Exhibit (10) (i) 66
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NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
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PARTICIPATION AGREEMENT
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Dated as of July 15, 1999
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- relating to -
Pollution Control Refunding Revenue Bonds
(Central Xxxxxx Gas & Electric Corporation Project), 1999 Series A
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; EFFECTIVE DATE
AND DURATION OF PARTICIPATION AGREEMENT
SECTION 1.01. Definitions; Rules of Construction...........................2
SECTION 1.02. Effective Date of Participation Agreement; Duration of
Participation Agreement....................................3
ARTICLE II
REPRESENTATIONS
SECTION 2.01. Representations and Warranties by the Authority..............4
SECTION 2.02. Representations and Warranties by the Corporation............4
ARTICLE III
THE PROJECT; ISSUANCE OF BONDS
SECTION 3.01. The Project..................................................6
SECTION 3.02. Sale of Bonds and Deposit of Proceeds; Liability Under
Bonds......................................................6
SECTION 3.03. No Interest in Project Conferred.............................6
SECTION 3.04. Operation, Maintenance and Repair............................6
SECTION 3.05. Securities Depository........................................7
SECTION 3.06. Investments Under the Indenture..............................7
ARTICLE IV
CORPORATION NOTE AND PAYMENTS; CREDIT SUPPORT
SECTION 4.01. Execution and Delivery of Corporation Note to Trustee........8
SECTION 4.02. Redemption of Bonds..........................................8
SECTION 4.03. Obligation for Payment Absolute; Deficiencies................8
SECTION 4.04. Administration Fees; Expenses, Etc...........................8
SECTION 4.05. Compensation of Fiduciaries..................................9
SECTION 4.06. Project Not Security for Bonds...............................9
SECTION 4.07. Payment of Taxes and Assessments; No Liens or Charges........9
SECTION 4.08. Indemnification of Authority and Fiduciaries................10
SECTION 4.09. Corporation to Pay Attorneys' Fees and Disbursements........10
SECTION 4.10. No Abatement of Administration Fees and Other Charges.......11
SECTION 4.11. Municipal Bond Insurance Policy............................11
ARTICLE V
SPECIAL COVENANTS
SECTION 5.01. No Warranty as to Suitability of Project....................12
SECTION 5.02. Authority's Rights to Inspect Project and Plans and
Specifications............................................12
SECTION 5.03. Corporation Consent to Amendment of Indenture...............12
SECTION 5.04. Tax Covenant................................................12
SECTION 5.05. Corporation Agrees to Perform Obligations Imposed by
Indenture.................................................12
SECTION 5.06. Maintenance of Office or Agency of Corporation..............12
SECTION 5.07. Further Assurances..........................................13
SECTION 5.08. Payment of Taxes and Other Charges..........................13
SECTION 5.09. Maintenance of Properties...................................13
SECTION 5.10. Insurance...................................................13
SECTION 5.11. Proper Books of Record and Account..........................13
SECTION 5.12. Certificates as to Defaults.................................14
SECTION 5.13. Corporation Not to Permit Hindrance or Delay of Payment
of Corporation Note.......................................14
SECTION 5.14. Consolidation, Merger or Sale of Assets.....................14
SECTION 5.15. Financial Statements of Corporation.........................15
SECTION 5.16. Compliance with Laws........................................15
ARTICLE VI
DEFAULTS BY CORPORATION; REMEDIES
SECTION 6.01. Events of Default; Acceleration.............................16
SECTION 6.02. Certain Events of Default; Authority or Trustee May Take
Certain Actions...........................................18
SECTION 6.03. Judicial Proceedings by Trustee.............................18
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Disposition of Amounts After Payment of Bonds...............19
SECTION 7.02. Notices.....................................................19
SECTION 7.03. Successors and Assigns......................................19
SECTION 7.04. Amendment of Participation Agreement ......................20
SECTION 7.05. Assignment and Transfer.....................................20
SECTION 7.06. Participation Agreement Supersedes Any Prior Agreements.....21
SECTION 7.07. Counterparts................................................21
SECTION 7.08. Severability................................................21
SECTION 7.09. NEW YORK LAW TO GOVERN......................................21
EXHIBIT A: FORM OF PROMISSORY NOTE..........................................A-1
EXHIBIT B: DESCRIPTION OF POLLUTION CONTROL FACILITIES......................B-1
This PARTICIPATION AGREEMENT, dated as of July 15, 1999, between NEW
YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, a body corporate and
politic, constituting a public benefit corporation, established and existing
under and by virtue of the laws of the State of New York (the "Authority"), and
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION, a corporation duly organized and
existing and qualified to do business as a public utility under the laws of the
State of New York (the "Corporation"),
W I T N E S S E T H :
WHEREAS, pursuant to a special act of the Legislature of the State of
New York (Title 9 of Article 8 of the Public Authorities Law of New York, as
from time to time amended and supplemented, herein called the "Act"), the New
York State Energy Research and Development Authority (the "Authority") has been
established as a body corporate and politic, constituting a public benefit
corporation;
WHEREAS, pursuant to the Act, the Authority is empowered to contract
with any power company to participate in the incorporation of features in power
plants and the construction of associated facilities to the extent required by
the public interest in development, health, recreation, safety, conservation of
natural resources, and aesthetics;
WHEREAS, pursuant to the Act, the Authority is also empowered to extend
credit and make loans from bond proceeds to any person for the construction,
acquisition, and installation of, or for the reimbursement to any person for
costs in connection with, any special energy project, including, but not limited
to, any land, works, system, building or other improvement and all real and
personal properties of any nature or any interest in any of them which are
suitable for or related to the furnishing, generation, or production of energy;
WHEREAS, the Authority is also authorized under the Act to borrow money
and issue its negotiable bonds and notes to provide sufficient moneys for
achieving its corporate purposes, including the refunding of outstanding
obligations of the Authority;
WHEREAS, the Authority is also authorized under the Act to enter into
any contracts and to execute all instruments necessary or convenient for the
exercise of its corporate powers and the fulfillment of its corporate purposes;
WHEREAS, the Corporation is a public utility corporation doing business
in the State of New York and operates power plants in the State of New York;
WHEREAS, the Corporation has requested that the Authority issue bonds
for the purpose of refunding the Adjustable/Fixed Rate Pollution Control Revenue
Bonds (Central Xxxxxx Gas & Electric Corporation Project), 1984 Series A and the
Adjustable/Fixed Rate Pollution Control Revenue Bonds (Central Xxxxxx Gas &
Electric Corporation Project), 1984 Series B (collectively, the "Prior Bonds"),
of the Authority which were issued to finance a portion of the cost of
construction of certain pollution control, sewage and solid waste disposal and
other facilities at
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the Nine Mile Point Nuclear Generating Station Unit No. 2 located in Scriba,
Oswego County, New York;
WHEREAS, the Authority proposes to issue such bonds and make the
proceeds thereof available to the Corporation to refund the Prior Bonds;
WHEREAS, simultaneously with the issuance and delivery of such bonds,
the Corporation will deliver a promissory note dated the date of issuance of
such bonds as evidence of its obligation to repay the advance of the proceeds of
the bonds; and
WHEREAS, the Authority, pursuant to Resolution No. 943, adopted June
21, 1999, has determined to issue its Pollution Control Refunding Revenue Bonds
(Central Xxxxxx Gas & Electric Corporation Project), 1999 Series A, in an
aggregate principal amount of $33,400,000 (the "Bonds"), for the purpose of
refunding the Prior Bonds, all such Bonds to be issued under and secured by an
Trust Indenture dated as of July 15, 1999, between the Authority and United
States Trust Company of New York, as Trustee (the "Indenture");
NOW, THEREFORE, for and in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, it is hereby agreed by
and between the parties as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; EFFECTIVE DATE
AND DURATION OF PARTICIPATION AGREEMENT
SECTION 1.01. DEFINITIONS; RULES OF CONSTRUCTION. Unless the
context otherwise indicates, terms defined in the Indenture are used herein as
so defined; and:
(a) Words importing the singular number shall include the
plural number and vice versa;
(b) All references herein to particular articles or sections
are references to articles or sections of this Participation Agreement;
(c) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of this
Participation Agreement nor shall they affect its meaning, construction
or effect;
(d) The terms "hereby," "hereof," "hereto," "herein,"
"hereunder" and any similar terms, as used in this Participation
Agreement, refer to this Participation Agreement in its entirety and
not to the particular article or section of this Participation
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Agreement in which they appear, and the term "hereafter" means after,
and the term "heretofore" means before, the effective date of this
Participation Agreement; and
(e) In the event that there is any conflict between the
provisions of this Participation Agreement and those of the Indenture,
the provisions of the Indenture shall govern the disposition of such
conflict.
SECTION 1.02. EFFECTIVE DATE OF PARTICIPATION AGREEMENT;
DURATION OF PARTICIPATION AGREEMENT. This Participation Agreement shall become
effective upon its execution and delivery, and shall continue in full force and
effect until the principal of, and premium, if any, and interest on, the
Corporation Note and Bonds have been fully paid (or provision for their payment
has been made in accordance with the provisions of the Indenture) and all sums
to which the Authority or the Fiduciaries are entitled hereunder have been fully
paid.
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ARTICLE II
REPRESENTATIONS
SECTION 2.01. REPRESENTATIONS AND WARRANTIES BY THE AUTHORITY.
The Authority represents and warrants as follows:
(a) The Authority is a body corporate and politic,
constituting a public benefit corporation, established and existing
under the laws of the State of New York;
(b) The Authority has full power and authority to execute and
deliver this Participation Agreement, the Indenture and the Tax
Regulatory Agreement and to consummate the transactions contemplated
hereby and thereby and to perform its obligations hereunder and
thereunder;
(c) The Authority is not in default under any of the
provisions of the laws of the State of New York which would affect its
existence or its powers referred to in the preceding paragraph (b);
(d) The Authority has determined that its participation in the
financing of the Project, as contemplated by this Participation
Agreement, is in the public interest;
(e) The Authority has duly authorized the execution and
delivery of this Participation Agreement, the Indenture and the Tax
Regulatory Agreement and the execution and delivery of the other
documents incidental to this transaction, and all necessary
authorizations therefor or in connection with the performance by the
Authority of its obligations hereunder or thereunder have been obtained
and are in full force and effect; and
(f) The execution and delivery by the Authority of this
Participation Agreement, the Indenture and the Tax Regulatory Agreement
and the consummation of the transactions herein or therein contemplated
will not violate any indenture, mortgage, loan agreement or other
contract or instrument to which the Authority is a party or by which it
is bound or, to the best of the Authority's knowledge, any judgment,
decree, order, statute, rule or regulation applicable to the Authority.
SECTION 2.02. REPRESENTATIONS AND WARRANTIES BY THE
CORPORATION. The Corporation represents and warrants as follows:
(a) The Corporation is a corporation duly incorporated and in
good standing under the laws of the State of New York, is duly
qualified and authorized to engage in business as a public utility in
the State of New York, has power to enter into, execute and deliver
this Participation Agreement, the Tax Regulatory Agreement and the
Corporation
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Note by proper corporate action and has duly authorized the execution
and delivery by it of this Participation Agreement, the Tax Regulatory
Agreement and the Corporation Note;
(b) The execution and delivery by the Corporation of this
Participation Agreement, the Tax Regulatory Agreement and the
Corporation Note and the consummation of the transactions herein
contemplated do not conflict with or constitute a breach of or a
default under the Corporation's Certificate of Incorporation, By-Laws
or any indenture, mortgage, loan agreement or other contract or
instrument to which the Corporation is a party or by which it is bound
or, to the best of the Corporation's knowledge, any judgment, decree,
order, statute, rule or regulation applicable to the Corporation;
(c) This Participation Agreement, the Tax Regulatory Agreement
and the Corporation Note constitute valid and legally binding
obligations of the Corporation, enforceable against the Corporation in
accordance with their respective terms, except as the right of
indemnity hereunder may be limited by principles of public policy and
except as enforcement may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other laws, judicial
decisions or principles of equity relating to or affecting the
enforcement of creditors' rights or contractual obligations generally
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(d) The issuance and delivery by the Corporation of the
Corporation Note in the manner and for the purposes herein set forth
have been duly authorized by the Public Service Commission of the State
of New York;
(e) No additional authorizations for or approvals of the
execution and delivery by the Corporation of this Participation
Agreement, the Tax Regulatory Agreement and the Corporation Note need
be obtained by the Corporation or if any such authorization or approval
is necessary it has been obtained; and
(f) The representations of the Corporation set forth in the
Tax Regulatory Agreement are hereby incorporated by reference as though
fully set forth herein.
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ARTICLE III
THE PROJECT; ISSUANCE OF BONDS
SECTION 3.01. THE PROJECT. The Corporation represents that the
Project is complete. The Project belongs to and is the property of the
Corporation. In order to effectuate the purposes of this Participation
Agreement, the Corporation will do or cause to be done all things requisite or
proper for the fulfillment of the obligations of the Corporation under this
Participation Agreement.
SECTION 3.02. SALE OF BONDS AND DEPOSIT OF PROCEEDS; LIABILITY
UNDER BONDS. (a) In order to refund the Prior Bonds, the Authority, as soon as
practicable after the execution of this Participation Agreement will issue, sell
and deliver the Bonds to the Underwriters thereof, all pursuant to and as
provided in the Bond Purchase Agreement for the Bonds among the Authority, the
Corporation and the Underwriters and will deposit the proceeds of such sale of
the Bonds with the Trustee in the Proceeds Fund.
(b) The Bonds shall not be general obligations of the
Authority, and shall not constitute an indebtedness of, or a charge against the
general credit of, the Authority or give rise to any pecuniary liability of the
Authority. The liability of the Authority under the Bonds shall be enforceable
only to the extent provided in the Indenture, and the Bonds shall be payable
solely from the Corporation Note Payments, any payments by the Corporation under
Section 4.11, and any other funds held by the Trustee under the Indenture and
available for such payment. The Bonds shall not be a debt of the State of New
York, and the State of New York shall not be liable thereon.
SECTION 3.03. NO INTEREST IN PROJECT CONFERRED. Neither the
Authority nor the Trustee shall be entitled to any interest in the Project by
reason of the advance of Xxxx proceeds pursuant to this Participation Agreement.
SECTION 3.04. OPERATION, MAINTENANCE AND REPAIR. The Authority
and the Corporation recognize that the Project constitutes integrated portions
of the electric energy and production facilities of the Corporation and its
co-tenants and that it is not feasible to administer the Project separately from
such facilities. The Corporation shall operate the Project or cause the Project
to be operated (with such changes, improvements or additions as the Corporation
may deem desirable) as part of such facilities for the joint useful life of the
Project and such facilities, shall maintain and repair the Project or cause the
Project to be maintained and repaired in conformity with the Corporation's and
its co-tenants' normal maintenance and repair programs for such facilities and
shall proceed in good faith to maintain the availability of the Project for use
as an authorized project under the Act; but the Corporation and its co-tenants
shall have no obligation to operate, maintain or repair or cause to be operated,
maintained, or repaired, or proceed in good faith to maintain the availability
of the Project for use as an authorized project under the Act with respect to,
any element or item of the Project the operation, maintenance, or repair of
which becomes uneconomic to the Corporation because of damage or destruction or
obsolescence
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(including physical, functional and economic obsolescence), or change in
government standards and regulations, or the termination of the operation of the
portion of such facilities to which the element or item of the Project is an
adjunct, or the sale, transfer or other disposition by the Corporation of its
interest in such facilities.
SECTION 3.05. SECURITIES DEPOSITORY. The Corporation
acknowledges that the Authority and the Trustee, at the request of the
Corporation, have arranged for the initial deposit of the Bonds with The
Depository Trust Company ("DTC") which will act as Securities Depository in
order to effectuate a book-entry-only system and that this system may be
discontinued or, if discontinued, reinstituted (with DTC or another Securities
Depository) in accordance with the Indenture. The Corporation agrees to take all
actions necessary, and to refrain from taking actions contrary to the
effectuation of a book-entry-only system established pursuant to the Indenture
and any arrangements among the Authority, the Trustee and any Securities
Depository. The Authority shall not enter into any written agreements with a
Securities Depository without receipt and acceptance of such agreements by the
Corporation.
SECTION 3.06. INVESTMENTS UNDER THE INDENTURE. Any money held
in any fund under the Indenture shall be invested and reinvested as provided in
the Tax Regulatory Agreement and Article IX of the Indenture.
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ARTICLE IV
CORPORATION NOTE AND PAYMENTS; CREDIT SUPPORT
SECTION 4.01. EXECUTION AND DELIVERY OF CORPORATION NOTE TO
TRUSTEE. (a) Concurrently with the authentication by the Trustee and delivery by
the Authority of the Bonds and in order to evidence the obligation of the
Corporation to the Authority to repay the advance of the proceeds of the Bonds,
the Authority hereby directs the Corporation, and the Corporation hereby agrees,
to execute and deliver to the Trustee its Corporation Note and to duly and
punctually pay the principal of, premium, if any, and interest on, the
Corporation Note at the place, the times and in the manner provided therein. The
Corporation Note shall be substantially in the form attached hereto as Exhibit
A.
(b) The obligation of the Corporation to make any payment of
principal of, and premium, if any, and interest on, the Corporation Note shall
not be deemed satisfied and discharged by any payment under the Policy.
SECTION 4.02. REDEMPTION OF BONDS. Whenever Bonds are
redeemable in whole or in part, the Authority will redeem the same at the
written direction of an Authorized Corporation Representative given in
accordance with Section 5.01 of the Indenture. Expenses in connection with the
redemption of Bonds shall be paid by the Corporation.
SECTION 4.03. OBLIGATION FOR PAYMENT ABSOLUTE; DEFICIENCIES.
The Corporation agrees that its obligation to make the Corporation Note Payments
and payments under Section 4.11 at the times and in the amounts provided in the
Corporation Note and this Participation Agreement shall be absolute, irrevocable
and unconditional and shall not be subject to any defense (other than payment)
or any right of set-off, counterclaim or recoupment for any reason, including,
without limitation, the unenforceability (because of judicial decision or
otherwise) or the impossibility of performance of the Corporation Note
obligations, or any breach by the Authority of any obligation to the
Corporation, whether under this Participation Agreement or otherwise, or
inaccuracy of any representation by the Authority to the Corporation under this
Participation Agreement or in any other instrument, or any indebtedness or
liability at any time owing to the Corporation by the Authority, or the
destruction by fire or other casualty of the Project or any portion thereof, or
the taking of title thereto or the use thereof by the exercise of the power of
eminent domain. If for any reason Corporation Note Payments, together with other
money held by the Trustee and then available for such purpose, would not be
sufficient to make the corresponding payments of principal of, and premium, if
any, and interest on, the Bonds when such payments are due, the Corporation will
pay the amounts required from time to time to make up any such deficiency.
SECTION 4.04. ADMINISTRATION FEES; EXPENSES, ETC. In order to
defray a portion of the expenses incurred by the Authority in conducting and
administering its programs for the acquisition and construction of facilities
for the furnishing of electricity, special energy projects and the development
of advanced technologies, the Corporation shall pay to the Authority an initial
Administration Fee in the amount of $83,500 on the date of the authentication
and delivery of the
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Bonds and an annual fee equal to $130 per million dollar principal amount of the
Bonds on August 1 of each year commencing August 1, 2000, based upon the amount
of Bonds Outstanding as of such August 1 and for purposes of the calculation of
such fee, rounding up to the nearest whole million dollars, and all reasonable
expenses, disbursements, advances, taxes, assessments or impositions, not
otherwise paid under this Participation Agreement or the Indenture, incurred by
or imposed upon the Authority in connection with its administration and
enforcement of, and compliance with, this Participation Agreement and the
Indenture, which amounts the Company is obligated to pay, including, but not
limited to, reasonable attorneys' fees.. In addition, the Corporation shall pay
to the State of New York with respect to the Bonds a bond issuance charge in the
amount of $116,900 on the date of authentication and delivery of the Bonds.
SECTION 4.05. COMPENSATION OF FIDUCIARIES. The Corporation
agrees:
(1) to pay to the Trustee from time to time upon its request
reasonable compensation for all services rendered by it in any capacity
under the Indenture (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as so otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred by it in any capacity under the
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad
faith or willful misconduct; and
(3) to pay to the Fiduciaries, other than the Trustee, from
time to time upon their request, reasonable compensation for all
services rendered by them under the Indenture and reimburse them for
their reasonable expenses incurred under the Indenture (including
reasonable compensation and expenses and disbursements of their agents
and counsel), except any such expense as may be attributable to their
negligence, bad faith or willful misconduct.
SECTION 4.06. PROJECT NOT SECURITY FOR BONDS. It is expressly
recognized by the parties hereto that neither the Project nor any other property
of the Corporation will constitute any part of the security for the Bonds.
SECTION 4.07. PAYMENT OF TAXES AND ASSESSMENTS; NO LIENS OR
CHARGES. The Corporation will (a) pay, when the same shall become due, all taxes
and assessments, including income, profits, property or excise taxes, if any, or
other municipal or governmental charges, imposed, levied or assessed by the
Federal, state or any municipal government upon the Authority or any Fiduciary
in respect of any payments (other than payments made pursuant to Sections 4.04
and 4.05) made or to be made pursuant to this Participation Agreement or the
Corporation Note and (b) pay or cause to be discharged, within 60 days after the
same shall accrue, any lien or charge upon any such payment made or to be made
under this Participation Agreement, provided that the Corporation shall not be
required to pay any such tax or assessment so long as (i) the
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Corporation at its expense contests, by appropriate legal proceedings conducted
in good faith and with due diligence, the amount, validity or application of any
such tax, assessment or charge, (ii) such proceedings shall have the effect of
suspending the collection thereof from the Authority or such Fiduciary, and
(iii) the Corporation shall indemnify and hold the Authority and each Fiduciary
harmless from any losses, costs, charges, expenses (including reasonable
attorneys' fees and disbursements), judgments and liabilities arising in respect
of such tax, assessment or charge and the nonpayment thereof.
SECTION 4.08. INDEMNIFICATION OF AUTHORITY AND FIDUCIARIES.
Any obligation of the Authority created by or arising out of this Participation
Agreement shall be a limited obligation of the Authority, payable solely from
the Corporation Note Payments, any payments by the Corporation under Section
4.11, funds paid under the Policy and any other funds held by the Trustee under
the Indenture and available for such payment, and shall not constitute an
indebtedness of or a charge against the general credit of the Authority and
shall not constitute or give rise to any pecuniary liability of the Authority;
nevertheless, if the Authority shall incur any such pecuniary liability, then in
such event the Corporation shall indemnify and hold the Authority harmless by
reason thereof. The Corporation releases the Authority and the Fiduciaries from,
agrees that the Authority and the Fiduciaries and the Indexing Agents shall not
be liable for, and agrees to indemnify and hold the Authority and the
Fiduciaries harmless from, any liability for any loss or damage to property or
any injury to or death of any person that may be occasioned by any cause
whatsoever arising out of the construction or operation of the Project. The
Corporation agrees to indemnify and hold the Authority, its members, officers
and employees and the Fiduciaries harmless from any losses, costs, charges,
expenses (including reasonable attorneys' fees and disbursements), judgments and
liabilities incurred by it or them, as the case may be, in connection with any
claims made, or any action, suit or proceeding instituted or threatened, in
connection with the transactions contemplated by this Participation Agreement or
the Indenture (i) so long as, in the case of the Authority, its members,
officers and employees, it or they, as the case may be, have acted in good faith
to carry out the transactions contemplated by this Participation Agreement and
the Indenture and (ii) so long as, in the case of the Fiduciaries, it or they
shall not have acted negligently, in bad faith or with willful misconduct in
carrying out the transactions contemplated by this Participation Agreement and
the Indenture.
SECTION 4.09. CORPORATION TO PAY ATTORNEYS' FEES AND
DISBURSEMENTS. If the Corporation shall default under any of the provisions of
this Participation Agreement and the Authority or the Trustee or both of them
shall employ attorneys or incur other expenses for the collection of payments
due under this Participation Agreement or for the enforcement of performance or
observance of any obligation or agreement on the part of the Corporation
contained in this Participation Agreement, the Corporation will on demand
therefor reimburse the reasonable fees of such attorneys and such other
reasonable disbursements so incurred.
SECTION 4.10. NO ABATEMENT OF ADMINISTRATION FEES AND OTHER
CHARGES. It is understood and agreed that, so long as any Bonds are outstanding
under the Indenture, Administration Fees and other charges payable to the
Authority pursuant to this Participation Agreement shall continue to be payable
at the times and in the amounts herein specified, whether
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or not the Project, or any portion thereof, shall have been destroyed by fire or
other casualty, or title thereto or the use thereof shall have been taken by the
exercise of the power of eminent domain, and that there shall be no abatement of
any such Administration Fees and other charges by reason thereof.
SECTION 4.11. MUNICIPAL BOND INSURANCE POLICY. In order to
secure the payment of principal and interest on the Bonds the Corporation has
obtained the Policy.
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ARTICLE V
SPECIAL COVENANTS
SECTION 5.01. NO WARRANTY AS TO SUITABILITY OF PROJECT. The
Authority makes no warranty, either express or implied, with respect to actual
or designed capacity of the Project, as to the suitability of the Project for
the purposes specified in this Participation Agreement, as to the condition of
the Project, or as to the suitability of the Project for the Corporation's
purposes or needs.
SECTION 5.02. AUTHORITY'S RIGHTS TO INSPECT PROJECT AND PLANS
AND SPECIFICATIONS. The Authority shall have the right at all reasonable times
to examine and inspect the Project and, to the extent reasonably available, the
plans and specifications therefor and such other information and records
relating to the Project as may be reasonably necessary to establish the
qualification of the Project for financing under the Act and compliance with
this Participation Agreement.
SECTION 5.03. CORPORATION CONSENT TO AMENDMENT OF INDENTURE.
The Authority shall not enter into any indenture supplemental to or amendatory
of the Indenture without the prior consent of the Corporation as evidenced by a
certificate in writing signed by an Authorized Corporation Representative.
SECTION 5.04. TAX COVENANT. Notwithstanding any other
provision hereof, the Corporation covenants and agrees that it will not take or
authorize or permit any action to be taken with respect to the Project, or the
proceeds of Bonds, including any amounts treated as proceeds of the Bonds for
any purpose of Section 103 of the Code, which will result in the loss of the
exclusion of interest on the Bonds from gross income for Federal income tax
purposes under Section 103 of the Code (except for any Bond during any period
while any such Bond is held by a person referred to in Section 147(a) of the
Code). This provision shall control in case of conflict or ambiguity with any
other provision of this Participation Agreement. In furtherance of such covenant
and agreement, the Authority and the Corporation have entered into the Tax
Regulatory Agreement and the Corporation hereby agrees to comply with the
provisions thereof insofar as the Tax Regulatory Agreement relates to the Bonds.
SECTION 5.05. CORPORATION AGREES TO PERFORM OBLIGATIONS
IMPOSED BY INDENTURE. The Corporation agrees to perform such obligations as may
be required of it by the provisions of the Indenture.
SECTION 5.06. MAINTENANCE OF OFFICE OR AGENCY OF CORPORATION.
The Corporation will at all times keep in Poughkeepsie, New York, or another
location in the State of New York, an office or agency where notices and demands
to or upon the Corporation with respect to the Corporation Note and this
Participation Agreement may be served, and will, from time to time, give written
notice to the Trustee and the Authority of the location of such office or
agency; and, in case the Corporation shall fail so to do, notices may be served
and demands may be made at the principal office of the Trustee.
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SECTION 5.07. FURTHER ASSURANCES. Upon request of the Trustee
in writing, the Corporation will make, execute, acknowledge and deliver, or
cause to be made, executed, acknowledged and delivered, to the Trustee any and
all such further acts, instruments or assurances as may be reasonably required
for effectuating the intention of this Participation Agreement and the
Corporation Note.
SECTION 5.08. PAYMENT OF TAXES AND OTHER CHARGES. The
Corporation will promptly pay and discharge, or cause to be paid and discharged,
as the same become due and payable, any and all taxes, rates, levies,
assessments, and governmental liens, claims and other charges at any time
lawfully imposed or accruing upon or against the Corporation or upon or against
its properties or any part thereof, or upon the income derived therefrom or from
the operations of the Corporation, provided that the Corporation shall not be
required to pay or discharge, or cause to be paid or discharged, any such
obligation, tax, rate, levy, assessment, lien, claim or other charge so long as
in good faith and by appropriate legal proceedings the validity thereof shall be
contested.
SECTION 5.09. MAINTENANCE OF PROPERTIES. The Corporation will
at all times make or cause to be made such expenditures for repairs, maintenance
and renewals, or otherwise, as shall be necessary to maintain its properties in
good repair, working order and condition as an operating system or systems to
the extent necessary to meet the Corporation's obligations under the Public
Service Law of the State of New York and this Participation Agreement; provided,
however, that nothing herein contained shall be construed to prevent the
Corporation from ceasing to own or operate any of its plants or any other
property, if, in the judgment of the Corporation, it is advisable not to own or
operate the same and the ownership or operation thereof shall not be essential
to the maintenance and continued operation of the rest of the operating system
or systems, and the security under the Indenture afforded by the Corporation
Note will not be substantially impaired by the termination of such operation.
SECTION 5.10. INSURANCE. The Corporation will keep or cause to
be kept such parts of its properties as, in the opinion of an Authorized
Corporation Representative (who shall for this purpose be a professional
experienced in corporate risk management or a licensed professional engineer),
are of an insurable nature, insured against loss or damage by fire or other
casualties, the risk of which is customarily insured against by companies
similarly situated and operating like properties, to the extent that property of
similar character is customarily insured against by such companies, either (a)
by reputable insurers or (b) in whole or in part in the form of reserves or of
one or more insurance funds created by the Corporation, whether alone or with
other corporations.
SECTION 5.11. PROPER BOOKS OF RECORD AND ACCOUNT. The
Corporation will at all times keep or cause to be kept proper books of record
and account, in which full, true and correct entry will be made of all dealings,
business and affairs of the Corporation, including proper and complete entries
to capital or property accounts covering property worn out, obsolete, abandoned
or sold, all in accordance with the requirements of any system of accounting or
keeping accounts or the rules, regulations or orders prescribed by a regulatory
commission with
13
jurisdiction over the rates of the Corporation giving rise to more than 50% of
the Corporation's gross revenues, or if there are no such requirements or rules,
regulations or orders, then in compliance with generally accepted accounting
principles.
SECTION 5.12. CERTIFICATES AS TO DEFAULTS. The Corporation
shall file with the Trustee, on or before November 1 of each year, a certificate
signed by an Authorized Corporation Representative stating that, to the best of
his knowledge, information and belief, the Corporation has kept, observed,
performed and fulfilled or caused to be kept, observed, performed and fulfilled
each and every one of its covenants and obligations contained in this
Participation Agreement and in the Corporation Note and, to the best of his
knowledge, information and belief, there does not exist at the date of such
certificate any default by the Corporation under this Participation Agreement or
any event of default hereunder or other event which, with notice or the lapse of
time specified in Section 6.01, or both, would become an event of default or, if
any such default or event of default or other event shall so exist, specifying
the same and the nature and status thereof.
SECTION 5.13. CORPORATION NOT TO PERMIT HINDRANCE OR DELAY OF
PAYMENT OF CORPORATION NOTE. The Corporation will not voluntarily do, suffer or
permit any act or thing intended to hinder or delay the payment of the
indebtedness evidenced by the Corporation Note.
SECTION 5.14. CONSOLIDATION, MERGER OR SALE OF ASSETS. (a) The
Corporation will not consolidate with or permit itself to be merged into any
individual, corporation, partnership, joint venture, trust, limited liability
Corporation or corporation, unincorporated organization or government or any
political subdivision thereof, or any department, agency authority or other
instrumentality of any government or political subdivision thereof (each, a
"Person") or Persons or convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets (any such conveyance, transfer,
lease or other disposition, a "Transfer"), except in the manner and upon the
terms and conditions set forth in this Section 5.14.
(b) Nothing contained in this Participation Agreement shall
prevent (and this Participation Agreement shall be construed as permitting and
authorizing) any lawful consolidation or merger of the Corporation with or into
any other Person lawfully authorized to acquire and operate the properties of
the Corporation, or a series of consolidations or mergers, or successive
consolidations or mergers, in which the Corporation or its successor or
successors shall be a party, or any Transfer to a Person lawfully authorized to
acquire and operate the same; provided that upon any consolidation, merger or
Transfer, the Person formed by such consolidation, or into which such merger may
be made if other than the Corporation, or the Person that is a transferee in a
Transfer shall execute and deliver to the Trustee an instrument, in form
satisfactory to the Trustee, whereby such Person shall effectually assume the
due and punctual payment of the principal of, and premium, if any, and interest
on, the Corporation Note according to its tenor and the due and punctual
performance and observance of all covenants and agreements to be performed by
the Corporation pursuant to this Participation Agreement, the Tax Regulatory
Agreement and the Corporation Note; and, thereupon, the Corporation shall be
released from its obligations under this Participation Agreement and under the
Tax Regulatory Agreement and the Corporation Note.
14
(c) Every such successor Person (or transferee Person under
Section 7.06) shall possess, and may exercise, from time to time, each and every
right and power of the Corporation hereunder and under the Note, in its name or
otherwise; and any act, proceeding, resolution or certificate by any of the
terms of this Participation Agreement, the Tax Regulatory Agreement and the
Corporation Note required or provided to be done, taken and performed or made,
executed or verified by any board or officer of the Corporation shall and may be
done, taken and performed or made, executed or verified with like force and
effect by the corresponding board or officer of any such successor Person.
(d) If consolidation, merger or sale or other Transfer is made
as permitted by this Section, the provisions of this Section shall continue in
full force and effect and no further consolidation, merger or Transfer shall be
made except in compliance with the provisions of this Section.
SECTION 5.15. FINANCIAL STATEMENTS OF CORPORATION. So long as
the Corporation is a publicly-owned corporation, it shall (a) furnish the
Trustee and the Bond Insurer with a copy of its annual report to shareholders
for each year, beginning with the year 1999, on or before March 31 of the
subsequent year or as soon thereafter as it is reasonably available, and (b)
furnish to the Trustee, to the Bond Insurer, and to any owner of the Bonds if
requested in writing by such owner, all financial statements which it sends to
its shareholders generally. While the Policy is in effect, the Corporation shall
furnish to the Bond Insurer such additional information it may reasonably
request. To the extent that the Corporation has entered into a continuing
disclosure undertaking pursuant to Rule 15c2-12 under the Securities Exchange
Act as in effect on the date of this Participation Agreement or any successor
thereto (the "Rule") with respect to the Bonds, the Bond Insurer shall be
included as party to receive notices of all material events (as described in
paragraph (b)(5)(i)(C) of the Rule).
SECTION 5.16. COMPLIANCE WITH LAWS. The Corporation agrees to
use its best efforts to comply in all material respects with all applicable
laws, rules and regulations and orders of any governmental authority,
non-compliance with which would materially adversely affect the Corporation's
ability to perform its obligations hereunder or under the Tax Regulatory
Agreement or the Corporation Note, except laws, rules, regulations or orders
being contested in good faith or laws, rules, regulations or orders for which
the Corporation has applied for variances from or exceptions to.
15
ARTICLE VI
DEFAULTS BY CORPORATION; REMEDIES
SECTION 6.01. EVENTS OF DEFAULT; ACCELERATION. In case one or
more of the following events of default (each, an "event of default") shall have
occurred and be continuing:
(a) failure by the Corporation to pay when due any amount
required to be paid under this Participation Agreement or the
Corporation Note, which failure causes a default in the payment when
due of the interest on any of the Bonds and continuance of such default
for five Business Days;
(b) failure by the Corporation to pay when due any amount
required to be paid under this Participation Agreement or the
Corporation Note, which failure causes a default in the payment when
due of the principal of, or premium, if any, on any of the Bonds;
provided that, with respect to any payment of principal of, or premium,
if any, payable on Bonds called for redemption, such failure by the
Corporation shall continue for five Business Days; or
(c) failure on the part of the Corporation duly to observe or
perform any other of the covenants or agreements on the part of the
Corporation contained in this Participation Agreement (other than
failure to pay amounts required to be paid under Sections 4.04, 4.05,
4.07, 4.08, 4.09 or 4.10) or in the Corporation Note for a period of 90
days after the date on which written notice of such failure, requiring
the Corporation to remedy the same, shall have been given to the
Corporation by the Authority or the Trustee, provided, however, that,
if such failure is such that it cannot be corrected within such 90-day
period, it shall not constitute an event of default if corrective
action is instituted by the Corporation within such 90-day period and
diligently pursued until such failure is corrected; or
(d) an Act of Bankruptcy relating to the Corporation;
then, and in any such event, the Trustee with the consent of the Bond Insurer,
may, and upon the written request of the Bond Insurer or the owners of at least
25% in aggregate principal amount of the Bonds then outstanding with the consent
of the Bond Insurer shall, by notice in writing to the Corporation and the Bond
Insurer and provided that the default has not theretofore been cured, declare
the Corporation Note to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything contained in this Participation Agreement or in the Corporation Note to
the contrary notwithstanding. Any amounts collected by the Trustee pursuant to
action taken under this Section 6.01 shall be applied in accordance with the
Indenture. In addition, if at any time the principal of the Bonds shall have
been declared to be due and payable by acceleration pursuant to the terms of the
Indenture, the Corporation Note shall thereupon become and be immediately due
and payable, subject to such declaration with respect to the Bonds being
rescinded or annulled pursuant to the Indenture.
16
The right or obligation of the Trustee to make any such
declaration as aforesaid, however, is subject to the condition that if, at any
time after declaration, but before all the Bonds shall have matured by their
terms, the principal of, premium, if any, and interest on, the Corporation Note
which shall have become due and payable otherwise than by such declaration, and
all other sums payable hereunder, except the principal of, and interest on, the
Corporation Note which shall have become due and payable by such declaration,
shall have been paid or provision satisfactory to the Trustee shall have been
made for such payment, and the reasonable expenses of the Trustee and of the
owners of the Bonds incurred pursuant to the Indenture shall have been paid,
including reasonable attorneys' fees paid or incurred, and all defaults
hereunder and under the Bonds or under the Indenture, except as to the payment
of principal and interest due and payable solely by reason of such declaration,
shall be made good or be secured to the satisfaction of the Trustee or provision
deemed by the Trustee to be adequate shall be made therefor, then and in every
such case the owners of a majority in aggregate principal amount of the Bonds
then outstanding, by written notice to the Authority and to the Trustee, may
rescind such declaration and annul such default in its entirety, or, if the
Trustee shall have acted in the absence of a written request of the owners of at
least 25% in aggregate principal amount of the outstanding Bonds, and if there
shall not have been theretofore delivered to the Trustee written direction to
the contrary by the owners of at least 25% in aggregate principal amount of the
outstanding Bonds, then any such declaration shall ipso facto be deemed to be
rescinded and any such default and its consequences shall ipso facto be deemed
to be annulled, but no such rescission and annulment shall extend to or affect
any subsequent default or impair or exhaust any right or power consequent
thereon.
Anything in this Participation Agreement to the contrary
notwithstanding, upon the occurrence and continuance of an event of default as
defined herein, the Bond Insurer (if not in default) shall be entitled to
control and direct the enforcement of all rights and remedies granted to the
Bondholders or the Trustee for the benefit of the Bondholders under this
Participation Agreement, including, without limitation: (i) the right to
accelerate the principal of the Corporation Note as described in this
Participation Agreement, and (ii) the right to rescind any declaration of
acceleration, and the Bond Insurer shall also be entitled to approve all waivers
of events of default.
In case the Trustee shall have proceeded to enforce any right
under this Participation Agreement or the Corporation Note and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee, then and in every such case the
Corporation, the Authority and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Corporation, the Authority and the Trustee shall continue as though no
such proceedings had been taken.
In the event of any Act of Bankruptcy, reorganization or
liquidation, the Bond Insurer shall have the right to vote on behalf of all
Bondholders absent a default by the Bond Insurer under the Policy.
17
SECTION 6.02. CERTAIN EVENTS OF DEFAULT; AUTHORITY OR TRUSTEE
MAY TAKE CERTAIN ACTIONS. In case the Corporation shall have failed to comply
with its obligations under Article III or under Sections 4.04, 4.08, 4.09, 4. 10
or 5.16, which event shall have continued for a period of 90 days after the date
on which written notice of such failure, requiring the Corporation to remedy the
same, shall have been given to the Corporation by the Authority or the Trustee,
the Authority or the Trustee may take whatever action at law or in equity as may
appear necessary or desirable to enforce performance or observance of any
obligations or agreements of the Corporation under said Article or Sections. In
case the Corporation shall have failed to comply with its obligations under
Section 4.05, which event shall have continued for a period of 90 days after the
date on which written notice of such failure, requiring the Corporation to
remedy the same, shall have been given to the Corporation by the Trustee, the
Trustee may take whatever action at law or in equity as may appear necessary or
desirable to the Trustee to enforce performance or observance of any obligations
or agreements of the Corporation under said Section.
SECTION 6.03. JUDICIAL PROCEEDINGS BY TRUSTEE. Upon the
occurrence and continuance of an event of default (as defined in Section 6.01)
the Trustee may, and upon the written request of the owners of at least 25% in
aggregate principal amount of the Bonds then outstanding and receipt by the
Trustee of indemnity satisfactory to it shall, institute any actions or
proceedings at law or in equity for the collection of any amounts then due and
unpaid on the Corporation Note, and may prosecute any such action or proceeding
to judgment or final decree, and may collect in the manner provided by law the
money adjudged or decreed to be payable.
18
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. DISPOSITION OF AMOUNTS AFTER PAYMENT OF BONDS.
Any amounts determined by the Trustee to be remaining in the funds created under
the Indenture after payment in full, or provision for payment in full, of
principal of, and premium, if any, and interest on, all of the Bonds, in
accordance with the provisions of the Indenture, and payment of all the fees,
charges and expenses of the Authority and the Fiduciaries in accordance with the
Indenture and this Participation Agreement and any amounts required to be paid
to the United States of America pursuant to the Tax Regulatory Agreement, shall
belong to and be paid to the Corporation.
SECTION 7.02. NOTICES. All notices, certificates, requests or
other communications between the Authority, the Corporation and the Trustee
required or permitted to be given under this Participation Agreement or under
the Indenture (except as otherwise provided therein) shall be sufficiently given
and shall be deemed given when delivered or mailed by first class mail, postage
prepaid, addressed as follows: if to the Authority, at Corporate Plaza West, 000
Xxxxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: President; if to
the Corporation, at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx 00000-0000,
Attention: Treasurer; if to the Trustee, at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, X.X.
10036-1552, Attention: Corporate Trust and Agency Division; and if to the Bond
Insurer to the address set forth in Section 17.09 of the Indenture. A duplicate
copy of each notice, certificate, request or other communication given hereunder
to the Authority, the Bond Insurer, the Corporation or the Trustee shall also be
given to the others. The Corporation, the Bond Insurer, the Authority and the
Trustee may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates, requests or other
communications shall be sent.
SECTION 7.03. SUCCESSORS AND ASSIGNS. This Participation
Agreement shall inure to the benefit of and shall be binding upon the Authority,
the Corporation, the Fiduciaries, the Bond Insurer and their respective
successors and assigns. To the extent that this Participation Agreement confers
upon or gives or grants to the Bond Insurer any right, remedy or claim under or
by reason of this Participation Agreement, the Bond Insurer (if not in default
under the Policy) is hereby explicitly recognized as being a third-party
beneficiary hereunder and may enforce any such right remedy or claim conferred,
given or granted hereunder. Nothing in this Participation Agreement expressed or
implied is intended or shall be construed to confer upon, or to give or grant
to, any Person, other than the Authority, the Fiduciaries, the Bond Insurer, the
Corporation and the Bondholders, any right, remedy or claim under or by reason
of this Participation Agreement or any covenant, condition or stipulation
hereof, and all covenants, stipulations, promises and agreements in this
Participation Agreement contained by and on behalf of the Corporation shall be
for the sole and exclusive benefit of the Authority, the Fiduciaries, the Bond
Insurer, and the Bondholders.
SECTION 7.04. AMENDMENT OF PARTICIPATION AGREEMENT. This
Participation Agreement may not be amended except by an instrument in writing
signed by the parties hereto
19
and upon compliance with the applicable provisions of Sections 14.06, 14.07 and
14.08 of the Indenture. Subject to the provisions of Section 14.06 of the
Indenture, any provision of this Participation Agreement expressly recognizing
or granting rights in or to the Bond Insurer may not be amended in any manner
which affects the rights of the Bond Insurer hereunder without the prior written
consent of the Bond Insurer.
SECTION 7.05. ASSIGNMENT AND TRANSFER. The Authority shall
assign its rights under and interest in this Participation Agreement (except the
rights and interest of the Authority under Article III and Sections 4.04, 4.08,
4.09, 4.10 and 5.16, clause (a) of this Section 7.05, and insofar as the
obligations of the Corporation under Section 4.07 relate to taxes and
assessments imposed upon the Authority and not the Fiduciaries, Section 4.07
thereof), subject to the provisions of this Participation Agreement relating to
the amendment thereof, to the Trustee pursuant to the Indenture, as security for
payment of the principal of, and premium, if any, and interest on, the Bonds. In
addition, the Trustee shall have the same power as the Authority to enforce from
time to time the rights of the Authority set forth in Article III and Section
5.16, subject to the provisions of this Participation Agreement relating to the
amendment hereof. Except as provided in this Section 7.05, the Authority will
not sell, assign, transfer, convey or otherwise dispose of its interest in this
Participation Agreement during the term of this Participation Agreement.
The Corporation may convey, transfer, lease or otherwise
dispose of the Project provided that such conveyance, transfer, lease or other
disposition will not release the Corporation from its obligations under this
Participation Agreement except in accordance with the next paragraph.
The Corporation may convey, transfer, lease or otherwise
dispose of the Project and be released from its obligations under this
Participation Agreement, the Tax Regulatory Agreement and the Corporation Note,
in a transaction not constituting a Transfer as defined in Section 5.14(a),
subject to the following:
(a) The Authority shall have consented to the conveyance,
transfer, lease or other disposition upon receipt of (i) Opinion of
Bond Counsel to the effect that the conveyance, transfer, lease or
other disposition will not have an adverse effect on the exclusion of
interest on such Bonds from gross income for federal income tax
purposes and (ii) other legal opinions and documents satisfactory to it
under the circumstances.
(b) The Person that is a transferee of the Project shall
execute and deliver to the Trustee an instrument, in form satisfactory
to the Authority and the Trustee, whereby such Person shall effectually
assume the due and punctual payment of the principal of, and premium,
if any, and interest on, the Corporation Note according to its tenor
and the due and punctual performance and observance of all covenants
and agreements to be performed by the Corporation pursuant to this
Participation Agreement, the Tax Regulatory Agreement and the
Corporation Note.
20
(c) If a disposition is made as permitted by this Section, the
provisions of this Section and Section 5.14 shall continue in full
force and effect and no further disposition shall be made except in
compliance with the provisions of this Section or Section 5.14.
SECTION 7.06. PARTICIPATION AGREEMENT SUPERSEDES ANY PRIOR
AGREEMENTS. This Participation Agreement and the related documents identified
herein supersede any other prior agreements or understandings, written or oral,
between the parties with respect to the transactions contemplated hereby.
SECTION 7.07. COUNTERPARTS. This Participation Agreement may
be executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but such counterparts shall together constitute
but one and the same Participation Agreement.
SECTION 7.08. SEVERABILITY. If any clause, provision or
section of this Participation Agreement is held illegal, invalid or
unenforceable by any court or administrative body, such Participation Agreement
shall be construed and enforced as if such illegal or invalid or unenforceable
clause, provision or section had not been contained in this Participation
Agreement. In case any agreement or obligation contained in this Participation
Agreement shall be held to be in violation of law, then such agreement or
obligation shall be deemed to be the agreement or obligation of the Authority or
the Corporation, as the case may be, to the full extent permitted by law.
SECTION 7.09. NEW YORK LAW TO GOVERN. THE DOMESTIC LAW
OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION OF THIS
PARTICIPATION AGREEMENT.
21
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed as of the day and year first written
above.
NEW YORK STATE ENERGY
RESEARCH AND DEVELOPMENT
AUTHORITY
By: /s/ X. XXXXXXX XXXXXXXXX, XX.
--------------------------------------
President
(SEAL)
ATTEST:
/s/ XXXXXXX X. XXXXX
------------------------------
Secretary to the Board and
Vice President for
Governmental Relations
CENTRAL XXXXXX GAS & ELECTRIC
CORPORATION
By: /s/ XXXXXX X. XXXX
--------------------------------------
Chief Financial Officer,
Treasurer and Secretary
(SEAL)
ATTEST:
/s/ XXXXXXX X. XXXXXX
---------------------------
Assistant Secretary
22
EXHIBIT A
(To Participation Agreement dated as of
July 15, 1999, between New York
State Energy Research and Development
Authority and Central Xxxxxx Gas & Electric Corporation)
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
$33,400,000
PROMISSORY NOTE
FOR
POLLUTION CONTROL REFUNDING REVENUE BONDS
(CENTRAL XXXXXX GAS & ELECTRIC CORPORATION PROJECT),
1999 SERIES A
Central Xxxxxx Gas & Electric Corporation (the "Corporation"),
a New York corporation, for value received, hereby promises to pay, on or before
the dates set forth below, the amounts set forth below, to United States Trust
Corporation of New York, New York, New York, as trustee or its successor or
successors as trustee (the "Trustee") under the Trust Indenture dated as of July
15, 1999, between the New York State Energy Research and Development Authority
(the "Authority"), a body corporate and politic, constituting a public benefit
corporation, established and existing under and by virtue of the laws of the
State of New York, and the Trustee. Such Trust Indenture, as it may be amended
or supplemented from time to time, is herein called the "Indenture." Unless
otherwise defined herein, the terms used in this promissory note (the
"Corporation Note") which are defined in Section 1.01 of the Indenture shall
have the meanings, respectively, herein which such terms are given in said
Section 1.01 of the Indenture.
This Corporation Note is issued pursuant to the Participation
Agreement in order to evidence the obligation of the Corporation to the
Authority to repay the advance of the proceeds of the Bonds. In accordance with
the Participation Agreement, the Authority has authorized and directed the
Corporation to issue this Corporation Note payable to the order of the Trustee
as security for the payment of principal of, premium, if any, and interest on,
the Bonds. The rights and interest of the Authority under the Participation
Agreement (except the rights and interest of the Authority under Article III and
Sections 4.04, 4.08, 4.09, 4.10 and 5.16 thereof, clause (a) of Section 7.05,
and insofar as the obligations of the Corporation under Section 4.07 relate to
taxes and assessments imposed upon the Authority and not the Fiduciaries,
Section 4.07 thereof), subject to the provisions of the Participation Agreement
relating to the amendment thereof, have been assigned to the Trustee pursuant to
the Indenture. In addition, the Authority has granted the Trustee the same power
as the Authority to enforce from time to time the rights of the Authority set
forth in said Article III and Section 5.16, subject to the provisions of the
Participation
A-1
Agreement relating to the amendment thereof. All of the terms, conditions and
provisions of the Participation Agreement are, by this reference thereto,
incorporated herein as part of this Corporation Note.
This Corporation Note shall be payable as to principal,
premium, if any, and interest as follows:
(a) On or before each Interest Payment Date, a sum which
together with other money then available for such purpose in the Bond
Fund will enable the Trustee to pay the interest on the Bonds coming
due on such date;
(b) On or before any redemption date for the Bonds (other than
a redemption date pursuant to Section 5.05 of the Indenture), a sum
which together with other money then available for such purpose in the
Bond Fund will enable the Trustee to pay the principal of, premium, if
any, and interest on the Bonds which are to be redeemed on such date;
and
(c) On or before August 1, 2027, a sum which together with
other money then available for such purpose in the Bond Fund will
enable the Trustee to pay the outstanding principal amount of the
Bonds;
provided that, if the Bonds are redeemed pursuant to Section 5.05 of the
Indenture, the amounts that would otherwise have been payable on this
Corporation Note if not for such redemption, shall continue to be payable at the
times and in the amounts set forth above as if such redemption had not occurred;
and provided further that if the Bonds are redeemed pursuant to Section 5.05 of
the Indenture the Corporation shall have the right at any time thereafter to
prepay this Corporation Note by paying the amount due on this Corporation Note
at the time of such prepayment together with unpaid interest accrued thereon to
the date of such prepayment.
The obligation of the Corporation to make any payment of
principal of, and premium, if any, and interest on, this Corporation Note shall
not be deemed satisfied and discharged to the extent of any corresponding
payment made by the Bond Insurer.
All payments of principal of, and premium, if any, and
interest on, this Corporation Note shall be made by wire transfer in immediately
available funds to the Trustee at its corporate trust office, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, ABA Routing Number: Chase NYC 000000000,
for further credit to the account of US Trust Account No. 920- 1-073195; Attn.:
NYSERDA/Central Xxxxxx 1999 Series A, Account No. 00000000 (in the case of
payments of interest) or Account No. 0000000 (in the case of payments of
principal), or to such different address or account as the Trustee may from time
to time designate, on or before each date on which such principal, premium, if
any, or interest is due in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts.
A-2
The Corporation has agreed in the Participation Agreement that
if for any reason Corporation Note Payments, together with other moneys held by
the Trustee and then available for such purpose would not be sufficient to make
the corresponding payments of principal of, and premium, if any, and interest
on, the Bonds when such payments are due, the Corporation will pay the amounts
required from time to time to make up any such deficiency.
In the event that payment has been made in respect of the
principal of and premium, if any, and interest on, all of the Bonds, or
provision therefor has been made in accordance with the Indenture, then this
Corporation Note shall be deemed paid in full and shall be cancelled and
returned to the Corporation; provided that this Corporation Note shall not be
deemed paid in full if the Bonds are redeemed pursuant to Section 5.05 of the
Indenture.
No reference herein to the Participation Agreement shall
impair the obligation of the Corporation to pay the principal of and premium, if
any, and interest on this Corporation Note at the time and place and in the
amounts herein prescribed, which obligation is absolute, irrevocable and
unconditional and is not subject to any defense (other than payment) or any
right of set-off, counterclaim or recoupment for any reason, including, without
limitation, any breach by the Authority of any obligation to the Corporation,
whether under the Participation Agreement or otherwise, or inaccuracy of any
representation by the Authority to the Corporation under the Participation
Agreement, or any indebtedness or liability at any time owing to the Corporation
by the Authority or any failure to complete the Project or the destruction by
fire or other casualty of the Project or any portion thereof, or the taking of
title thereto or the use thereof by the exercise of the power of eminent domain.
In case of an event of default (as defined in Section 6.01 of
the Participation Agreement), the principal of and interest to the date of
payment of this Corporation Note may be declared immediately due and payable as
provided in the Participation Agreement. In addition, if at any time the
principal of the Bonds shall have been declared to be due and payable by
acceleration pursuant to the terms of the Indenture, this Corporation Note shall
thereupon become and be immediately due and payable, subject to such declaration
with respect to the Bonds being annulled pursuant to the Indenture.
This Corporation Note may not be amended except by an
instrument in writing signed by the Corporation, by the Authority and by the
Trustee, on behalf of the owners of the Bonds, in the manner and subject to the
conditions provided in the Indenture.
This Corporation Note may not be transferred by the Trustee
except to effect an assignment to a successor Trustee under the Indenture or
pursuant to Section 5.05 of the Indenture.
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THIS CORPORATION NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF NEW YORK.
Presentment, demand, protest and notice of dishonor are hereby
expressly waived.
A-4
IN WITNESS WHEREOF, the Corporation has caused this
Corporation Note to be duly executed and delivered as of August 3, 1999.
CENTRAL XXXXXX GAS &
ELECTRIC CORPORATION
By:
------------------------------------
(SEAL) Chief Financial Officer,
Treasurer and Secretary
ATTEST:
--------------------------------
Assistant Secretary
A-5
EXHIBIT B
(To Participation Agreement dated as of
July 15, 1999, between New York
State Energy Research and Development
Authority and Central Xxxxxx Gas & Electric Corporation)
B-1
