgated thereunder.
"Counsel" means an attorney at law or a firm of attorneys (who may be an
employee of or counsel to the Authority or the Borrower or the Trustee) duly
admitted to the practice of law before the highest court of any state of the
United States of America or of the District of Columbia.
"Debt Service Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the limited-purpose
trust company organized under the laws of the State of New York which shall
act as securities depository for the Bonds, and any successor thereto.
"Determination of Taxability" means with respect to the Bonds, (1) a
ruling by the Internal Revenue Service, (2) the receipt by the Owner (for
federal income tax purposes) of any of the Bonds from the Internal Revenue
Service of a notice of assessment and demand for payment (provided the
Borrower has been afforded the opportunity to participate at its own expense
in all appeals to which such Owner of any Bonds is a party relating to such
assessment and demand for payment) and the expiration of the appeal period
provided therein if no appeal is taken or, if an appeal is taken by such Owner
of any Bonds within the applicable appeal period which has the effect of
staying the demand for payment, a final unappealable decision by a court of
competent jurisdiction, or (3) the admission in writing by the Borrower, in
any case to the effect that the interest on the Bonds is includable in the
gross income for federal income tax purposes (other than for purposes of
alternative minimum tax) of an Owner or former Owner thereof, other than for a
period during which such Owner or former Owner is or was a "substantial user"
of the Project financed by such Bonds or a "related person" as such terms are
defined in the 1954 Code.
"Event of Default" means an Event of Default as defined in Section 7.1
hereof.
"Financing Documents" means this Agreement, the Tax Regulatory Agreement
and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by and
between the Authority and the Trustee, together with all indentures
supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is payable
on the Bonds as provided in the Indenture.
"Loan Agreement" means this Loan Agreement and any amendments and
supplements hereto.
"Xxxxx'x" means Xxxxx'x Investors Services, Inc., a corporation organized
and existing under the laws of the State of Delaware, its successors and their
assigns, and if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "Xxxxx'x" shall be
deemed to refer to any other nationally recognized securities rating agency
designated by the Authority, at the direction of the Borrower, by notice to
the Trustee and the Borrower.
"Net Proceeds" when used with respect to any insurance or condemnation
award, means the gross proceeds from such award less all expenses (including
attorney's fees and expenses and any extraordinary expenses) incurred in the
collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as in
effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority, dated
the initial date of delivery of the Bonds in the form attached as Appendix A
to this Agreement, and any amendments or supplements made in conformity with
this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any
particular date, means all Bonds which have been authenticated and delivered
under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or
redemption prior to maturity or surrendered to the Trustee for cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for the
payment or redemption of which there has been separately set aside and held in
the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of the
principal or applicable Redemption Price thereof, together with accrued
interest on such Bond to the payment or redemption date, which payment or
redemption date shall be specified in irrevocable instructions given to the
Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in Section 12.1(A) of the
Indenture in such principal amounts, of such maturities, bearing such interest
and otherwise having such terms and qualifications as shall be necessary
to provide monies in an amount sufficient to effect payment of the principal
or applicable Redemption Price of such Bond, together with accrued interest on
such Bond to the payment or redemption date, which payment or redemption date
shall be specified in irrevocable instructions given to the Trustee to apply
such obligations to such payment on the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to the
Tender Agent on the purchase date, provided sufficient funds for payment of
the purchase price are on deposit with the Tender Agent;
(4) Bonds in exchange for or in lieu of which other Bonds shall
have been authenticated and delivered under Article III of the Indenture; and
(5) any Bond deemed to have been paid as provided in Section 12.1
of the Indenture.
In determining whether the Owners of a requisite aggregate principal
amount of outstanding Bonds have concurred in any request, demand,
authorization, direction, notice, consent or waiver under the provisions of
the Indenture, Bonds which are owned of record by the Borrower or any
affiliate thereof or held by the Trustee for the account of the Borrower shall
be disregarded and deemed not to be Outstanding under the Indenture for the
purpose of any such determination (except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Bonds which a
Responsible Officer of the Trustee actually knows to be so owned or held shall
be disregarded) unless all Bonds are owned by the Borrower or any affiliate
thereof and/or held by the Trustee for the account of the Borrower, in which
case such Bonds shall be considered Outstanding for the purpose of such
determination. For the purpose of this definition an "affiliate" of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person and "control," when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Paying Agent" means any paying agent or paying agents for the Bonds
appointed pursuant to Section 9.10 of the Indenture (and may include the
Trustee), and its successor or successors and any other corporation which may
at any time be substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) liens for
taxes not yet due and payable, (ii) any lien created by this Agreement and
the Indenture, (iii) utility, access and other easements and rights-of-way,
that will not interfere with or impair the value or use of the Project as
herein provided, (iv) any mechanic's, laborer's, materialman's, supplier's or
vendor's lien or right in respect thereof if payment is not yet due and
payable and for which statutory lien rights exist, and (v) such minor defects,
irregularities, easements, and, rights-of-way (including agreements with any
railroad the purpose of which is to service the railroad siding) as normally
exist with respect to property similar in character to the Project and which
do not materially impair the value or use of the property affected thereby for
the purpose for which it was acquired hereunder.
"Plant" means the Millstone 3 nuclear electric generating plant in
Waterford, Connecticut, at which plant the Project is located.
"Principal User" means any principal user of the Project within the
meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954 Code,
as applicable, including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who holds the largest
ownership interest in the Project), lessee or user of more than 10% of the
Project measured either by occupiable space or fair rental value under any
formal or informal agreement or, under the particular facts and circumstances,
anyone who is a principal customer of the Project. The term "principal
customer" means any person, who purchases output of the Project under a
contract if the percentage of output taken or to be taken by such person,
multiplied by a fraction the numerator of which is the term of such contract
and the denominator of which is the economic life of the Project, exceeds
10%. In the case of a person who purchases output of an electric or thermal
energy, gas, water or other similar facility, such person is a principal
customer if the total output purchased by such person during any one-year
period beginning with the date the facility is placed in service is more than
10 percent of the facility's output during each such period. Co-owners or
co-lessees who are shareholders in a corporation or who are collectively
treated as a partnership
subject to subchapter K under section 761(a) of the Code are not treated as
Principal Users merely by reason of their ownership of corporate or
partnership interests.
"Prior Obligations" shall mean the Authority's Adjustable Rate Pollution
Control Revenue Bonds (New England Power Company Project - 1985 Series) issued
pursuant to an Indenture of Trust, dated as of October 15, 1985, by and
between the Authority and The Connecticut National Bank, as trustee.
"Project" means the Borrower's 12.205% undivided interest in facilities
for the control, abatement or prevention of air, water and general
environmental pollution resulting from the operation of the Plant.
"Rate Period" means any Daily Rate Period, Weekly Rate Period, Flexible
Rate Period or Term Rate Period.
"Redemption Price" means, when used with respect to a Bond or a portion
thereof, the principal amount of such Bond or portion thereof plus the
applicable premium, if any, payable upon redemption thereof pursuant to the
Indenture.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Remarketing Agent" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, as remarketing agent for the Bonds, and any successor
remarketing agent appointed from time to time pursuant to Section 4.8 of the
Indenture.
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut
Nuclear Unit dated as of September 1, 1973, among the Borrower and the other
participants from time to time in ownership of the Plant, pertaining to the
ownership, construction and operation of the Plant, as such agreement has been
or may be amended from time to time.
"S&P" means Standard & Rating Services, a division of the XxXxxx-Xxxx
Companies, Inc., its successors and their assigns and, if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other
nationally recognized securities rating agency designated by the Authority at
the direction of the Borrower by notice to the Trustee and the Borrower.
"Substantial User" means any substantial user of the Project within the
meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954 Code,
as applicable.
"Supplemental Indenture" means any indenture supplemental to the
Indenture or amendatory of the Indenture, adopted by the Authority in
accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds
becomes or became includable in the gross income of the recipient thereof
(other than the Borrower or another Substantial User or Related Person) for
federal income tax purposes for any cause, as determined by a Determination of
Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated as
of the date of initial issuance and delivery of the Bonds, among the
Authority, the Borrower and the Trustee, and any amendments and supplements
thereto.
"Tender Agent" means U.S. Bank Trust National Association, acting as
tender agent for the Bonds, and any successor tender agent appointed from time
to time pursuant to Section 9.17 of the Indenture.
"Term", when used with reference to this Agreement, means the term of
this Agreement determined as provided in Article III hereof.
"Trustee" means State Street Bank and Trust Company, and its successor or
successors hereafter appointed in the manner provided in the Indenture.
Section 1.2 Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein", "hereunder"
and any similar terms, as used in this Agreement, refer to this Agreement, and
the term "hereafter" means after, and the term "heretofore" means before, the
date of this Agreement.
(2) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the singular
number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations,
partnerships (including limited partnerships), trusts, corporations and other
legal entities, including public bodies, as well as natural persons.
(4) Any headings preceding the texts of the several Articles and
Sections of this Agreement, and any table of contents appended to copies
hereof, shall be solely for convenience of reference and shall not constitute
a part of this Agreement, nor shall they affect its meaning, construction or
effect.
(5) Nothing contained in this Agreement shall be construed to cause
the Borrower to become the agent for the Authority or the Trustee for any
purpose whatsoever, nor shall the Authority or the Trustee be responsible for
any shortage, discrepancy, damage, loss or destruction of any part of the
Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be given or
made by any person or party hereunder shall be at the sole discretion of the
party whose approval, consent or acceptance is required.
(7) All notices to be given hereunder shall be given in writing
within a reasonable time unless otherwise specifically provided.
(8) This Agreement shall be governed by and construed in accordance
with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid by
any court of competent jurisdiction, the invalidity of such provision shall
not affect any of the remaining provisions hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations by the Authority. The Authority
represents and warrants that:
(1) It is a body corporate and politic constituting a public
instrumentality and political subdivision of the State, duly organized and
existing under the laws of the State including the Act. The Authority is
authorized to issue the Bonds in accordance with the Act and to use the
proceeds thereof to finance the Project.
(2) The Authority has complied with the provisions of the Act and
has full power and authority pursuant to the Act to consummate all
transactions contemplated by the Bonds, the Indenture and the Financing
Documents.
(3) By resolution duly adopted by the Authority and still in full
force and effect, the Authority has authorized the execution, delivery and due
performance of the Bonds, the Indenture and the Financing Documents, and the
taking of any and all action as may be required on the part of the Authority
to carry out, give effect to and consummate the transactions contemplated by
this Agreement and the Indenture, and all approvals necessary in connection
with the foregoing have been received.
(4) The Bonds have been duly authorized, executed, authenticated,
issued and delivered, constitute valid and binding special obligations of the
Authority payable solely from revenues or other receipts, funds or monies
pledged therefor under the Indenture and from any amounts otherwise available
under the Indenture, and are entitled to the benefit of the Indenture.
Neither the State nor any municipality thereof is obligated to pay the Bonds
or the interest thereon. Neither the faith and credit nor the taxing power of
the State nor any municipality thereof is pledged for the payment of the
principal, and premium, if any, of and interest on the Bonds.
(5) The execution and delivery of the Bonds, the Indenture and the
Financing Documents and compliance with the provisions thereof, will not
conflict with or constitute on the part of the Authority a violation of,
breach of or default under its by-laws or any statute, indenture, mortgage,
deed of trust, note agreement or other agreement or instrument to which the
Authority is a party or by which the Authority is bound, or, to the knowledge
of the Authority, any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Authority or any of its activities
or properties, and all consents, approvals, authorizations and orders of
governmental or regulatory authorities which are required for the consummation
by the Authority of the transactions contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the Indenture,
the Authority will apply the proceeds of the Bonds to the purposes specified
in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at law or
in equity before or by any court, public board or body pending or threatened
against or affecting the Authority, or to the best knowledge of the Authority,
any basis therefor, wherein an unfavorable decision, ruling or finding would
adversely affect the transactions contemplated hereby or by the Indenture, or
which, in any way, would
adversely affect the validity of the Bonds, or the validity of or
enforceability of the Indenture or the Financing Documents, or any agreement
or instrument to which the Authority is a party and which is used or
contemplated for use in consummation of the transactions contemplated hereby
and by the Indenture.
(8) It has not made any commitment or taken any action which will
result in a valid claim for any finders or similar fees or commitments in
respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax
Regulatory Agreement are by this reference incorporated in this Agreement as
though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the
Sharing Agreement, the Borrower is the owner of a 12.205% undivided interest
in the Plant. The Project constitutes a portion of such Plant. The Sharing
Agreement designates two lead participants that have sole responsibilities for
all aspects of construction of the Plant and for the operation and maintenance
of the Plant. The Borrower is not a lead participant. Every obligation of
the Borrower hereunder with respect to the Project (other than the continuing
obligation of the Borrower to pay, at the times and in the amounts set forth
herein, its loan obligation pursuant to this Agreement) is subject to and
limited by the provisions of such Sharing Agreement. The Borrower agrees,
however, subject to the representations set forth in Section 2.3, to exercise
all rights granted to it pursuant to the Sharing Agreement and its rights as
to matters otherwise within the Borrower's control, and to take all reasonable
actions in the prudent exercise of business judgment, to cause the covenants
of the Borrower contained in this Agreement to be performed to the full extent
of the Borrower's ability during the Term of this Agreement.
Section 2.3 Representations by the Borrower. The Borrower represents
and warrants that:
(1) The Borrower has been duly incorporated and validly exists as a
corporation in good standing under the laws of the Commonwealth of
Massachusetts, is duly qualified to transact business as a foreign corporation
in good standing under the laws of the State, is not in violation of any
provision of its Articles of Organization or its by-laws, has corporate power
to enter into and perform the Financing Documents, and by proper corporate
action has duly authorized the execution and delivery of the Financing
Documents.
(2) The Financing Documents constitute valid and legally binding
obligations of the Borrower, enforceable in accordance with their respective
terms, except to the extent that such enforceability may be limited by
bankruptcy or insolvency or other laws affecting creditors' rights generally
or by general principles of equity.
(3) Neither the execution and delivery of the Financing Documents,
the consummation of the transactions contemplated thereby, nor the fulfillment
by the Borrower of or compliance by the Borrower with the terms and conditions
thereof is prevented or limited by or conflicts with or results in a breach
of, or default under the terms, conditions or provisions of any contractual or
other restriction of the Borrower, evidence of its indebtedness or agreement
or instrument of whatever nature to which the Borrower is now a party or by
which it is bound, or constitutes a default under any of the foregoing. No
event has occurred and no condition exists which, upon the execution and
delivery of any Financing Documents, constitutes an Event of Default hereunder
or an event of default thereunder or, but for the lapse of time or the giving
of notice, would constitute an Event of Default hereunder or an event of
default thereunder.
(4) There is no action or proceeding pending or, to the knowledge
of the Borrower, threatened against the Borrower before any court,
administrative agency or arbitration board that will materially and adversely
affect the ability of the Borrower to perform its obligations under the
Financing Documents except as disclosed in the Borrower's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, and the Borrower's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999, and
all authorizations, consents and approvals of governmental bodies or agencies
required in connection with the execution and delivery of the Financing
Documents and in connection with the performance of the Borrower's obligations
hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing
Documents and any other instrument delivered by the Borrower pursuant to the
terms hereof or thereof are within the corporate powers of the Borrower and
have been duly authorized and approved by the board of directors of the
Borrower and are not in contravention of law or of the Borrower's Articles of
Organization or by-laws, as amended to date, or of any undertaking or
agreement to which the Borrower is a party or by which it is bound.
(6) The Borrower represents that it has not made any commitment or
taken any action which will result in a valid claim for any finders' or
similar fees or commitments in respect of the transactions described in this
Agreement other than the fees to various parties to the transactions
contemplated hereby which have been heretofore paid or provided.
(7) The Project is included within the definition of a "project" in
the Act, and its estimated cost was, at the time of issuance of the Prior
Obligations, equal to or in excess of $38,500,000. The Borrower intends the
Project to be and continue to be an authorized project under the Act during
the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory Agreement
are eligible costs of a project financed by bonds issued by the Authority
under the Act, and may be financed by amounts in the Redemption Fund under the
Indenture. None of the proceeds of the Bonds will be used directly or
indirectly as working capital or to finance inventory.
(9) To the best of the Borrower's knowledge, the Project is in
compliance with all applicable federal, State and local laws and ordinances
(including rules and regulations) relating to zoning, building, safety and
environmental quality the non-compliance with which would materially adversely
affect the performance by the Borrower of any of its obligations hereunder.
(10) The Borrower represents and warrants that the Project has been
completed in accordance with all material federal, State and local laws,
ordinances and regulations applicable thereto.
(11) The availability of financial assistance from the Authority as
provided herein and in the Indenture induced the Borrower to undertake
construction of the Project in the State. The Borrower does not presently
intend to lease the Project.
(12) The Borrower will not take or omit to take any action which
action or omission will in any way cause the proceeds of the Bonds to be
applied in a manner contrary to that provided in the Indenture and the
Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and
knows of no action that any other person, firm or corporation has taken or
intends to take, which would cause interest on the Bonds to be includable in
the gross income of
the recipients thereof for federal income tax purposes. The representations,
certifications and statements of reasonable expectation made by the Borrower
in the Tax Regulatory Agreement and relating to Project description, composite
issues, bond maturity and average asset economic life, use of Bond proceeds,
arbitrage and related matters are hereby incorporated by this reference as
though fully set forth herein.
(14) The Borrower is the owner of the Project and of a 12.205%
undivided interest in the Plant and the Borrower's title thereto is free and
clear of all recorded and properly indexed or filed and properly indexed
encumbrances except for Permitted Encumbrances.
ARTICLE III
THE LOAN
Section 3.1 Loan Clauses. (A) Subject to the conditions and in
accordance with the terms of this Agreement, the Authority agrees to make a
loan to the Borrower from the proceeds of the Bonds in the amount of
$38,500,000 and the Borrower agrees to borrow such amount from the Authority.
(B) Such loan shall be made at the time of delivery of the Bonds and
receipt of payment therefor by the Authority against receipt by the Authority
of the Note duly executed and delivered to evidence the pecuniary indebtedness
of the Borrower hereunder. As and for the loan the Authority shall apply the
proceeds of the Bonds as provided in the Indenture on the terms and conditions
therein prescribed.
(C) The Borrower shall make payments in immediately available funds
to the Trustee for deposit in the Debt Service Fund no later than 11:00 a.m.
on the date on which such payment of principal (including principal called for
redemption) of, premium, if any, or interest on Bonds shall become due in an
amount equal to the payment then coming due on such Bonds less the amounts, if
any, then held in the Debt Service Fund and available to pay the same. The
Borrower may make payments to the Debt Service Fund earlier than required by
this section, but such payments shall not affect the accrual of interest. In
addition, the Borrower shall pay to the Trustee, as and when the same shall
become due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be
appropriately adjusted to reflect the date of issue of Bonds, accrued interest
deposited in the Debt Service Fund, if any, and any purchase or redemption of
Bonds so that there will be available on each payment date the amount
necessary to pay the interest and principal due or coming due on the Bonds and
so that accrued interest will be applied to the installments of interest to
which it is applicable.
(E) The Borrower will further pay to the Tender Agent, in immediately
available funds, on each day on which a payment of the purchase price of a
Bond pursuant to Article IV of the Indenture is required, an amount which will
enable the Tender Agent to make such payment in full in a timely manner;
provided, however, that the obligation of the Borrower to make any such
payment shall be deemed satisfied and discharged to the extent money are
available from the source described in clause (i) of Section 4.5(A) of the
Indenture.
(F) At any time when any principal of the Bonds is overdue, the
Borrower shall also have a continuing obligation to pay to the Trustee for
deposit in the Debt Service Fund an amount equal to interest on the overdue
principal. Redemption premiums shall not bear interest.
(G) In the event the Borrower should fail to make any of the payments
required under the foregoing provisions of this Section 3.1, the item or
installment so in default shall continue as an obligation of the Borrower
until the amount in default shall have been fully paid, and the Borrower
agrees to pay or cause to be paid the same with interest thereon at the rate
determined in accordance with Article II of the Indenture until paid in
accordance herewith and with the Indenture.
Section 3.2 Other Amounts Payable. (A) The Borrower hereby further
expressly agrees to pay to the Trustee as and when the same shall become due,
(i) an amount equal to the initial and annual fees of the Trustee for the
ordinary services of the Trustee rendered and its ordinary expenses incurred
under the Indenture, including fees and expenses as Paying Agent and the fees
and expenses of Trustee's counsel, including fees and expenses as registrar
and in connection with preparation and delivery of new Bonds upon exchanges or
transfers, (ii) the reasonable fees and expenses of the Trustee and any Paying
Agents on the Bonds for acting as paying agents as provided in the Indenture,
including fees and expenses of the Paying Agent as registrar and in connection
with the preparation of new Bonds upon exchanges, transfers or redemptions,
(iii) the reasonable fees and expenses of the Tender Agent for the performance
of its
duties as provided in the Indenture, including reasonable counsel fees and
expenses, (iv) the reasonable fees and expenses of the Remarketing Agent for
the performance of its duties as provided in the Indenture, including the
reasonable fees of their counsel and other expenses the Remarketing Agent may
incur in providing for accurate offering documents in connection therewith,
(v) the reasonable fees and charges of the Trustee for extraordinary services
rendered by it and extraordinary expenses incurred by it under the Indenture,
including reasonable counsel fees and expenses, and (vi) fees and expenses of
Bond Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay directly to the Authority on each
anniversary of the date of issuance of the Bonds a fee equal to one-eighth
(1/8) of 1% of the principal amount of the Bonds then Outstanding, such fee to
be payable, without notice, demand or invoice of any kind, at the Authority's
address as set forth herein or at such other address and to the attention of
such other person, or to such account, as the Authority may stipulate by
written notice to the Borrower.
(C) The Borrower also agrees to pay all amounts payable by it under
the Financing Documents at the time and in the manner therein provided.
Section 3.3 Manner of Payment. The payments provided for in Section
3.1 hereof shall be made by any reasonable method providing immediately
available funds at the time and place of payment directly to the Trustee for
the account of the Authority and shall be deposited in the Debt Service Fund.
The additional payments provided for in Section 3.2 shall be made in the same
manner directly to the entitled party or to the Trustee for its own use or
disbursement to the Paying Agent, as the case may be.
Section 3.4 Obligation Unconditional. The obligations of the
Borrower under the Financing Documents shall be absolute and unconditional,
irrespective of any defense or any rights of setoff, recoupment or
counterclaim it might otherwise have against the Authority or the Trustee.
The Borrower will not suspend or discontinue any such payment or terminate
this Agreement (other than in the manner provided for hereunder) for any
cause, including, without limiting the generality of the foregoing, any acts
or circumstances that may constitute failure of consideration, failure of
title, or commercial frustration of purpose, or any damage to or destruction
of the Project, or the taking by eminent domain of title to or the right of
temporary use of all or any part of the Project, or any change in the tax or
other laws of the United States, the State or any political subdivision of
either thereof, or any failure of the Authority or
the Trustee to perform and observe any agreement or covenant, whether
expressed or implied, or any duty, liability or obligation arising out of or
connected with the Financing Documents.
Section 3.5 Security Clauses. The Authority hereby notifies the
Borrower and the Borrower acknowledges that, among other things, the
Borrower's loan payments and all of the Authority's right, title and interest
under the Financing Documents to which it is a party (except its rights under
Sections 6.2, 6.4 and 7.3 hereof) are being concurrently with the execution
and delivery hereof endorsed, pledged and assigned without recourse by the
Authority to the Trustee as security for the Bonds as provided in the
Indenture.
Section 3.6 Issuance of Bonds. The Authority has concurrently with
the execution and delivery hereof sold and delivered the Bonds under and
pursuant to a resolution adopted by the Authority on August 18, 1999,
authorizing their issuance under and pursuant to the Indenture. The proceeds
of sale of the Bonds shall be applied as provided in Article V of the
Indenture.
Section 3.7 Effective Date and Term. (A) This Agreement shall become
effective upon its execution and delivery by the parties hereto, shall remain
in full force from such date and, subject to the provisions hereof (including
particularly Articles VII and VIII), shall expire on such date as the
Indenture shall be discharged and satisfied in accordance with the provisions
of subsection 12.1(A) thereof. The Borrower's obligations under Sections 6.2
and 6.3 hereof, however, shall survive the expiration of this Agreement.
(B) Within 60 days of such expiration the Authority shall deliver to
the Borrower any documents and take or cause the Trustee, at the Borrower's
expense, to take any such reasonable actions as may be necessary to effect the
cancellation, release and satisfaction of the Indenture and the Financing
Documents.
Section 3.8 Option to Change Modes. The Borrower shall have, and is
hereby granted, the option to elect from time to time to change the Rate
Period for the Bonds in whole or in part from one Rate Period to one or more
Rate Periods in accordance with the provisions of the Indenture and to rescind
such election as provided in the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1 Completion of the Project. (A) The Borrower represents
and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs and
expenses in connection with the preparation of the Financing Documents and the
Indenture, the preparation and delivery of any legal instruments and documents
necessary in connection therewith and their filing and recording, if required,
and all taxes and charges payable in connection with any of the foregoing.
Such costs and all other costs of the refunding of the Prior Obligations shall
be paid by the Borrower.
Section 4.2 No Warranty Regarding Condition, Suitability or Cost of
Project. Neither the Authority, nor the Trustee, nor any Bondholder makes any
warranty, either expressed or implied, as to the Project or its condition or
that it will be suitable for the Borrower's purposes or needs, or that the
insurance required hereunder will be adequate to protect the Borrower's
business or interest, or that the proceeds of the Bonds will be sufficient to
finance the Project.
Section 4.3 Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter be
lawfully assessed or levied upon the Project or any part thereof, or upon the
rents, issues, or profits thereof, whether directly or indirectly. With
respect to special assessments or other governmental charges that may lawfully
be paid in installments over a period of years, the Borrower shall be
obligated to pay only such installments as are required to be paid during the
Term.
(B) The Borrower may, at its expense and in its own name, in good
faith contest any such taxes, assessments and other charges and payments in
lieu of taxes including assessments and, in the event of such contest, may
permit the taxes, assessments or other charges or payments in lieu of taxes,
including assessments so contested to remain unpaid, during the period of such
contest and any appeal therefrom. Nothing herein shall preclude the Borrower,
at its expense and in its own name and behalf, from applying for any tax
exemption allowed by the federal government, the State or any political or
taxing subdivision thereof under any existing or future provision of law which
grants or may grant such tax exemption.
Section 4.4 Insurance. (A) The Borrower shall cause the Project to be
insured against loss or damage by fire, flood, lightning, windstorm, vandalism
and malicious mischief and other hazards, casualties, contingencies and
extended coverage risks in
such amounts and in such manner as is required by applicable federal or state
law and shall pay when due the premiums thereon.
(B) The Borrower further agrees that, to the extent of its ownership
and control of the Project, it will at all times cause to be carried public
liability insurance with respect to the Project to the extent required by
applicable federal or state law.
(C) As an alternative to the hazard insurance and public liability
insurance requirements of subsections (A) or (B) above the Borrower may
self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be effected
under overall blanket or excess coverage policies of the Borrower or any
affiliate and may be carried with any insurer other than an unauthorized
insurer under the Connecticut Unauthorized Insurers Act. The Borrower shall
furnish evidence satisfactory to the Authority or the Trustee, promptly upon
the request of either, that the required insurance coverage is valid and in
force.
Section 4.5 Compliance with Law. The Borrower will observe and
comply with all material laws, regulations, ordinances, rules, and orders
(including without limitation those relating to zoning, land use,
environmental protection, air, water and land pollution, wetlands, health,
equal opportunity, minimum wages, worker's compensation and employment
practices) of any federal, state, municipal or other governmental authority
relating to the Project except during any period during which the Borrower at
its expense and in its name shall be in good faith contesting its obligation
to comply therewith.
Section 4.6 Maintenance and Repair. At its own expense, the Borrower
will keep and maintain or cause the Project to be kept and maintained in
accordance with sound utility operating practice and in good condition,
working order and repair, will not commit or suffer any waste thereon, and
will make all material repairs and replacements thereto which may be required
in connection therewith. Nothing in this Section 4.6 shall (1) apply to any
portion of the Project beyond its useful or economic life or (2) apply to the
use and disposition by the Borrower of any part of the Project in the ordinary
course of its business.
ARTICLE V
CONDEMNATION,
DAMAGE AND DESTRUCTION
Section 5.1 No Abatement of Payments Hereunder. If the Project shall
be damaged or either partially or totally destroyed, or if title to or the
temporary use of the whole or any part thereof shall be taken or condemned by
a competent authority for any public use or purpose, there shall be no
abatement or reduction in the amounts payable by the Borrower hereunder and
the Borrower shall continue to be obligated to make such payments. In any
such case the Borrower shall promptly give written notice thereof to the
Authority and the Trustee.
Section 5.2 Project Disposition Upon Condemnation, Damage or
Destruction. In the event of any such condemnation, damage or destruction the
Borrower shall:
(1) Comply with the applicable provisions of the Sharing Agreement
concerning the repair, reconstruction or restoration of the Project or give
notice to the Authority of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its option
to prepay its loan obligation in full.
Section 5.3 Application of Net Proceeds of Insurance or
Condemnation. The Net Proceeds from any insurance or condemnation award with
respect to the Project shall be applied at the direction of the Borrower with
the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1 The Borrower to Maintain its Corporate Existence;
Conditions under which Exceptions Permitted. (A) The Borrower covenants and
agrees that, during the Term of this Agreement it will maintain its corporate
existence, will continue to be a corporation either organized under the laws
of or duly qualified to do business as a foreign corporation in the State and
in all jurisdictions necessary in the operation of its business, will not
dissolve or otherwise dispose of all or substantially all of its assets and
will not consolidate with or merge into another corporation or permit one or
more other corporations to consolidate with or merge into it.
(B) The Borrower may, however, without violating the agreements
contained in this Section, consolidate with or merge into another corporation
or permit one or more other corporations to consolidate with or merge into it,
or sell or otherwise transfer to another corporation all or substantially all
of its assets as an entity and thereafter liquidate or dissolve, if (a) the
Borrower is the surviving, resulting or transferee corporation, as the case
may be, or (b) in the event the Borrower is not the surviving, resulting or
transferee corporation, as the case may be, such corporation (i) is a solvent
corporation either organized under the laws of or duly qualified to do
business as a foreign corporation subject to service of process in the State
and (ii) assumes in writing all of the obligations of the Borrower herein, and
under the Note.
Section 6.2 Indemnification, Payment of Expenses, and Advances. (A)
The Borrower agrees to protect, defend and hold harmless the Trustee, the
Paying Agent, the Tender Agent, the Authority, the State, agencies of the
State and the members, servants, agents, officers, employees and directors of
the Trustee, the Paying Agent, the Tender Agent, the Authority or the State
(the "Indemnified Parties"), from any claim, demand, suit, action or other
proceeding and any liabilities, costs, and expenses whatsoever by any person
or entity whatsoever, arising or purportedly arising from or in connection
with the Financing Documents, the Indenture, the Bonds, or the transactions
contemplated thereby or actions taken thereunder by any person (including
without limitation the filing of any information, form or statement with the
Internal Revenue Service), except for any willful and material
misrepresentation, willful misconduct or gross negligence on the part of the
Indemnified Parties and except for any bad faith on the part of any
Indemnified Party other than the Authority.
The Borrower agrees to indemnify and hold harmless any Indemnified Party
against any and all claims, demands, suits, actions or other proceedings and
all liabilities, costs and expenses whatsoever caused by any untrue statement
or misleading statement or alleged untrue statement or alleged misleading
statement of a material fact contained in the written information provided by
the Borrower in connection with the issuance or sale of the Bonds or
incorporated by reference therein or caused by any omission or alleged
omission from such information of any material fact required to be stated
therein or necessary in order to make the statements made therein in the light
of the circumstances under which they were made, not misleading.
(B) The Authority, the Trustee and the Tender Agent shall not be
liable for any damage or injury to the persons or property of the Borrower or
its members, directors, officers, agents, servants or employees, or any other
person who may be about the Project due to any act or omission of any person
other than the Authority, the Trustee or the Tender Agent or their respective
members, directors, officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees that no
Indemnified Party shall be liable for, and agrees to hold each Indemnified
Party harmless against, any attorney fees and expenses, expenses or damages
incurred because of any investigation, review or lawsuit commenced by the
Trustee, the Tender Agent or the Authority in good faith with respect to the
Financing Documents, the Indenture, the Bonds and the Project, and the
Authority, the Trustee or the Tender Agent shall promptly give written notice
to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and obligations
of the Authority and the Trustee contained herein shall be deemed to be the
covenants, stipulations, promises, agreements and obligations of the Authority
and the Trustee and
not of any member, director, officer or employee of the Authority or the
Trustee in its individual capacity, and no recourse shall be had for the
payment of the Bonds or for any claim based thereon or hereunder against any
member, director, officer or employee of the Authority or the Trustee or any
natural person executing the Bonds.
(E) In case any action shall be brought against one or more of the
Indemnified Parties based upon any of the above and in respect of which
indemnity may be sought against the Borrower, such Indemnified Party shall
promptly notify the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any such action shall
not relieve it of any liability which it may have to any Indemnified Party
otherwise than under this Section 6.2. In case any such action shall be
brought against any Indemnified Party and it shall notify the Borrower of the
commencement thereof, the Borrower shall be entitled to participate in and, to
the extent that it shall wish, to assume the defense thereof with counsel
satisfactory to such Indemnified Party, and after notice from the Borrower to
such Indemnified Party of the Borrower's election so to assume the defense
thereof, the Borrower shall not be liable to such Indemnified Party for any
subsequent legal or other expenses attributable to such defense, except as set
forth below, other than reasonable costs of investigation subsequently
incurred by such Indemnified Party in connection with the defense thereof.
The Indemnified Party shall have the right to employ its own counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the employment of counsel by such
Indemnified Party has been authorized by the Borrower; (ii) the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Borrower and the Indemnified Party in the conduct of the defense
of such action (in which case the Borrower shall not have the right to direct
the defense of such action on behalf of the Indemnified Party); or (iii) the
Borrower shall not in fact have employed counsel reasonably satisfactory to
the Indemnified Party to assume defense of such action; provided, however,
that Borrower shall not be responsible for the fees and expenses of more than
one such law firm unless an Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between such Indemnified Party and
any other Indemnified Party requiring the use of separate counsel, or Borrower
has not employed counsel which is satisfactory to each Indemnified Party. The
Borrower shall not be liable for any settlement of any action or claim
effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary
out-of-pocket expenses of the Authority in connection with the issuance of the
Bonds, the administration of the Financing Documents and the enforcement of
its rights thereunder.
(G) In the event the Borrower fails to pay any amount or perform any
act under the Financing Documents, the Trustee or the Authority may pay the
amount or perform the act, in which event the costs, disbursements, expenses
and reasonable counsel fees and expenses thereof, together with interest
thereon from the date the expense is paid or incurred at the prime interest
rate generally prevailing among banks in the State on the date of the advance
plus 1% shall be an additional obligation hereunder payable upon demand by the
Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of the
Borrower hereunder, and may be enforced directly by the Authority against the
Borrower irrespective of any action taken by or on behalf of the Owners of the
Bonds.
(I) The obligations of the Borrower under this section,
notwithstanding any other provisions contained in the Financing Documents,
shall survive the termination of this Agreement and shall be recourse to the
Borrower, and for the enforcement thereof any Indemnified Party shall have
recourse to the general credit of the Borrower.
Section 6.3 Incorporation of Tax Regulatory Agreement; Payments Upon
Taxability. (A) For purpose of this Section, the term Owner means the
Beneficial Owner of the Bonds so long as the Book-Entry System is in effect.
(B) The representations, warranties, covenants and statements of
expectation of the Borrower set forth in the Tax Regulatory Agreement are by
this reference incorporated in this Agreement as though fully set forth
herein.
(C) If any Owner of the Bonds receives from the Internal Revenue
Service a notice of assessment and demand for payment with respect to interest
on any Bond (except a notice and demand based upon the assertion that the
Owner of the Bonds is a Substantial User or Related Person), an appeal may be
taken by the Owner of the Bonds at the option of the Borrower. Without
limiting the generality of the foregoing, the Borrower shall have the right to
direct the Trustee to direct the Owner of the Bonds to take such appeal or not
to take such appeal. In either case all expenses of the appeal including
reasonable counsel fees and expenses shall be paid by the Borrower, and the
Owner of the Bonds and the Borrower shall cooperate and consult with each
other in all matters pertaining to any such appeal, except that no Owner of
the Bonds shall be required to disclose or furnish any non-publicly disclosed
information, including, without limitation, financial information and tax
returns.
(D) Not later than 120 days following a Determination of Taxability,
the Borrower shall pay to the Trustee an amount sufficient, when added to the
amount then in the Debt Service Fund and available for such purpose, to retire
and redeem all Bonds then Outstanding (or portion thereof if, in the opinion
of
nationally recognized bond counsel, such partial redemption will preserve the
tax-exempt status of interest on the Bonds Outstanding subsequent to such
redemption, in accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments provided for
in this Section shall be absolute and unconditional, and the failure of the
Authority or the Trustee to execute or deliver or cause to be executed or
delivered any documents or to take any action required under this Agreement or
otherwise shall not relieve the Borrower of its obligation under this
Section. Notwithstanding any other provision of this Agreement or the
Indenture, the Borrower's obligations under this Section shall survive the
termination of this Agreement and the Indenture.
(F) The occurrence of a Determination of Taxability shall not be an
Event of Default hereunder but shall require only the performance of the
obligations of the Borrower stated in this Section, the breach of which shall
constitute an Event of Default as provided in Section 7.1 hereof.
(G) At any time after the issuance of the Bonds, the Authority shall,
upon (1) the release of a published Revenue Ruling by the Internal Revenue
Service and the receipt by the Authority of an opinion of Bond Counsel to the
effect that such ruling may adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes, and (2) receipt from
the Borrower, within 30 days after the Authority has mailed copies of such
ruling and such opinion to the Borrower, of a written request to proceed in
accordance with this Section, proceed to apply for and use its best efforts to
obtain a ruling from the Internal Revenue Service, pursuant to Revenue
Procedure 96-16 or any other procedures subsequently established by the
Internal Revenue Service, as to the qualification or continued qualification
of interest on the Bonds for exclusion from gross income for federal income
tax purposes. The Authority and the Borrower shall cooperate and consult with
each other in all matters pertaining to such ruling request. All expenses of
the Authority in connection with such application including reasonable counsel
fees shall be paid by the Borrower.
Section 6.4 Covenant as to Project Use. (A) The Borrower agrees that
it shall promptly notify the Authority and the Trustee within 30 days of the
occurrence of any of the following events, in each case, whether as a result
of a determination by the Borrower, the Connecticut Department of Public
Utility Control or the United States Nuclear Regulatory Commission or its
successors:
(1) Permanent shutdown of the Plant;
(2) Abandonment of a substantial portion of the Plant at any one time or
in the aggregate;
(3) Any disposition of all or any part of the Borrower's ownership
interest in the Project other than (i) in connection with a merger,
consolidation, or sale of assets permitted by Section 6.1(B) hereof, (ii) in
connection with any form of financing (including without limitation the grant
of a mortgage or security interest or sale in connection with a sale and lease
back) by the Borrower, (iii) of any portion of the Project beyond its useful
or economic life, or (iv) in the ordinary course of the Borrower's business.
(4) Any determination, following damage or destruction of all or
substantially all of the Plant, not to repair, reconstruct, relocate or
replace the Plant.
(B) In the event that the Authority receives notice from the Borrower
of the occurrence of any event described in subsection (A) of this Section
6.4, the Borrower agrees that the Authority may, not later than one year after
the receipt of such notice from the Borrower, declare that payment of all
amounts due under the Financing Documents shall be accelerated by notice to
the Borrower and the Trustee stating that such amounts are due and payable by
the Borrower in full on a date selected by the Borrower and set forth in a
notice to the Trustee and the Authority, which date shall be not later than
three years from the date of mailing of the Authority's acceleration notice to
the Borrower.
(C) Any failure of the Borrower to comply with the provisions of this
Section shall be subject to the provisions of Section 7.3 hereof.
Section 6.5 Further Assurances and Corrective Instruments. The
Authority and the Borrower agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for carrying out the intention of or facilitating the performance of
this Agreement.
Section 6.6 Covenant by Borrower as to Compliance with Indenture.
The Borrower covenants and agrees that it will comply with the provisions of
the Indenture with respect to the Borrower and that the Trustee and the
Bondholders shall have the power and authority provided in the Indenture. The
Borrower further agrees to aid in the furnishing to the Authority or the
Trustee of opinions that may be required under the Indenture. The Borrower
covenants and agrees that the Trustee shall be entitled to and shall have all
the rights, including the right to enforce against the Borrower the provisions
of the Financing Documents, pertaining to the Trustee notwithstanding the fact
that the Trustee is not a party to the Financing Documents.
Section 6.7 Assignment of Agreement or Note. (A) The Borrower may
not assign its rights, interests or obligations hereunder or under the Note
except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer any of
the Financing Documents or the revenues and other receipts, funds and monies
to be received thereunder during the Term except to the Trustee as provided in
this Agreement and the Indenture.
Section 6.8 Inspection. The Authority, the Trustee and their duly
authorized agents shall have (1) the right at all reasonable times to enter
upon and to examine and inspect the Project and (2) such rights of access
thereto as may be reasonably necessary for the proper maintenance and repair
thereof in the event of failure by the Borrower to perform its obligations
under this Agreement, subject, in each case, to all applicable laws, rules,
regulations, orders and guidelines. The Authority and the Trustee shall also
be permitted, at all reasonable times, to examine the books and records of the
Borrower with respect to the Project.
Section 6.9 Default Notification. Within seven (7) days after
becoming aware of any condition or event which constitutes, or with the giving
of notice or the passage of time would constitute, an Event of Default or an
"Event of Default" under Section 8.1 of the Indenture, the Borrower shall
deliver to the Authority, the Remarketing Agent, the Paying Agent and the
Trustee a notice stating the existence and nature thereof and specifying the
corrective steps, if any, the Borrower is taking with respect thereto.
Section 6.10 Covenant Against Discrimination. (A) The Borrower in the
performance of this Agreement will not discriminate or permit discrimination
against any person or group of persons on the grounds of race, color,
religion, national origin, age, sex, sexual orientation, marital status,
physical or learning disability, political beliefs, mental retardation or
history of mental disorder in any manner prohibited by the laws of the United
States or of the State.
(B) The Borrower will comply with the provisions of the resolution
adopted by the Authority on June 14, 1977, as amended, and the policy of the
Authority implemented pursuant thereto concerning the promotion of equal
employment opportunity through affirmative action plans. The resolution
requires that all borrowers receiving financial assistance from the Authority
adopt and implement an affirmative action plan prior to the closing of the
loan. The plan shall be updated annually as long as the Bonds remain
Outstanding.
Section 6.11 Authority Costs and Expenses. The Authority agrees that
it shall in all instances act in good faith in incurring costs, expenses and
legal fees in connection with the transactions contemplated by this Agreement
and the Indenture.
Section 6.12 [Reserved].
Section 6.13 Liens. The Borrower will not incur, assume, create or
suffer to exist any lien on or with respect to any of its properties or
assets, whether now owned or hereafter acquired, or assign any right to
receive income, other than Permitted Encumbrances, unless such lien is
extended to also secure the Borrower's obligations hereunder and under the
Note on a parity basis.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the Borrower in
the Financing Documents or any certificate, statement, data or information
furnished in writing to the Authority or the Trustee by the Borrower in
connection with the closing of the initial issue of the Bonds or included by
the Borrower in its application to the Authority for assistance proves at any
time to have been incorrect when made in any material respect.
(2) Failure by the Borrower to pay any interest, principal or
Redemption Price that has become due and payable with respect to the Bonds.
(3) Failure by the Borrower to pay when due, pursuant to Section
3.1(E) hereof, any amounts necessary to pay the purchase price of Bonds
tendered or deemed to be tendered by the Owners thereof pursuant to Sections
4.1 and 4.2 of the Indenture.
(4) Failure by the Borrower to pay any amount, other than interest,
principal, premium or purchase price with respect to the Bonds, that has
become due and payable pursuant to the Financing Documents and the continuance
of such failure for a period of more than thirty days.
(5) Failure by the Borrower to comply with the default notification
provisions of Section 6.9 hereof.
(6) The occurrence of an "Event of Default" under Section 8.1(A) of
the Indenture.
(7) Failure by the Borrower to observe or perform any covenant,
condition or agreement hereunder or under the Financing Documents (except
those referred to above) and (a) continuance of such failure for a period of
sixty days after receipt by the Borrower of written notice specifying the
nature of such failure or (b) if by reason of the nature of such failure the
same cannot be remedied within the sixty day period, the Borrower fails to
proceed with reasonable diligence after receipt of the notice to cure the
failure.
(8) The Borrower shall (a) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian or the like of itself or of
its property, (b) admit in writing its inability to pay its debts generally as
they become due, (c) make a general assignment for the benefit of creditors,
(d) be adjudicated a bankrupt or insolvent, or (e) commence a voluntary case
under the Federal bankruptcy laws of the United States of America or file a
voluntary petition or answer seeking reorganization, an arrangement with
creditors or an order for relief or seeking to take advantage of any
insolvency law or file an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization or insolvency
proceeding; or corporate action shall be taken by it for the purpose of
effecting any of the foregoing; or if without the application, approval or
consent of the Borrower, a proceeding shall be instituted in any court of
competent jurisdiction, seeking in respect of the Borrower an adjudication in
bankruptcy, reorganization, dissolution, winding up, liquidation, a
composition or arrangement with creditors, a readjustment of debts, the
appointment of a trustee, receiver, liquidator or custodian or the like of the
Borrower or of all or any substantial part of its assets, or other like relief
in respect thereof under any bankruptcy or insolvency law, and, if such
proceeding is being contested by the Borrower in good faith, the same shall
continue undismissed, or pending and unstayed, for any period of 90
consecutive days.
Section 7.2 Remedies on Default. (A) Whenever any Event of Default
shall have occurred, the Trustee, or the Authority where so provided herein,
may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII of
the Indenture, may cause all amounts payable under the Financing Documents to
be immediately due and payable without notice or demand of any kind, whereupon
the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any
Bondholder, may proceed to enforce the obligations of the Borrower to the
Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity it may
have to collect the amounts then due and thereafter to become due, or to
enforce the performance or observance of the obligations, agreements, and
covenants of the Borrower under the Financing Documents.
(B) In the event that any Event of Default or any proceeding taken by
the Authority (or by the Trustee on behalf of the Authority) thereon shall be
waived or determined adversely to the Authority, then the Event of Default
shall be annulled and the Authority and the Borrower shall be restored to
their former rights hereunder, but no such waiver or determination shall
extend to any subsequent or other default or impair any right consequent
thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the Borrower
shall fail to notify the Authority of the occurrence of any event set forth in
Section 6.4(A) hereof within 30 days of the determination thereof as provided
in Section 6.4(A), the Authority may, not later than one year after obtaining
knowledge of such determination and so long as such failure is continuing,
send a notice to the Trustee and the Borrower calling for the acceleration of
all of the Borrower's obligations under the Financing Documents and for the
redemption of all of the Bonds Outstanding. Any such notice (i) shall set
forth in reasonable detail the event giving rise to the Borrower's obligation
under Section 6.4(A), (ii) shall be accompanied by such evidence thereof as
shall be acceptable to the Trustee, and (iii) shall specify the dates upon
which (a) notice of redemption of the Bonds is to be given by the Trustee
(which shall not be less than 180 days from the date of the notice being given
to the Trustee by the Authority) and (b) the date redemption of Bonds is to
occur (which shall be a date at least thirty days after notice of redemption
is to be given by the Trustee).
(B) If, after receipt of notice from the Authority as provided
in Section 6.4(B), the Borrower shall fail to select a date for redemption of
all Outstanding Bonds, the Authority may, not earlier than 60 days prior to
the date which is three years after the date notice was mailed to the Borrower
as provided in Section 6.4(B), send a notice to the Trustee and the Borrower
calling for the redemption of all of the Bonds then Outstanding. Any such
notice shall specify the date that notice of redemption is to be given by the
Trustee and the date that such redemption is to occur.
(C) On or before the redemption date specified by the Trustee
in its notice of redemption pursuant to this Section, the Borrower shall pay,
as a final loan payment hereunder, a sum sufficient, together with other funds
on deposit with the Trustee and available for such purpose, to redeem all
Bonds then Outstanding under the Indenture at 100% of the principal amount
thereof plus accrued interest to the redemption date. The Borrower shall also
pay or provide for all reasonable and
necessary fees of the Trustee and any Paying Agent accrued and to accrue
through the date of redemption of the Bonds and all other amounts due or to
become due under the Financing Documents.
Section 7.4 No Duty to Mitigate Damages. Unless otherwise required
by law, neither the Authority, the Trustee nor any Bondholder shall be
obligated to do any act whatsoever or exercise any diligence whatsoever to
mitigate the damages to the Borrower if an Event of Default shall occur.
Section 7.5 Remedies Cumulative. No remedy herein conferred upon or
reserved to the Authority or the Trustee is intended to be exclusive of any
other available remedy or remedies but each and every such remedy shall be
cumulative and shall be in addition to every remedy given under this Agreement
or now or hereafter existing at law or in equity or by statute. Delay or
omission to exercise any right or power accruing upon any default or failure
by the Authority or the Trustee to insist upon the strict performance of any
of the covenants and agreements herein set forth or to exercise any rights or
remedies upon default by the Borrower hereunder shall not impair any such
right or power or be considered or taken as a waiver or relinquishment for the
future of the right to insist upon and to enforce, by injunction or other
appropriate legal or equitable remedy, strict compliance by the Borrower with
all of the covenants and conditions hereof, or of the right to exercise any
such rights or remedies, if such default by the Borrower be continued or
repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1 Optional Prepayment. (A) The Borrower shall have, and is
hereby granted, the option to prepay its loan obligation and to cause the
corresponding optional redemption of the Bonds pursuant to Section 2.4(A) of
the Indenture at such times, in such amounts, and with such premium, if any,
for such optional redemption as set forth in Section 2.4(A) of the Indenture,
by delivering a written notice to the Trustee in accordance with Section 8.2
hereof, with a copy to the Authority, setting forth the amount to be prepaid,
the amount of Bonds requested to be redeemed with the proceeds of such
prepayment, and the date on which such Bonds are to be redeemed. Such
prepayment must be sufficient to provide monies for the payment of interest
and Redemption Price in accordance with the terms of the Bonds requested to be
redeemed with such prepayment and all other amounts then due under the
Financing Documents. In the event of any complete prepayment of its loan
obligation, the Borrower shall, at the time of such prepayment, also pay or
provide for the payment of all reasonable or necessary fees and expenses of
the Authority, the Trustee , the Tender Agent, the Paying Agent and the
Remarketing Agent accrued and to accrue through the final payment of all the
Bonds. Any such prepayments
shall be applied to the redemption of Bonds in the manner provided in Section
2.4(A) of the Indenture, and credited against payments due hereunder in the
same manner.
(B) The Borrower shall have, and is hereby granted, the option to
prepay its loan obligation in full at any time without premium if any of the
following events shall have occurred, as evidenced in each case by the filing
with the Trustee of a certificate of an Authorized Representative of the
Borrower to the effect that one of such events has occurred and is continuing,
and describing the same:
(1) Damage or destruction of the Plant to such extent that in the
opinion of the Borrower (expressed in a resolution adopted by the Board of
Directors of the Borrower (a "Board Resolution")) and of an architect or
engineer acceptable to the Borrower (who may be an employee of the Borrower),
both filed with the Authority and the Trustee, (a) the Plant cannot be
reasonably repaired, rebuilt, or restored within a period of six (6) months to
its condition immediately preceding such damage or destruction, or (b) normal
operations are prevented from being carried on at the Plant as a result of
such damage or destruction for a period of not less than six (6) months.
(2) Loss of title to or use of a substantial part of the Plant as a
result of the exercise of the power of eminent domain which, in the opinion of
the Borrower (expressed in a Board Resolution) and of an architect or engineer
acceptable to the Borrower (who may be an employee of the Borrower), both
filed with the Authority and the Trustee, prevents or is likely to prevent
normal operations from being carried on at the Plant for a period of not less
than six (6) months.
(3) A change in the Constitution of the State of Connecticut or of
the United States of America or legislative or executive action (whether
local, state, or federal) or a final decree, judgment or order of any court or
administrative body (whether local, state, or federal) which, in the opinion
of nationally recognized bond counsel, causes this Agreement to become void or
unenforceable or impossible of performance in accordance with the intent and
purpose of the parties as expressed herein or, imposes unreasonable burdens or
excessive liabilities upon the Borrower with respect to the Plant or the
operation thereof.
(4) The operation of the Plant shall have been enjoined or shall
otherwise have been prohibited by any order, decree, rule or regulation of any
court or of any local, state, or federal regulatory body, administrative
agency or other governmental body for a period of not less than six (6)
months.
(5) Changes which the Borrower cannot reasonably control in the
economic availability of fuel, materials, supplies, labor, equipment, or other
properties or things necessary for the efficient operation of the Plant shall
have
occurred which, in the judgment of the Borrower (determined in a Board
Resolution), render the continued operation of the Plant uneconomical.
(6) Changes in circumstances, including, but not limited to,
changes in pollution control requirements, shall have occurred such that in
the opinion of the Borrower (expressed in a Board Resolution) use of the
Project is no longer required or desirable.
In any such case the final loan payment shall be a sum sufficient, together
with other funds deposited with Trustee and available for such purpose, to
redeem all Bonds then outstanding under the Indenture at the redemption price
of 100% of the principal amount thereof plus accrued interest to the
redemption date or dates and all other amounts then due under the Financing
Documents, and the Borrower shall also pay or provide for all reasonable or
necessary fees and expenses of the Trustee, the Tender Agent, the Paying Agent
and the Remarketing Agent accrued and to accrue through final payment for the
Bonds. The Borrower shall deliver a written notice to the Trustee, with a
copy to the Authority, requesting the redemption of the Bonds under the
Indenture, which notice shall have attached thereto the applicable certificate
of the Authorized Representative of the Borrower. The Borrower's right to so
request the redemption of the Bonds upon the occurrence of any single event
listed in this Section 8.1(B) shall expire six (6) months, and any such
redemption shall occur within nine (9) months, after such event occurs.
Section 8.2 Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant to
Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, the Tender Agent and the Remarketing Agent at least forty-five (45)
days before the prepayment date.
Section 8.3 Mandatory Prepayment on Taxability. The Borrower shall
pay or cause the prepayment of its loan obligation following a Determination
of Taxability in the manner provided in Section 6.3 of this Agreement.
Section 8.4 Mandatory Prepayment Upon Occurrence of Certain Events.
The Borrower shall pay or cause the prepayment of its loan obligation, prior
to the maturity of the Bonds, on a date selected by the Borrower, which date
shall be not later than three years after the date of mailing to the Borrower
of notice from the Authority of the Authority's election to accelerate the
Borrower's loan obligation hereunder as provided in Sections 6.4 and 7.3
hereof.
ARTICLE IX
GENERAL
Section 9.1 Indenture. (A) Monies received from the sale of the Bonds
and all loan payments made by the Borrower and all other monies received by
the Authority or the Trustee under the Financing Documents shall be applied
solely and exclusively in the manner and for the purposes expressed and
specified in the Indenture and in the Bonds and as provided in this Agreement.
(B) The Borrower shall have and may exercise all the rights, powers
and authority given the Borrower in the Indenture and in the Bonds, and the
Indenture and the Bonds shall not be modified, altered or amended in any
manner which adversely affects such rights, powers and authority or otherwise
adversely affects the Borrower without the prior written consent of the
Borrower.
Section 9.2 Benefit of and Enforcement by Bondholders. The Authority
and the Borrower agree that this Agreement is executed in part to induce the
purchase by others of the Bonds and for the further securing of the Bonds, and
accordingly that all covenants and agreements on the part of the Authority and
the Borrower as to the amounts payable with respect to the Bonds hereunder are
hereby declared to be for the benefit of the holders from time to time of the
Bonds and may be enforced as provided in the Indenture on behalf of the
Bondholders by the Trustee.
Section 9.3 Force Majeure. In case by reason of force majeure either
party hereto shall be rendered unable wholly or in part to carry out its
obligations under this Agreement, then except as otherwise expressly provided
in this Agreement, if such party shall give notice and full particulars of
such force majeure in writing to the other party within a reasonable time
after occurrence of the event or cause relied on, the obligations of the party
giving such notice, other than the obligation of the Borrower to make the
payments required under the terms hereof or of the Note, so far as they are
affected by such force majeure, shall be suspended during the continuance of
the inability then claimed which shall include a reasonable time for the
removal of the effect thereof, but for no longer period, and such parties
shall endeavor to remove or overcome such inability with all reasonable
dispatch. The term "force majeure", as employed herein, means acts of God,
strikes, lockouts or other industrial disturbances, acts of the public enemy,
orders of any kind of the Government of the United States, of the State or any
civil or military authority, insurrections, riots, epidemics, landslides,
lightning, earthquakes, volcanoes, fires, hurricanes, tornadoes, storms,
floods, washouts, droughts, arrests, restraining of government and people,
civil disturbances, explosions, partial or entire failure of utilities,
shortages of labor, material, supplies or transportation, or any other similar
or different
cause not reasonably within the control of the party claiming such inability.
It is understood and agreed that the settlement of existing or impending
strikes, lockouts or other industrial disturbances shall be entirely within
the discretion of the party having the difficulty and that the above
requirements that any force majeure shall be reasonably beyond the control of
the party and shall be remedied with all reasonable dispatch shall be deemed
to be fulfilled even though such existing or impending strikes, lockouts and
other industrial disturbances may not be settled and could have been settled
by acceding to the demands of the opposing person or persons.
Section 9.4 Amendments. This Agreement may be amended only with the
concurring written consent of the Trustee and, if required by the Indenture,
of the Owners of the Bonds given in accordance with the provisions of the
Indenture.
Section 9.5 Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or when mailed by registered or certified mail, postage
prepaid, addressed as follows: if to the Authority, at 000 Xxxxx Xxxxxx, Xxxxx
Xxxx, Xxxxxxxxxxx 00000, Attention: Program Manager - Loan Administration; if
to the Borrower, at 00 Xxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Treasurer; if to the Remarketing Agent, World Financial Center,
Xxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Public Finance
Department; if to the Paying Agent, at 0 Xxxxxx xx Xxxxxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000- 1724, Attention: Corporate Trust Administration; if to
the Trustee, at 0 Xxxxxx xx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000- 1724,
Attention: Corporate Trust Administration; and if to the Tender Agent, at 000
Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attn: Corporate Trust
Department. A duplicate copy of each notice, certificate or other
communication given hereunder by either the Authority or the Borrower to the
other shall also be given to the Trustee. The Authority, the Borrower, the
Remarketing Agent, the Tender Agent, the Paying Agent and the Trustee may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 9.6 Prior Agreements Superseded. This Agreement, together
with all agreements executed by the parties concurrently herewith or in
conjunction with the sale of the Bonds, shall completely and fully supersede
all other prior understandings or agreements, both written and oral, between
the Authority and the Borrower relating to the lending of money and the
Project, including those contained in any commitment letter executed in
anticipation of the issuance of the Bonds.
Section 9.7 Execution of Counterparts. This Agreement may be
executed simultaneously in several counterparts each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 9.8 Time. All references to times of day in this Agreement
are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
executed in its corporate name by a duly Authorized Representative, and the
Borrower has caused this Agreement to be executed in its corporate name by its
duly authorized officer all as of the date first above written.
CONNECTICUT DEVELOPMENT AUTHORITY
By
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
NEW ENGLAND POWER COMPANY
By
Name:
Title:
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Appendix A
PROMISSORY NOTE
New England Power Company
No.1 $38,500,000.00
The New England Power Company, a corporation organized and existing under
the laws of the Commonwealth of Massachusetts (the "Borrower"), for value
received hereby promises to pay to the order of the Connecticut Development
Authority (the "Authority"), the principal sum of $38,500,000.00 on October
15, 2015 together with interest on the unpaid principal balance thereof from
the date hereof until fully and finally paid at maturity, on the applicable
Interest Payment Dates, together with all taxes levied or assessed on this
Note or the debt evidenced hereby against the owner hereof. This Note shall
bear interest at the rate or rates determined in accordance with Section 2.3
of the Indenture (as hereinafter defined) and, as long as the Bonds or any
portion thereof bear interest at Flexible, Daily or Weekly Rates, shall be
computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, based on the year in which the Rate Period for such Bonds
commences, and, as long as the Bonds or any portion thereof bear interest at a
Term Rate, shall be computed on the basis of a 360-day year of twelve 30-day
months. In no event shall the interest rate hereon exceed the maximum
permitted by law.
This Note has been executed under and pursuant to a Loan Agreement, dated
as of September 1, 1999 between the Authority and the Borrower (the
"Agreement"). This Note is issued to evidence the obligation of the Borrower
under the Agreement to repay the loan made by the Authority from the proceeds
of its $38,500,000 Pollution Control Revenue Refunding Bonds (New England
Power Company Project - 1999 Series) (the "Bonds"), together with interest
thereon and all other amounts, fees, penalties, premiums, adjustments,
expenses, counsel fees and other payments of any kind required to be paid by
the Borrower under the Agreement. The Agreement includes provision for
mandatory and optional prepayment of this Note as a whole or in part.
The Agreement and this Note (hereinafter, together with the Tax
Regulatory Agreement, collectively referred to as the "Financing Documents")
have been assigned to State Street Bank and Trust Company (the "Trustee")
acting pursuant to an Indenture of Trust, dated as of September 1, 1999 (the
"Indenture"),
between the Authority and the Trustee. Such assignment is made as security
for the payment of the Bonds issued by the Authority pursuant to the
Indenture.
As provided in Section 3.1 of the Agreement and subject to the provisions
thereof, payments hereon are to be made at the Principal Office of State
Street Bank and Trust Company, Boston, Massachusetts or at the office
designated for such payment by any successor trustee in an amount which,
together with other moneys available therefor pursuant to the Indenture, will
equal the amount payable as principal or Redemption Price of and interest on
the Bonds outstanding under the Indenture on such due date.
The Borrower shall make payments on this Note on the dates and in the
amounts specified herein and in the Agreement and in addition shall make such
other payments as are required pursuant to the Financing Documents, the
Indenture and the Bonds, including without limitation the applicable
Redemption Price or purchase price. In the event of default, as defined in
any of the Financing Documents, the principal of and interest on this Note may
be declared immediately due and payable as provided in the Agreement. Upon
any such declaration the Borrower shall pay all costs, disbursements, expenses
and reasonable counsel fees of the Authority, the Trustee, the Tender Agent
and the Remarketing Agent in seeking to enforce their rights under any of the
Financing Documents.
THE BORROWER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES ITS RIGHTS TO NOTICE AND HEARING AS ALLOWED
UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR OTHERWISE UNDER
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE
HOLDER HEREOF MAY DESIRE TO USE. The Borrower further (1) waives diligence,
demand, presentment for payment, notice of nonpayment, protest and notice of
protest, notice of any renewals or extension of this Note and (2) agrees that
the time for payment of this Note may be changed and extended at the sole
discretion of the Trustee without impairing its liability hereon. Any delay
on the part of the Authority or the Trustee in exercising any right hereunder
shall not operate as a waiver of any such right, and any waiver granted with
respect to one default shall not operate as a waiver in the event of any
subsequent default.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut.
Capitalized terms used in this Note and not otherwise defined shall have
the meaning given to them in Section 1.1 of the Agreement.
IN WITNESS WHEREOF, New England Power Company has caused this Note to be
executed in its corporate name by its duly authorized officer as of September
__, 1999.
NEW ENGLAND POWER COMPANY
By: ________________________________
Name:
Title:
AUTHORITY ENDORSEMENT
Pay to the order of State Street Bank and Trust Company, as Trustee,
without recourse.
CONNECTICUT DEVELOPMENT AUTHORITY
By: ________________________________
Name:
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TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS AND INTERPRETATION................ 3
Section 1.1 - Definitions............................ 3
Section 1.2 - Interpretation......................... 9
ARTICLE II - REPRESENTATIONS AND WARRANTIES............... 9
Section 2.1 - Representations by Authority........... 9
Section 2.2 - Limitation of Control by Borrower......11
Section 2.3 - Representations by the Borrower........11
ARTICLE III - THE LOAN....................................13
Section 3.1 - Loan Clauses...........................13
Section 3.2 - Other Amounts Payable..................14
Section 3.3 - Manner of Payment......................14
Section 3.4 - Obligation Unconditional...............15
Section 3.5 - Security Clauses.......................15
Section 3.6 - Issuance of Bonds......................15
Section 3.7 - Effective Date and Term................15
Section 3.8 - Option to Change Modes.................15
ARTICLE IV - THE PROJECT..................................15
Section 4.1 - Completion of the Project..............16
Section 4.2 - No Warranty Regarding Condition,
Suitability or Cost of Project.........16
Section 4.3 - Taxes..................................16
Section 4.4 - Insurance..............................16
Section 4.5 - Compliance with Law....................17
Section 4.6 - Maintenance and Repair.................17
ARTICLE V - CONDEMNATION, DAMAGE AND DESTRUCTION..........17
Section 5.1 - No Abatement of Payments Herunder......17
Section 5.2 - Project Disposition Upon Condemnation,
Damage or Destruction..................17
Section 5.3 - Application of Net Proceeds of Insurance
or Condemnation........................17
ARTICLE VI - COVENANTS....................................18
Section 6.1 - The Borrower to maintain its Corporate
Existence; Conditions under which
Exceptions Permited....................18
Section 6.2 - Indemnification, Payment of Expenses,
and Advances........................... 18
Section 6.3 - Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.... 20
Section 6.4 - Covenant as to Project Use............. 21
Section 6.5 - Further Assurances and Corrective
Instruments............................ 22
Section 6.6 - Covenant by Borrower as to Compliance
with Indenture......................... 22
Section 6.7 - Assignment of Agreement or Note........ 22
Section 6.8 - Inspection............................. 22
Section 6.9 - Default Notification................... 23
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Section 6.10 -Covenant Against Discrimination........ 23
Section 6.11 -Authority Costs and Expenses........... 23
Section 6.12 -(Reserved)............................. 23
Section 6.13 -Liens.................................. 23
ARTICLE VII - EVENTS OF DEFAULT AND REMEDIES.............. 23
Section 7.1 - Events of Default...................... 23
Section 7.2 - Remedies on Default.................... 24
Section 7.3 - Remedies Upon Project Use Default...... 25
Section 7.4 - No Duty to Mitigate Damages............ 25
Section 7.5 - Remedies Cumulative.................... 26
ARTICLE VIII - PREPAYMENT PROVISIONS...................... 26
Section 8.1 - Optional Prepayment.................... 26
Section 8.2 - Notice by the Borrower of Optional
Prepayment............................. 28
Section 8.3 - Mandatory Prepayment on Taxability..... 28
Section 8.4 - Mandatory Prepayment Upon Occurrence
of Certain Events...................... 28
ARTICLE IX - GENERAL...................................... 28
Section 9.1 - Indenture.............................. 28
Section 9.2 - Benefit of and Enforcement by
Bondholders............................ 28
Section 9.3 - Force Majeure.......................... 28
Section 9.4 - Amendments............................. 29
Section 9.5 - Notices................................ 29
Section 9.6 - Prior Agreements Superseded............ 29
Section 9.7 - Execution of Counterparts.............. 29
Section 9.8 - Time................................... 30
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