EXHIBIT 10(dd)
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Connecticut Development Authority
and
Bridgeport Hydraulic Company
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LOAN AGREEMENT
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Dated as of April 1, 1995
Connecticut Development Authority
$30,000,000 Water Facilities Revenue Bonds
(Bridgeport Hydraulic Company Project - 1995 Series)
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TABLE OF CONTENTS
Page
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions . . . . . . . . . . . . . . . . . 5
Section 1.2. Interpretation . . . . . . . . . . . . . . .13
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority . . . . . .15
Section 2.2. Representations by the Borrower . . . . . . .16
ARTICLE III THE LOAN
Section 3.1. Loan Clauses . . . . . . . . . . . . . . . .20
Section 3.2. Other Amounts Payable . . . . . . . . . . . .21
Section 3.3. Manner of Payment . . . . . . . . . . . . . .22
Section 3.4. Obligation Unconditional . . . . . . . . . .22
Section 3.5. Security Clauses . . . . . . . . . . . . . .22
Section 3.6. Issuance of Bonds . . . . . . . . . . . . . .22
Section 3.7. Use of Priority Amounts . . . . . . . . . . .23
Section 3.8. Effect of Drawing Under Letter
of Credit . . . . . . . . . . . . . . . . . .23
Section 3.9. Effective Date and Term . . . . . . . . . . .23
Section 3.10. Borrower's Purchase of Bonds . . . . . . . .23
Section 3.11. Letter of Credit . . . . . . . . . . . . . .24
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility . . . . . . . . .24
Section 3.13. Securities Laws . . . . . . . . . . . . . . .26
Section 3.14. New York Paying Agent . . . . . . . . . . . .26
Section 3.15. No Additional Bonds . . . . . . . . . . . . .26
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project . . . . . . . . . .27
Section 4.2. Payment of Additional Project
Costs by Borrower . . . . . . . . . . . . . .28
Section 4.3. No Warranty Regarding Condition,
Suitability or Cost of Project . . . . . . .29
Section 4.4. Taxes . . . . . . . . . . . . . . . . . . . .29
Section 4.5. Insurance . . . . . . . . . . . . . . . . . .29
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Section 4.6. Compliance with Law . . . . . . . . . . . . .31
Section 4.7. Maintenance and Repair . . . . . . . . . . .31
Section 4.8. Disposition of Project Realty
by Borrower . . . . . . . . . . . . . . . . .31
Section 4.9. Leasing of Project Realty and
Project Equipment . . . . . . . . . . . . . .32
Section 4.10. Project Equipment . . . . . . . . . . . . . .32
ARTICLE V CONDEMNATION, DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder . . . . .33
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction . . . . . . . . . . . .33
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation . . . . . . . . . .33
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted . . . . . . . . .35
Section 6.2. Indemnification, Payment of Expenses,
and Advances . . . . . . . . . . . . . . . .35
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability . . . . .38
Section 6.4. Further Assurances and Corrective
Instruments . . . . . . . . . . . . . . . . .40
Section 6.5. Covenant by Borrower as to Compliance
with Indenture . . . . . . . . . . . . . . .40
Section 6.6. Assignment of Agreement or Note . . . . . . .40
Section 6.7. Inspection . . . . . . . . . . . . . . . . .40
Section 6.8. Default Notification . . . . . . . . . . . .41
Section 6.9. Covenant Against Discrimination . . . . . . .41
Section 6.10. Authority Costs and Expenses . . . . . . . .41
Section 6.11. Covenant to Provide
Continuing Disclosure . . . . . . . . . . . .41
Section 6.12. Covenant Against Issuing Additional Debt
Secured By The Mortgage . . . . . . . . . . .42
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default . . . . . . . . . . . . . .43
Section 7.2. Remedies on Default . . . . . . . . . . . . .44
Section 7.3. No Duty to Mitigate Damages . . . . . . . . .45
Section 7.4. Remedies Cumulative . . . . . . . . . . . . .45
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ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment . . . . . . . . . . . . .46
Section 8.2. Notice by the Borrower of Optional
Prepayment . . . . . . . . . . . . . . . . .48
Section 8.3. Mandatory Prepayment on Taxability . . . . .48
ARTICLE IX GENERAL
Section 9.1. Indenture . . . . . . . . . . . . . . . . . .49
Section 9.2. Benefit of and Enforcement by
Bondholders . . . . . . . . . . . . . . . . .49
Section 9.3. Force Majeure . . . . . . . . . . . . . . . .49
Section 9.4. Amendments . . . . . . . . . . . . . . . . .50
Section 9.5. Notices . . . . . . . . . . . . . . . . . . .50
Section 9.6. Prior Agreements Superseded . . . . . . . . .50
Section 9.7. Execution of Counterparts . . . . . . . . . .51
Section 9.8. Time . . . . . . . . . . . . . . . . . . . .51
Section 9.9 Separability of Provisions . . . . . . . . .51
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project Realty
Appendix C - Description of Project Equipment
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Connecticut Development Authority
Bridgeport Hydraulic Company
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of April 1, 1995 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 Bridgeport Hydraulic
Company, a corporation organized and existing under the laws of the
State of Connecticut,
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."
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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 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, by various resolutions, as amended by subsequent
resolutions, in furtherance of the purposes of the Act, the Authority
has accepted the application of Bridgeport Hydraulic Company for
assistance in the financing of various capital projects in the State
of Connecticut; and
WHEREAS, the Borrower currently owns certain existing facilities
within certain municipalities in the State 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 acquisition,
construction and installation of
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a water treatment facility in Fairfield, Connecticut and the
acquisition, construction and installation of two water treatment
facilities in Litchfield County, Connecticut (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted
April 19, 1995, authorized the issuance of $30,000,000 principal
amount of its Water Facilities Revenue Bonds (Bridgeport Hydraulic
Company Project - 1995 Series) for the purposes of providing funds for
the Project; 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 Shawmut Bank Connecticut,
National Association, as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower
concurrently with the execution hereof has arranged the delivery to
the Paying Agent of an irrevocable direct pay Letter of Credit, dated
the date of delivery of the Bonds, issued by Societe Generale, acting
by and through its New York Branch (the "Bank"), for the account of
the Borrower in favor of the Paying Agent as beneficiary on behalf of
the owners of the Bonds while the Bonds are in the Flexible, Daily or
Weekly Mode; and
WHEREAS, the Borrower and the Bank entered into a Reimbursement
Agreement, dated as of April 1, 1995, obligating the Borrower inter
alia to repay all amounts drawn under the Letter of Credit together
with interest, if any, thereon; 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 the acquisition,
construction and installation of the Project; 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
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WHEREAS, the Connecticut Department of Public Utility Control has
approved the issuance of the Note;
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):
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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:
"Act" means the State Commerce Act, constituting Connecticut
General Statutes, Sections 32-la through 32-23xx, as amended.
"Additional Bonds" means one or more series of additional Bonds,
other than the Bonds, authorized and issued by the Authority pursuant
to 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, any Executive Vice
President, Deputy Director or any Senior Vice President or any Vice
President thereof and, in the case of the Borrower, the Chairman, Vice
Chairman, President, any Vice President, Chief Financial Officer,
Treasurer, Assistant Treasurer, Secretary or Assistant Secretary
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.
"Bank" means Societe Generale, acting by and through its New York
Branch, in its capacity as issuer of the Letter of Credit or any other
issuer of and obligor under a Credit Facility.
"Beneficial Owner" shall have the meaning specified in Section
2.3(F) of the Indenture. If any person claims to the
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Trustee to be a Beneficial Owner, for purposes of Section 2.4(C)
of the Indenture, such person shall prove such claim to the satisfaction
of the Trustee with such documentation and signature guaranties as the
Trustee may request.
"Bonds" means the $30,000,000 Water Facilities Revenue Bonds
(Bridgeport Hydraulic Company Project - 1995 Series) authorized and
issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Xxxxxxx Breed Xxxxxx & Xxxxxx or such other
nationally recognized bond counsel selected by the Authority and
reasonably satisfactory to the Borrower and the Trustee.
"Borrower" means (i) Bridgeport Hydraulic Company, a corporation
organized and existing under the laws of the State of Connecticut, 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 banks located in Hartford,
Connecticut and New York, New York are not required or authorized to
remain closed, (iii) 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 the
Bank are located and are not required or authorized to remain closed
and (iv) 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.
"Completion Date" means the date of completion of the project as
specified and established in accordance with Article IV hereof.
"Conversion Date" means the date on which a new Mode becomes
effective with respect to a Bond, and with respect to a Bond in the
Multiannual Mode, the date on which a new Rate Period becomes
effective.
"Credit Facility" means the Letter of Credit and any substitute
irrevocable transferable direct pay letter of credit, municipal bond
insurance policy, other credit facility or any combination thereof,
which provides by its terms payment of the principal and Purchase
Price of, and interest on the Bonds when payable in accordance
herewith and with the Indenture delivered to the Paying Agent pursuant
to the Indenture and this Agreement and then in effect. More than one
Credit Facility may be in effect from time to time.
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"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
of any of the Bonds from the Internal Revenue Service of a notice of
assessment and demand for payment and (provided the Borrower has been
afforded the opportunity to participate at its own expense in all
appeals and proceedings to which such owner of the Bonds is a party
relating to such assessment and demand for payment) the expiration of
the appeal period provided therein if no appeal is taken or, if an
appeal is taken by such owner as provided in Section 6.3 of this
Agreement 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 any Bonds
is includable in the gross income for federal income tax purposes
(other than for purposes of any alternative minimum tax, environmental
tax or foreign branch profits 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 Code.
For purposes of this definition, the term owner means the Beneficial
Owner of the Bonds so long as the Book-Entry System is in effect.
"DPUC" means the State Department of Public Utilities Control.
"Disclosure Agreement" means the agreement by, between and among
the Borrower, Xxxxx Xxxxxx Inc. and Advest, Inc., dated the date of
the initial delivery of the Bonds, providing for the provision of
certain information subsequent to the issuance of the Bonds.
"Event of Default" means an Event of Default as defined in
subsection 7.1 hereof.
"Financing Documents" (1) when used with respect to the Borrower,
means all documents and agreements executed and delivered by the
Borrower as security for or in connection
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with the issuance of the Bonds, including this Agreement, the Tax Regulatory
Agreement, the Note, the Disclosure Agreement, the General Certificate of
the Borrower and all other documents and agreements executed and delivered
by the Borrower in connection with any of the foregoing, but shall not
include the Mortgage and (2) when used with respect to the Authority,
means any of the foregoing documents and agreements to which the
Authority is a direct party. The Financing Documents do not include
any documents or agreements to which the Borrower is not a direct
party, including the Bonds or the Indenture.
"Hemlocks Project" means the acquisition, installation and
construction of a water treatment facility at the Hemlocks Reservoir,
to be located at 4975 Black Rock Turnpike, in the Town of Fairfield,
Connecticut.
"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 forms of the Bonds.
"Letter of Credit" means the $30,443,836 irrevocable, direct pay
letter of credit dated the date of the initial delivery of the Bonds
and issued by Societe Generale, acting by and through its New York
Branch, for the benefit of the Paying Agent.
"Litchfield Projects" means the acquisition, installation and
construction of two water treatment facilities in Litchfield County,
one to be located at Lakeville Reservoirs, 82 Reservoir Road, in the
Town of Salisbury, Connecticut and the other to be located at Lake
Wangum Reservoir, Canaan Mountain Road, in the Town of Canaan,
Connecticut.
"Mortgage" means the Mortgage Trust Indenture dated as of June 1,
1924 as has heretofore been and may be supplemented from time to time
between the Bridgeport Hydraulic Company and The Bridgeport Trust
Company, as trustee therefor.
"Mortgage Trustee" means The Chase Manhattan Bank of Connecticut,
N.A., as successor trustee to The Bridgeport Trust Company.
"Moody's" 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
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corporation shall be dissolved or liquidated or shall no longer perform
the functions of a securities rating agency, "Moody's" 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 by the Trustee in the collection thereof.
"Note" means the promissory note of the Borrower to the
Authority, dated the date of initial delivery of the Bonds in the form
attached as an Appendix 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 subsection
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
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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 Paying Agent on the Purchase Date, provided sufficient funds
for payment of the Purchase Price are on deposit with the Paying
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
subsection 12.1 of the Indenture.
"Paying Agent" means any paying agent 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) the
lien of the Mortgage, (ii) liens and encumbrances permitted by the
Mortgage, (iii) liens for taxes not yet due and payable, (iv) any lien
created by this Agreement and the Indenture, (v) 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, (vi) 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 (vii) 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.
"Principal User" means any principal user of the Project within
the meaning of Section 144(a)(2)(B) of the Code, 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
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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.
"Project" means the Borrower's interest in the Project Realty and
other interests in the real property, and in all Project Equipment
wherever located and whether now owned or hereafter acquired or
financed in whole or in part with the proceeds of the Bonds and any
additions and accessions thereto, substitutions therefor and
replacements, improvements, extensions and restorations thereof,
described in the appendices hereto, including the Hemlocks Project and
the Litchfield Projects, as amended from time to time in accordance
with this Agreement.
"Project Costs" mean all costs and expenses of the Project for
which the Trustee is permitted to make payment as provided in
subsection 5.2(B) of the Indenture.
"Project Equipment" means all personal property, goods, leasehold
improvements, machinery, equipment, furnishings, furniture, fixtures,
tools and attachments wherever located and whether now owned or
hereafter acquired, acquired in whole or in part with the proceeds of
the Bonds, and any additions and accessions thereto, substitutions
therefor and replacements thereof, including, without limitation the
Project Equipment described in Appendix C hereto, as amended from time
to time in accordance herewith.
"Project Realty" means the realty and other interests in the real
property upon which the Project is built, or necessary for access to
or operation of the Project, together with all replacements,
improvements, extensions, substitutions, restorations and additions
thereto which are made pursuant hereto, including without limitation,
the Project Realty described in Appendix B, as amended from time to
time in accordance herewith.
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"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.
"Reimbursement Agreement" means the Letter of Credit and
Reimbursement Agreement, dated as of April 1, 1995, as may be amended
or supplemented from time to time, between the Borrower and the Bank,
as issuing bank thereunder, and any other agreement between the
Borrower and a Bank under which the Borrower is obligated to reimburse
the Bank for payments made by the Bank under a Credit Facility.
"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, 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)).
"S&P" means Standard & Poor's Ratings Group, a corporation
organized and existing under the laws of the State of New York, 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
Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project
within the meaning of Section 147(a) of the Code.
"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.
- 13 -
"Term", when used with reference to this Agreement, means the
term of this Agreement determined as provided in Article III hereof.
"Trustee" means Shawmut Bank Connecticut, National Association,
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
- 14 -
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.
(10) From and after the date upon which there is no Credit
Facility in effect, upon receipt by the Trustee of a certificate
from the Bank stating that all amounts payable to the Bank under
the Reimbursement Agreement have been paid in full, all
references to the Bank, the Reimbursement Agreement or the Credit
Facility in this Agreement, the Note, the Indenture, and the
Bonds shall be ineffective.
- 15 -
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
- 16 -
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. 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
State of Connecticut, is not in violation of any provision of its
certificate of incorporation 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.
- 17 -
(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 may
materially and adversely affect the ability of the Borrower to
perform its obligations under the Financing Documents 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 certificate of
incorporation 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.
- 18 -
(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 is equal to or in
excess of $30,000,000. 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 Refunding 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) 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 has obtained, or will obtain, all
necessary material approvals from any and all governmental
agencies requisite to the Project, and has also obtained all
material occupancy permits and authorizations from appropriate
authorities authorizing the occupancy and use of the Project for
the purposes contemplated hereby. The Borrower further
represents and warrants that it will complete the Project in
accordance with all material federal, State and local laws,
ordinances and regulations applicable thereto.
(11) 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.
- 19 -
(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 has good and marketable title to the
Project subject only to Permitted Encumbrances and to
irregularities or defects in title which may exist which do not
materially impair the use of such properties in the Borrower's
business.
(15) As of the date of execution hereof, except for the
Mortgage, neither the Borrower, nor to its knowledge anyone
acting on behalf of the Borrower, has entered into negotiations
with any person for the purpose of undertaking any borrowing
concurrently with or subsequent to the issuance of the Bonds and
to be secured wholly or partially by a lien or encumbrance on the
Project or any part thereof, and the Borrower has no present
intention of undertaking any such borrowing.
(16) The Borrower will use all of the proceeds of the Bonds
to finance the Project Costs.
- 20 -
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 $30,000,000 and the Borrower agrees to borrow such amount
from the Authority.
(B) The 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 12:00 Noon on the date on which such payment of principal
(including principal of Bonds called for redemption) and Purchase
Price 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, (i) then held in the Debt Service Fund and available
to pay the same, and (ii) amounts received by the Paying Agent to pay
the same from a draw under a Credit Facility. 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.
- 21 -
(E) 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 but the installment payments
required under this section shall not otherwise bear interest.
Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section
3.1 are subject in all respects to the provisions of Sections 3.7 and
3.8 hereof regarding the use of Priority Amounts and the effect of
drawings under the Credit Facility.
(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 Bank and the Remarketing Agent for the performance of
their 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, (iv) 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 (v) fees and expenses of Bond Counsel and the
Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by
it under the Financing Documents at the time and in the manner therein
provided.
(C) The Borrower agrees to pay all Rebate Amounts (and
penalties, if any) due to the United States of America pursuant to
Section 148 (f) of the Code.
- 22 -
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
Agents, 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 Section 6.2 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
April 19, 1995, authorizing their issuance under and pursuant to the
Indenture. The proceeds of sale of the Bonds shall be applied as
provided in Articles IV and V of the Indenture.
- 23 -
Section 3.7. Use of Priority Amounts. The Borrower and the
-----------------------
Authority acknowledge their intention to minimize the risk that any
payment made to a Bondowner from amounts provided by or on behalf of
the Borrower may be determined by a bankruptcy court to constitute a
preference. To this end the parties agree that payments to Bondowners
on Bonds supported by a Credit Facility shall be made only from
Priority Amounts, except when and to the extent no Priority Amounts
are available for the purpose as provided in Section 5.9(E) of the
Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The
----------------------------------------
payment of obligations of the Borrower under this Agreement and the
Note with respect to the Bonds shall be completely satisfied to the
extent of all drawings made under the Credit Facility for the purpose
of satisfying such obligations.
Section 3.9. 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 in
accordance with the provisions of such Sections.
(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 3.10. Borrower's Purchase of Bonds. Pursuant to Section
----------------------------
5.9(F) of the Indenture, if the amount drawn on the Credit Facility
and deposited with the Paying Agent, together with all other amounts
(including remarketing proceeds) received by the Paying Agent for the
purchase of Bonds supported by a Credit Facility and tendered pursuant
to Sections 2.3(G)(1)(b), 2.3(G)(1)(c), 2.3(G)(2)(b), (c) or (d), or
2.3(G)(3)(b), (c) or (d), of the Indenture, is not sufficient to pay
the Purchase Price of such Bonds on the Purchase Date, the Paying
Agent shall before 3:30 P.M. on such Purchase Date, notify the
Borrower, the Remarketing Agent and the Trustee of such deficiency by
telephone promptly confirmed in writing. The Borrower shall pay to
the Paying Agent in immediately available funds by 4:00 P.M. on the
Purchase Date an amount equal to the Purchase Price of such Bonds less
the amount, if any, available to pay the Purchase Price in accordance
with Section 9.18 of the Indenture from the proceeds
- 24 -
of the remarketing of such Bonds or from drawings on the Credit Facility,
as reported by the Paying Agent. Bonds purchased entirely with moneys
furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged,
----------------
concurrently with the original issuance and authentication of the
Bonds, for the delivery to the Paying Agent of the Letter of Credit,
having a term expiring three years from the date of issuance, and
providing for the Paying Agent to be entitled to draw on or prior to
the Termination Date (as defined therein), an amount that is not less
than the sum of the aggregate principal amount (or that portion of the
purchase price corresponding to principal) of the Outstanding Bonds
and up to forty-five (45) days of interest accrued on such Bonds (or
that portion of the purchase price corresponding to interest) if such
Bonds were issued at the Maximum Interest Rate.
Section 3.12. Requirements for Delivery of a Substitute Credit
------------------------------------------------
Facility. (A) The Borrower may, upon satisfaction of the requirements
--------
set forth in this Section, at its option (except during the period
between the giving of notice of mandatory tender for purchase on
account of the expiration of the Credit Facility and the Purchase
Date), provide for the delivery to the Paying Agent of a substitute
Credit Facility; provided, however, that (1) the Credit Facility being
-------- -------
replaced shall in no event be terminated or released until the
Borrower has given not less than forty-five (45) days' written notice
to the Authority, the Trustee, the Paying Agent and the Remarketing
Agent, and further the Paying Agent has received the proceeds of all
outstanding drawings on the Credit Facility being replaced, (2) if any
Bonds supported by the Credit Facility being replaced are in the Daily
Mode or the Weekly Mode, the Paying Agent has given not less than (30)
days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Daily Mode or the Weekly Mode
and (3) if any of the Bonds supported by the Credit Facility being
replaced are in the Flexible Mode, such Credit Facility shall in no
event be terminated or released earlier than on the second Business
Day after an Effective Date for all such Bonds or such earlier day on
or after such Effective Date on which the full Purchase Price for such
Bonds is received by the Paying Agent. Any notice given pursuant to
clause (1) or (2) above shall specify the expiration date of the
Credit Facility being replaced and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit
Facility being replaced will terminate on the date stated in such
notice.
(B) Each substitute Credit Facility must:
(i) be an irrevocable, unconditional obligation of a
financial institution;
- 25 -
(ii) be on terms no less favorable to the Paying Agent
than the Letter of Credit and entitle the Paying
Agent to draw upon or demand payment and receive
in immediately available funds an amount equal to
the sum of the principal amount of the Bonds
supported by the Credit Facility, any premium
applicable thereto, and forty-five (45) days'
accrued interest at the Maximum Interest Rate on
the principal amount of Bonds then Outstanding in
the Daily Mode, the Weekly Mode or the Flexible
Mode; and
(iii) provide for a term which may not expire in less
than 360 days and which may not expire or be
terminated prior to the fifth Business Day after
the mandatory tender for purchase as provided in
Section 2.3(G)(1)(c), 2.3(G)(2)(d) or 2.3(G)(3)(d)
of the Indenture. The Borrower shall not enter
into any Reimbursement Agreement or agree to any
amendment of a Reimbursement Agreement which in
any way limits the obligation of the Bank to
provide funds under the Credit Facility without
the prior written consent of 100% of the principal
amount of the Bonds Outstanding and entitled to
the benefit thereof.
(C) No substitute Credit Facility may be delivered to the
Trustee for any purpose under this Agreement or the Indenture unless
accompanied by the following documents: (i) an opinion of counsel for
the issuer of the substitute Credit Facility to the effect that it
constitutes a legal, valid and binding obligation of the issuer
enforceable in accordance with its terms; (ii) an opinion of Bond
Counsel to the effect that the issuance of a substitute Credit
Facility will not adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes and that such
Credit Facility is permitted under the Indenture; (iii) an opinion of
counsel to the Borrower satisfactory to the Trustee, stating that the
delivery of such substitute Credit Facility is authorized under this
Agreement and complies with the terms hereof; (iv) a certificate of
the Bank that all amounts due under the Reimbursement Agreement
relating to the outstanding Credit Facility have been paid and that
the Borrower has fulfilled all its obligations arising out of such
agreement; (v) an executed
- 26 -
copy of the Reimbursement Agreement entered
into with respect to the substitute Credit Facility; (vi) copies of
any other documents, agreements or arrangements entered into directly
or indirectly between the Borrower and the entity issuing the
substitute Credit Facility with respect to the transactions
contemplated by the substitute Credit Facility and related
Reimbursement Agreement; and (vii) such other documents and opinions
as the Trustee or the Authority may reasonably request. Notice of the
substitution, replacement, termination or extension of a Credit
Facility shall be sent by the Paying Agent to Xxxxx'x and S&P and
shall include the new expiration date of the Credit Facility and the
name of the entity providing the substitute Credit Facility.
The substitute Credit Facility, related Reimbursement
Agreement and other documents, agreements and arrangements entered
into and delivered with respect to the delivery of a substitute Credit
Facility shall not include any provisions less favorable to the owners
of the Bonds than the provisions of the Credit Facility and related
Reimbursement Agreement, documents, agreements and arrangements,
including provisions regarding the acceleration of the Bonds, any
right of setoff of assets of the account party by the entity issuing
the substitute Credit Facility, and any direct or indirect pledge of
collateral which is not pledged on a priority or parity basis to the
owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds
---------------
under this Agreement, the Borrower shall at all times comply with
applicable federal and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that
---------------------
if at any time it becomes necessary or desirable to have a Paying
Agent capable of performing in New York, New York, it shall remove
Shawmut Bank Connecticut, National Association as Paying Agent and a
successor shall be appointed pursuant to Section 9.11 of the
Indenture.
Section 3.15. No Additional Bonds. No Additional Bonds on a
-------------------
parity with the Bonds may be issued under the Indenture.
- 27 -
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower agrees
-------------------------
that it will undertake and complete or cause to be undertaken and
completed the Project for the purposes and in the manner intended
hereby and by the Borrower's application for assistance to the
Authority and in accordance with the plans and specifications therefor
which have been prepared by or on behalf of the Borrower and placed on
file in the principal office of the Borrower and with the Trustee, and
that it will cause such improvements to be made to the Project as are
necessary for the operation thereof in the manner herein provided.
(B) The Borrower may modify, alter and amend the plans and
specifications for the Project from time to time and at any time,
provided that such modifications, alterations and amendments do not
materially impair the operation of the Project as a water treatment
facility under the Act and provided that no material modifications,
alterations or amendments shall be made unless the Borrower shall have
theretofore delivered to the Trustee an opinion of counsel acceptable
to the Trustee to the effect that such amendment, modification or
alteration and the expenditure of amounts from the Project Fund in
connection therewith will not cause interest on the Bonds to be
subject to federal income taxation, together with any written
representations or certifications of fact made by or on behalf of the
Borrower upon which such counsel has relied in rendering such opinion.
(C) 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 Project shall be paid by the Borrower in the manner and
to the extent provided in the Indenture.
(D) The Borrower hereby agrees that in order to effectuate
the purposes of the Financing Documents, it will make, execute,
acknowledge and deliver any contracts, orders, receipts, writings and
instructions with any other persons, firms, or corporations and in
general do all things which may be requisite or proper, all for the
purpose of carrying out
- 28 -
and completing the Project. The Borrower will
use its best efforts to complete the Project with all reasonable
dispatch. If for any reason the completion of such work does not
occur within this period, there shall be no liability on the part of
the Authority and no diminution in or postponement of the payments
required in Section 3.1 hereof to be paid by the Borrower.
(E) The Borrower has obtained or shall obtain all necessary
approvals from any and all governmental agencies requisite to the
undertaking and completion of the Project and in compliance with all
federal, State and local laws, ordinances and regulations applicable
thereto. Upon completion of the Project, the Borrower shall obtain
all required permits and authorizations from appropriate authorities,
if any be required, authorizing the operation and uses of the Project
for the purposes contemplated hereby, where failure to obtain such
approvals, permits and authorizations would have a material adverse
effect on the transactions contemplated hereby.
(F) The Borrower covenants that it will take such action
and institute such proceedings as shall be necessary to cause and
require all contractors and material suppliers to complete their
contracts diligently in accordance with the terms of the contracts,
including, without limitation, the correcting of any defective work.
(G) Upon the occurrence of a default by any contractor or
subcontractor or supplier under any contract made by it in connection
with the Project, the Borrower will promptly proceed, to the extent it
deems appropriate in the circumstances, either separately or in
conjunction with others, to exhaust the remedies of the Borrower
against each surety for the performance of such contract.
(H) The Borrower will have good and marketable title in fee
simple to the Project Realty, subject only to Permitted Encumbrances,
sufficient for the purposes of this Agreement.
Section 4.2 Payment of Additional Project Costs by Borrower.
-----------------------------------------------
In the event that moneys in the Project Fund are not sufficient to pay
Project Costs in full, the Borrower shall nonetheless complete the
Project and shall pay that portion of the Project Costs as may be in
excess of the moneys available therefor in the Project Fund and shall
not be entitled to any reimbursement therefor from the Authority or
from the Trustee or from the holders of any of the Bonds, nor shall it
be entitled to any diminution of the amounts payable under the
Financing Documents.
- 29 -
Section 4.3. 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 complete the
Project.
Section 4.4. 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, provided either (i) prior written notice thereof has
been given to the Trustee and reserves to the extent required by the
Reimbursement Agreement are maintained during the period of such
contest and any appeal therefrom, or (2) such contest is conducted in
full compliance with Connecticut General Statutes Section 12-53a(d)
unless, in either case, by nonpayment of such taxes, assessments or
other charges or payments, the Project or any part thereof will be
subject to loss or forfeiture, and as a result thereof a lien or
charge will be placed upon any payment pursuant to this Agreement or
the value or operation of the Project will be materially impaired, in
which event such taxes, assessments or other charges or payments shall
be paid forthwith. 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 4.5. Insurance. (A) The Borrower shall insure the
---------
Project against loss or damage by fire, flood, lightning,
- 30 -
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 the Mortgage while the Mortgage is in effect
and thereafter as is customary with companies in the same or similar
business, and shall pay when due the premiums thereon. In the event
of loss or damage to the Project Realty or Project Equipment the Net
Proceeds of any insurance provided under this subsection shall be
deposited with the Mortgage Trustee as required by the Mortgage while
the Mortgage is in effect and thereafter shall be applied to the
manner set forth in Article V hereof. Any excess proceeds of
insurance remaining after application as required by this Section
shall be paid to the Borrower, but only if the Borrower is not in
default under this Agreement. At least ten days prior to the
expiration of any policy required under this Section the Borrower
shall furnish evidence satisfactory to the Authority and the Trustee
that such policy has been renewed or replaced.
(B) The Borrower further agrees that it will at all times
carry public liability insurance with respect to the Project to the
extent required by the Mortgage while the Mortgage is in effect, and,
thereafter, in a minimum amount of $5,000,000 with provisions for a
deductible amount not in excess of five percent of the amount of
coverage thereunder.
(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 if
(1) self-insurance is the Borrower's customary method of insurance
against such risks in similar circumstances, and (2) the Borrower
maintains self-insurance reserves adequate and available to meet such
risks, subject to the terms of the Mortgage while the Mortgage is in
effect. Amounts available under any such self-insurance arrangement
upon the occurrence of an insured event shall be applied in the same
manner as the Net Proceeds of any insurance maintained pursuant to
such subsections would have been applied.
(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.
- 31 -
Section 4.6. 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 4.7. 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 4.7 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.
Section 4.8. Disposition of Project by Borrower. (A) The
----------------------------------
Borrower shall not sell, assign, encumber (other than Permitted
Encumbrances), convey or otherwise dispose of its interest in the
Project or any part thereof during the Term without the prior written
consent of the Authority, except as permitted hereby or by the
Mortgage while the Mortgage is in effect.
(B) The Borrower may, however, grant such rights of way or
easements over, across, or under, the Project Realty as shall be
necessary or convenient for the operation or use of the Project
Realty, including but not limited to easements or rights-of-way for
utility, roadway, railroad or similar purposes in connection with the
Project Realty, or for the use of the real property adjacent to or
near the Project and owned by or leased to the Borrower, but only if
such rights-of-way or easements shall not materially or adversely
affect the value and operation of the Project.
(C) In the event the Authority consents to any disposition
of the Borrower's interest in the Project, the proceeds of the
disposition shall be deposited with the Mortgage Trustee while the
Mortgage is in effect and thereafter in the Redemption Account of the
Debt Service Fund for the redemption of the Bonds used to finance the
portion of the Project then being disposed of under the Indenture. No
conveyance or release effected under the provisions of this
- 32 -
Section shall entitle the Borrower to any abatement or diminution of the
amounts payable hereunder or under the Note, or relieve the Borrower
of the obligation to perform all of its covenants and agreements under
the Financing Documents.
Section 4.9. Leasing of the Project Realty and the Project
---------------------------------------------
Equipment. The Borrower may not lease the Project Realty or the
---------
Project Equipment to any person during the Term of this Agreement
without the prior written consent of the Authority, except as may be
permitted by the Mortgage while the Mortgage is in effect. No lease
shall relieve the Borrower from primary liability for any of its
obligations hereunder, and in the event of any such lease the Borrower
shall continue to remain primarily liable for payment of the
applicable amounts specified in Article III hereof and for performance
and observance of the other agreements on its part herein provided to
be performed and observed by it to the same extent as though no lease
had been made.
Section 4.10. Project Equipment. (A) The Borrower shall have
-----------------
the right to install, operate, use, remove and dispose of the Project
Equipment in the normal and ordinary course of its business
operations, and shall not be required to replace any item of Project
Equipment which is discarded or sold for scrap. The Borrower shall
not, however, either in one transaction or a series of transactions
sell, convey, transfer, remove or otherwise dispose of more than 20%
by value of the Project Equipment without prior notice to and the
consent of the Authority, unless such Project Equipment is replaced by
property of similar value and utility, provided that such dispositions
may be made as permitted by the Mortgage while the Mortgage is in
effect.
(B) The Borrower shall maintain with the Trustee
separate and reasonably detailed descriptions of each item of property
constituting the Project Equipment. Without limiting the foregoing,
the Project Equipment list appended hereto at the date of execution
and delivery of this Agreement shall be modified to the extent
required by this Section in connection with any disbursement for
Project Equipment from the Project Fund and any replacement of
material items of Project Equipment under this Section or under
Section 5.2 hereof.
- 33 -
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) At its own cost, repair, restore or reconstruct the
Project to substantially its condition immediately prior to such
event or to a condition of at least equivalent value, regardless
of whether or not the proceeds of any and all policies of
insurance covering such damage or destruction, or the amount of
the award or compensation or damages recovered on account of such
taking or condemnation, shall be available or sufficient to pay
the cost thereof; comply with the applicable provisions of the
Mortgage 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) At its own cost, replace or relocate the Project at its
site in such fashion as to render the replacement or relocated
structures, improvements and items, machinery, equipment or other
property of equivalent value to the Project immediately prior to
such event; or
(3) 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 deposited with the Mortgage
Trustee while the Mortgage is in effect and thereafter shall be
deposited either (1) in the
- 34 -
Renewal Fund and applied to pay for the cost of making such repairs,
restorations, reconstructions, replacements or relocations, or to
reimburse the Borrower, the Authority or the Trustee for payment therefor
from time to time as provided in the Indenture or (2) if prepayment of the
loan is then permitted and the Borrower exercises its option to prepay the
loan, in the Debt Service Fund and applied to the payment of the Note and
redemption of the Bonds.
(B) Notwithstanding the provisions of subsection (A) of
this Section, any insurance or condemnation proceeds attributable to
improvements, machinery, equipment and other property installed in or
about the Project Realty and the Project Equipment, but which do not
constitute a portion of the Project Realty and the Project Equipment,
shall be paid directly to the Borrower. The Trustee and the Authority
agree to execute such documents as may be reasonably necessary to
accomplish the purposes of this subsection.
(C) The Borrower, the Authority and the Trustee shall
cooperate and consult with each other in all matters pertaining to the
settlement or adjustment of any and all claims and demands for damages
on account of any taking or condemnation of the Project Realty or the
Project Equipment or pertaining to the settlement, compromising or
arbitration of any claim on account of any damage or destruction
thereof.
- 35 -
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, except
as permitted by the Mortgage while the Mortgage is in effect.
(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 Authority, the State, agencies of the State and their
members, servants, agents, directors, officers and employees (the
"Authority Indemnified Parties"), and the Paying Agent, the Trustee
and their officers, directors and employees (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 wilful and material misrepresentation, wilful
misconduct or gross negligence on the part of the Authority
Indemnified Parties or the Indemnified Parties and except for
- 36 -
any bad faith on the part of any Indemnified Party other than an Authority
Indemnified Party.
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 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 and the Trustee 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 or the Trustee 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 or the Authority in good
faith with respect to the Financing Documents, the Indenture, the
Bonds and the Project Realty and the Project Equipment, and the
Authority or the Trustee 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.
- 37 -
(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.
- 38 -
(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 that 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
- 39 -
disclose or furnish any non-publicly disclosed information, including,
without limitation, financial information and tax returns.
(D) Not later than 180 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, 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 Borrower's payment obligations under this Section
are further subject in all respects to the provisions of Section 3.7
and 3.8 hereof regarding the use of Priority Amounts and the effect of
drawings under the Letter of Credit.
(G) 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.
(H) 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 88-33 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
- 40 -
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. 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 correcting any
inadequate or incorrect description of the Project Realty or Project
Equipment or for carrying out the intention of or facilitating the
performance of this Agreement.
Section 6.5. 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 6.6. 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 6.7. 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.
- 41 -
Section 6.8. 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 Bank, if
any, 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 6.9. 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 6.10. 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 6.11. Covenant to Provide Continuing Disclosure. During
-----------------------------------------
any and all times that the Bonds remain outstanding, the Borrower
hereby undertakes to furnish to the Trustee and the Authority, within
ninety (90) days after the close of each fiscal year, audited annual
financial statements of the Borrower and of its subsidiaries,
consisting of:
(i) balance sheet as of the close of the Borrower's last
fiscal year;
(ii) statements of income for each of the last two fiscal years
preceding the date of the balance sheet being filed;
(iii) statements of changes in equity accounts for the periods
covered by the income statements being filed; and
- 42 -
(iv) statements of cash flows for the periods covered by the
income statements being filed;
and on an ongoing and timely basis, any other data, reports,
statements and other information of material events, necessary to
comply with Rule 15c2-12(b)(5) of the United States Securities and
Exchange Commission, as amended (the "Rule"). The financial
information to be provided by the Borrower pursuant to this Section
6.11 shall be prepared in accordance with generally accepted
accounting principles, or in accordance with the method of accounting
required by the DPUC, in either case, consistently applied, as the
same generally apply to regulated water utility companies located in
the State. The Borrower acknowledges and agrees that such information
is to be forwarded to any Bondholder by the Trustee upon written
request therefor and shall be disseminated as required by the Rule.
Section 6.12. Covenant Against Issuing Additional Debt Secured
-------------------------------------------------
By The Mortgage. The Borrower will not issue any additional debt
---------------
secured by the Mortgage unless the Bonds are equally and ratably
secured by the Mortgage.
- 43 -
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 amount that has
become due and payable with respect to the Bonds or any other
amount due and payable pursuant to the Financing Documents and
the continuance of such failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default
notification provisions of Section 6.8 hereof.
(4) The occurrence of an "Event of Default" under Section
8.1(A) of the Indenture (other than an occurrence under Section
8.1(A)(2)(a)).
(5) 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.
(6) 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,
- 44 -
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.
(4) The Trustee may exercise any and all rights it may have
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
- 45 -
determination shall extend to any subsequent or other default or impair
any right consequent thereon.
Section 7.3. 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 7.4. 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.
- 46 -
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 the forms of the Bonds, 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
Remarketing Agent and the Paying 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) The Project shall have been damaged or destroyed to
such extent that (a) the Project cannot be reasonably restored
within a period of six months from the date of such damage or
destruction to the condition thereof immediately preceding such
damage or destruction, or (b) the Borrower is thereby prevented
or likely to be prevented from carrying on its normal operation
of the Project for a period of six months from the date of such
damage or destruction.
(2) Title to or the temporary use of all or substantially
all of the Project shall have been taken or condemned by a
competent authority, which taking or
- 47 -
condemnation results or is likely to result in the Borrower being
thereby prevented or likely to be prevented from carrying on its normal
operation of the Project for a period of six months.
(3) A change in the Constitution of the State 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) that 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 Project or the operation thereof.
(4) The operation of any of the Project 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 months.
(5) Changes in the economic availability of raw materials,
operating supplies or facilities necessary for the operation of
the Project or technological or other changes shall have occurred
which the Borrower cannot reasonably overcome or control and
which in the Borrower's reasonable judgment renders the Project
unsuitable or uneconomic for the purposes herein specified or any
tax shall be levied upon payments due under the Note in an amount
which the Borrower in its reasonable judgment believes imposes an
unreasonable burden upon the Borrower.
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 Authority, the Trustee and 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.
- 48 -
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, and the Remarketing Agent at least five
(5) days before the prepayment date if Bonds to be redeemed with the
amounts to prepaid pursuant to the Indenture are then in the Flexible
Mode, and forty-five (45) days before the prepayment date if Bonds to
be redeemed with the amounts so prepaid pursuant to the Indenture are
then in any other Mode.
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.
- 49 -
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,
- 50 -
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, 000 Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxx 00000 Attention: Treasurer; if to the
Remarketing Agent, Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Municipal Bond Department; if to the Paying
Agent, Shawmut Bank Connecticut, National Association, 000 Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Corporate Trust
Department; and if to the Trustee, Shawmut Bank Connecticut, National
Association, 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention:
Corporate Trust Administration. 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
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
- 51 -
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.
Section 9.9. Separability of Invalid Provisions. In case any
----------------------------------
one or more of the provisions contained in this Loan Agreement or in
the Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
- 52 -
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 /S/ XXXXXXX X. XXXXXXXXX
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Authorized Representative
Bridgeport Hydraulic Company
By /S/XXXXX X. XXXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President and Secretary
0724H
- 53 -
APPENDIX A
Bridgeport Hydraulic Company
FORM OF
PROMISSORY NOTE
No. 1 $30,000,000
Bridgeport Hydraulic Company, a corporation organized and
existing under the laws of the State of Connecticut (the "Borrower"),
for value received, hereby promises to pay to the order of the
Connecticut Development Authority (the "Authority"), the principal sum
of $30,000,000.00 together with interest on the unpaid principal
balance thereof from the date hereof until fully and finally paid, on
the applicable Interest Payment Dates together with all taxes levied
or assessed on this Note or the debt evidenced hereby against the
holder 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 bear interest at the
Flexible, Daily or Weekly Rates, shall be computed on the basis of a
365- or 366-day year, as appropriate for the actual number of days
elapsed and, as long as the Bonds bear interest at the Multiannual
Rate or on and after the Fixed Rate Conversion Date, 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 rate permitted by
law.
This Note has been executed under and pursuant to a Loan
Agreement dated as of April 1, 1995 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 $30,000,000 Water Facilities
Revenue Bonds (Bridgeport Hydraulic Company Project - 1995 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. Advances made
pursuant to Section 6.2 of the Agreement shall bear interest at the
rate specified in accordance therewith.
The Agreement and this Note (hereinafter, together with
the Tax Regulatory Agreement, collectively referred to as the
- 54 -
"Financing Documents") have been assigned to Shawmut Bank Connecticut,
National Association (the "Trustee") acting pursuant to an Indenture
of Trust dated as of April 1, 1995 (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.
The Borrower has arranged for the delivery to Shawmut Bank
Connecticut, National Association, as Paying Agent of an irrevocable
Letter of Credit, dated the date of delivery of the Bonds, issued by
Societe Generale, acting by and through its New York Branch for the
account of the Borrower in favor of the Paying Agent. The Agreement
provides that all payment obligations of the Borrower thereunder and
under the Note shall be completely satisfied and discharged to the
extent of a corresponding payment made by the Bank upon a drawing
under the Letter of Credit for the purpose of satisfying such
obligations.
As provided in the Agreement and subject to the provisions
thereof, payments hereon are to be made at the principal office of the
Trustee in Hartford, Connecticut, 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, if any, of and
interest on the Bonds outstanding under the Indenture on each 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. Upon the
occurrence of an 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 cost, disbursements,
expenses and reasonable counsel fees of the Authority and the Trustee
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 UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR AS
OTHERWISE ALLOWED BY 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 all rights under any
statute of limitations, (2) agrees that the time for payment of this
Note may be changed and extended at the sole discretion of
- 55 -
the Trustee without impairing its liability hereon, and (3) consents to
the release of all or any part of the security for the payment thereof at
the discretion of the Trustee or the release of any party liable for
this obligation without affecting the liability of the other parties
hereto. 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.
IN WITNESS WHEREOF, Bridgeport Hydraulic Company has
caused this Note to be executed in its corporate name by its duly
authorized officer, dated May , 1995.
Bridgeport Hydraulic Company
By: ___________________________
Name:
Authorized Representative
- 56 -
AUTHORITY ENDORSEMENT
Pay to the order of Shawmut Bank Connecticut, National
Association, as Trustee, without recourse.
Connecticut Development Authority
By:_______________________________
Name:
Authorized Representative
- 57 -
APPENDIX B
Description of Project Realty
APPENDIX C
Description of Project Equipment
