Exhibit (10) (i) 63
This PARTICIPATION AGREEMENT, dated as of June 1, 1977, between the New York
State Energy Research and Development Authority, a body corporate and
politic, constituting a public benefit corporation, established and
existing under and by virtue of the laws of the State of New York (the
"Authority") and Central Xxxxxx Gas & Electric Corporation, a
corporation duly organized and existing and qualified to do business as
a public utility under the laws of the State of New York (the
"Corporation"),
W I T N E S S E T H:
WHEREAS, pursuant to special act of the Legislature of the State of New
York (Title 9 of Article 8 of the Public Authorities Law of New York, as from
time to time amended and supplemented, herein called the "Act"), the Authority
has been established, as a body corporate and politic, constituting a public
benefit corporation; and
WHEREAS, pursuant to the Act, the Authority is empowered to contract
with any power company to participate in the incorporation of features in power
plants and the construction of associated facilities to the extent required by
the public interest in development, health, recreation, safety, conservation of
natural resources and aesthetics; and
WHEREAS, the Authority is also authorized under the Act to borrow money
and issue its negotiable bonds and notes to provide sufficient moneys for
achieving its corporate purposes; and
WHEREAS, the Authority is also authorized under the Act to enter into
any contracts and to execute all instruments necessary or convenient for the
exercise of its corporate powers and the fulfillment of its corporate purposes;
and
WHEREAS, the Corporation is a public utility corporation doing business
in the State of New York and operates power plants in the State of New York; and
WHEREAS, the Legislature of the State of New York has determined that,
because interest costs incurred by public utilities are reflected in the rates
paid by the customers of such utilities and because governmental action has
mandated the installation of pollution control facilities, it is in the public
interest to enable utilities to obtain the lowest possible interest rate on
bonds sold to provide pollution control facilities; and
WHEREAS, the Corporation has requested that the Authority participate
in financing the acquisition, construction and installation of pollution control
facilities, and other facilities required by the public interest in development,
health, recreation, safety, conservation of natural resources and aesthetics at
certain of its power plants and, as part of such participation, that the
Authority issue bonds pursuant to the Act to provide funds to finance
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such facilities in an aggregate principal amount not exceeding the cost of such
facilities and the expenses incurred in connection with the authorization,
issuance and sale of such bonds; and
WHEREAS, the Authority proposes to issue its Pollution Control Revenue
Bonds (Central Xxxxxx Gas & Electric Corporation Projects), in series from time
to time, for the purpose of defraying the cost of such facilities, all such
bonds to be issued under and secured by a Bond Resolution adopted by the
Authority on May 26, 1977 (the "Resolution"); and
WHEREAS, the Authority proposes to issue an initial series of such
bonds in the principal amount of $4,500,000, designated Pollution Control
Revenue Bonds (Central Xxxxxx Gas & Electric Corporation Projects), Series A, in
order to reimburse the Corporation for its costs for the construction of certain
pollution control and other facilities in certain power plants operated by the
Corporation;
NOW, THEREFORE, for and in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, it is hereby agreed by
and between the parties as follows:
ARTICLE I
Definitions; Effective Date and Duration of Participation Agreement
SECTION 1.01. Definitions. The terms used in this Participation
Agreement which are defined in Section 1.01 of the Resolution shall have the
meanings, respectively, herein, which such terms are given in said Section 1.01
of the Resolution.
SECTION 1.02. Effective date of Participation Agreement; duration of
Participation Agreement. This Participation Agreement shall become effective
upon its execution and delivery, and shall continue in full force and effect
until the principal of and premium, if any, and interest on the First Mortgage
Bonds (as hereinafter described) and Bonds have been fully paid (or provision
for their payment has been made in accordance with the provisions of the
Resolution) and all sums to which the Authority or the Trustee are entitled
hereunder have been fully paid.
ARTICLE II
Representations
SECTION 2.01. Representations by the Authority. The Authority
represents as follows:
(a) The Authority is a body corporate and politic, constituting a
public benefit corporation, established and existing under the laws of
the State of New York;
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(b) The Authority has full power and authority to execute and deliver
this Participation Agreement and to consummate the transactions
contemplated hereby and perform its obligations hereunder;
(c) The Authority is not in default under any of the provisions of the
laws of the State of New York which would affect its existence or its
powers referred to in the preceding paragraph (b);
(d) The Authority has determined that its participation in Project A,
as contemplated by this Participation Agreement, is required by the
public interest in development, health, recreation, safety,
conservation of natural resources and aesthetics;
(e) The Authority has duly authorized the execution and delivery of
this Participation Agreement; and
(f) The execution and delivery of this Participation Agreement and the
consummation of the transactions herein contemplated will not violate
any indenture, mortgage, loan agreement or other contract or instrument
to which the Authority is a party or by which it is bound, or to the
best of the Authority's knowledge, any judgment, decree, order,
statute, rule or regulation applicable to the Authority.
SECTION 2.02 Representations and covenants by the Corporation. The
Corporation represents and covenants as follows:
(a) The Corporation is a corporation duly incorporated and in good
standing under the laws of the State of New York, is duly qualified and
authorized to engage in business as a public utility in the State of
New York, has power to enter into, execute and deliver this
Participation Agreement, the Supplemental Corporation Indenture and the
Series A First Mortgage Bonds and by proper corporate action has duly
authorized the execution and delivery of this Participation Agreement,
the Supplemental Corporation Indenture and the Series A First Mortgage
Bonds;
(b) The execution and delivery of this Participation Agreement, the
Supplemental Corporation Indenture and the Series A First Mortgage
Bonds and the consummation of the transactions herein contemplated will
not conflict with or constitute a breach of or a default under the
Corporation's Certificate of Incorporation, By-Laws or any indenture,
mortgage, loan agreement or other contract or instrument to which the
Corporation is a party or by which it is bound, or to the best of the
Corporation's knowledge, any judgment, decree, order, statute, rule or
regulation applicable to the Corporation;
(c) The Project A Pollution Control Facilities are designed to
facilitate
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compliance with applicable Federal, state and local requirements
presently in effect for control of air and water pollution and are to
be used to xxxxx or control air and water pollution or contamination by
removing, altering, disposing of or storing pollutants, contaminants,
wastes or heat;
(d) The issuance and delivery of the Series A First Mortgage Bonds in
the manner and for the purposes herein set forth have been authorized
by order of the Public Service Commission of the State of New York;
(e) Construction of each of the Project A Pollution Control Facilities
commenced prior to September 2, 1972. None of the Project A Pollution
Control Facilities was first "placed in service," within the meaning of
United States Treasury Regulation section 1.103-8(a) (5), prior to June
11, 1974; and
(f) Project A has been constructed. The Cost of Construction of Project
A is estimated by the Corporation to be not less than $4,500,000.
ARTICLE III
Construction of Projects; Issuance of Bonds
SECTION 3.01. Construction of Projects. 1. The Corporation has
completed construction of Project A and will proceed with due diligence to
complete construction of any Additional Project with all reasonable dispatch and
in accordance with the plans and specifications therefor. Each Project shall
belong to and be the property of the Corporation. In order to effectuate the
purposes of this Participation Agreement, the Corporation, in its own name, will
do or cause to be done all things requisite or proper for the construction of
each Project and the fulfillment of the obligations of the Corporation under
this Participation Agreement.
2. Notwithstanding any other provisions of this Participation Agreement
to the contrary, the Corporation shall not be required to complete the
construction of any component of a Project if the Corporation shall determine in
good faith that either:
(a) the completion of such component is no longer necessary in order to
achieve its intended purpose for any reason, including changes in law
or regulations or technological developments or a change in the design
or mode of operation of, or abandonment of operation of, the plant with
which such component is associated; or
(b) such component, if completed, will fail to achieve its intended
purpose; or
(c) the completion of construction of such component or the operation
of such component would result in the incurrence of unreasonable
expenses or liabilities by the Corporation which were not anticipated
at the date of the execution and delivery
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of the Supplemental Participation Agreement relating to any Additional
Project, and, in the opinion of an Authorized Corporation
Representative (who shall be a licensed professional engineer), the
plant with which such component is associated may be operated in
compliance with applicable regulatory standards without the inclusion
of such component.
3. Whenever the Corporation shall make a determination referred to in
subsection 2 above, the Corporation shall deliver to the Trustee and the
Authority a certificate of an Authorized Corporation Representative setting
forth such determination. Not less than 30 days prior to the delivery of such
certificate the Corporation shall notify the Authority and the Trustee of its
intention to make such determination and shall describe in reasonable detail the
basis therefor.
SECTION 3.02. Sale of Series A Bonds and deposit of proceeds;
Additional Bonds; Liability under Bonds. 1. In order to provide funds for
payment of the Cost of Construction of Project A, the Authority, as soon as
practicable after the execution of this Participation Agreement, and
concurrently with the issuance and delivery to the Trustee of the Series A First
Mortgage Bonds as provided in Section 4.01, will issue, sell and deliver the
Series A Bonds to the initial purchasers thereof, all pursuant to and as
provided in the Purchase Contract for the Series A Bonds between the Authority
and Xxxxxx, Peabody & Co. Incorporated and White, Weld & C o. Incorporated, as
Representatives, and will deposit the proceeds of such sale of the Series A
bonds and a sum equal to the accrued interest, if any, paid by the initial
purchasers of the Series A Bonds with the Trustee, in the separate account with
respect to Project A in the Project Fund.
2. So long as the Corporation shall not be in default hereunder and
whenever the Corporation so requests, the Authority may, but shall not be
obligated to, issue Additional Bonds in aggregate principal amounts specified
from time to time by the corporation (i) to finance the Cost of Construction of
any Additional Project, or (ii) to refund any Bonds, provided that the authority
shall comply with the requirements of Article III of the Resolution, the
Corporation shall comply with the requirements of Section 4.01 hereof and the
Authority and the Corporation shall enter into a Supplemental Participation
Agreement with respect to the issuance of such Additional Bonds. Each such
Supplemental Participation Agreement shall contain such provisions as the
Authority and the Corporation shall agree upon and, in the case of a
Supplemental Participation Agreement with respect to the issuance of Additional
bonds to finance the Cost of Construction of an Additional Project, shall
contain (in one or more exhibits) a description of such Additional Project.
3. The Bonds shall not be general obligations of the Authority, and
shall not constitute an indebtedness of or a charge against the general credit
of the Authority or give rise to any pecuniary liability of the Authority. The
liability of the Authority under the Bonds shall be enforceable only to the
extent provided in the Resolution, and the Bonds shall be payable solely from
the First Mortgage Bond Payments and any other funds held by the Trustee under
the Resolution and available for such payment. The Bonds shall not be a debt of
the State of New York and the State of New York shall not be liable thereon.
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SECTION 3.03. Disbursements from Project Fund. 1. The Authority has, in
the Resolution, authorized and directed the Trustee to make payments from the
Project Fund, in accordance with Section 5.03 of the Resolution, to pay the Cost
of Construction of each Project upon receipt from time to time of requisitions
signed by an Authorized Corporation Representative, stating with respect to each
payment to be made for such Project:
(a) the separate account in the Project Fund to which such requisition
relates;
(b) the requisition number;
(c) the component or components of such Project to which the
disbursement relates or has been allocated and the nature of the disbursement;
(d) the payee, which may be the corporation in the case of
reimbursements for advances and payments made or costs incurred or work done by
the Corporation;
(e) the amount of such payment;
(f) that the disbursement will be used to pay, or reimburse the
Corporation for, a Cost of Construction of such Project and that it is a proper
charge against the separate account for such Project in the Project Fund;
(g) that none of the items for which the disbursement is requested has
formed the basis for any disbursement theretofore made from the Project Fund;
(h) that the disbursement will not be used in a manner that would
result in a violation of any covenant contained in Sections 3.10 or 5.04; and
(i) that no event of default as defined in the Corporation Indenture
shall have occurred and be continuing and that no event which with the lapse of
time alone would become such a default has occurred and is continuing.
The Corporation will cause such requisitions to be submitted to the
Trustee as may be necessary to effect payments out of the Project Fund in
accordance with the provisions of the Resolution.
Concurrently with the delivery by the Corporation of each requisition
to the Trustee, the Corporation will deliver to the Authority a copy of such
requisition and any attachments thereto. The Authority and the Trustee may rely
as to the completeness and accuracy of all statements in such requisition and
the Corporation will indemnify and save harmless the Authority and the Trustee
from any liability incurred in connection with any requisition so delivered and
the payment of funds in reliance thereon.
2. Except for amounts retained by the Trustee at the written direction
of an Authorized Corporation Representative for payment of items included in the
Cost of
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Construction of any Project but not then due and payable or the liability for
payment of which is being contested or disputed by the Corporation, all moneys
attributable to any single issue of Bonds remaining in the separate account for
such Project in the Project Fund after the Completion Date with respect to such
Project shall, at the written direction of an Authorized Corporation
Representative, be paid (A) into the Bond Fund for application to (i) the
redemption of the issue of Bonds used to finance such Project pursuant to the
optional redemption, mandatory redemption or default provisions of the
Resolution, (ii) payment of interest on the issue of Bonds used to finance such
Project to the extent that the sum of (a) such interest payments and any prior
interest payments on such Bonds pursuant to this clause (ii) and (b) the amount
expended from the proceeds of any such single issue of Bonds on the Cost of
Construction of Other Project Facilities (other than issuance expenses of such
single issue of Bonds attributable thereto), is less than one-ninth of the
amount of the proceeds expended from any such single issue of Bonds on the Cost
of Construction of Pollution Control Facilities (other than issuance expenses of
such single issue of Bonds attributable thereto), or (iii) the purchase of the
issue of Bonds used to finance such Project, or any portion thereof, at a price
or prices not in excess of the then current or first applicable optional
redemption price (and, pending any such application under this clause (A), be
invested in securities provided that such investment will not be in violation of
the certifications and representations made to the Authority by the Corporation
in Section 3.11) or (B) into any other separate account (established by the
Authority pursuant to subsections 2 or 3 of Section 5.01 of the Resolution) in
the Project Fund for application solely to the Cost of Construction of any
Additional Project to be financed from such separate account. Any balance
remaining of such retained amounts to the extent not disbursed in accordance
with subsection 1 above, shall, at the written direction of an Authorized
Corporation Representative, be similarly applied.
SECTION 3.04. Revision of plans and specifications. The Corporation may
revise the plans and specifications for a Project at any time and from time to
time; provided, however that no such revision shall be made prior to the
Completion Date with respect to such Project which would render the description
of such Project inaccurate, except in accordance with the following procedure:
(a) Prior to any such revision the Corporation shall deliver to the
Trustee and the Authority (1) a certificate of an Authorized
Corporation Representative, setting forth the text of the change in the
description of such Project which would be necessary to accurately
reflect the proposed revision in plans and specifications, and
certifying that, notwithstanding such revision, such Project will still
be designed to serve the purposes which would have been served by such
Project in the absence of such revision, and (2) an unqualified opinion
of counsel, who shall be satisfactory to the Trustee, experienced in
matters relating to tax exemption of interest on bonds issued by states
and their political subdivisions, that such revisions of such Project
description and the expenditure of moneys from the Project Fund under
the provisions of the Resolution to pay the Cost of Construction of
such Project in accordance with the revised description of such Project
will not impair the
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exemption of interest on any of the Bonds then outstanding from Federal
income taxation.
(b) Ten days after the receipt by the Authority and the Trustee of the
certificate and opinion referred to in paragraph (a) above, such
Project description shall be deemed amended to include such revision
for all purposes of this Participation Agreement and the Resolution.
Upon the request of either party or the Trustee, the Authority and the
Corporation shall enter into an appropriate instrument reflecting such
amendment.
SECTION 3.05. Certification of completion of Projects. When a Project
has been completed (except for components as to which the Corporation has
delivered to the Trustee and the Authority pursuant to subsection 3 of Section
3.01 a certificate of an Authorized Corporation Representative to the effect
that the Corporation has determined not to complete such components), the
Corporation shall promptly deliver to the Trustee and the Authority a
certificate of an Authorized Corporation Representative to the effect that, as
of a specified date, such Project has been completed (except as aforesaid). Such
certificate shall specify the components of such Project, if any, the completion
of which has been excused and the date or dates of the certificate or
certificates delivered pursuant to subsection 3 of Section 3.01 with respect to
such components. The certificate delivered pursuant to this Section 3.05 shall
also contain an appropriate direction to the Trustee with respect to any amount
in the separate account relating to such Project in the Project Fund which is to
be retained or thereupon disposed of as provided in subsection 2 of Section
3.03. The Trustee may rely as to the accuracy and completeness of all statements
in such certificate.
Notwithstanding the foregoing, such certificate may state that it is
given without prejudice to any rights against third parties which exist at the
date thereof or which may subsequently come into being.
SECTION 3.06. Completion of Projects in event Project Fund inadequate.
If the moneys in the separate account relating to a Project in the Project Fund
created by the Resolution shall not be sufficient to pay the Cost of
Construction of such Project in full (whether due to investment losses or
otherwise), the Corporation shall, subject to the provisions of Section 3.01,
complete such Project and pay (whether through financing or otherwise) all that
portion of the Cost of Construction thereof in excess of the moneys available
therefor in such separate account in the Project Fund. The Authority does not
make any warranty, either express or implied, that the moneys which will be paid
into the Project Fund will be sufficient to pay the Cost of Construction on any
Project. If the Corporation shall pay any portion of the Cost of Construction of
any Project pursuant to the provisions of this Section, it shall not be entitled
to any reimbursement therefor from the Authority, the Trustee or the holders of
any of the Bonds, nor shall it be entitled to any diminution in or postponement
of the payments required to be paid by the Corporation pursuant to this
Participation Agreement or the First Mortgage Bonds.
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SECTION 3.07 Ownership and Possession of Projects. Issuance of the
Bonds will not vest in the holders thereof, the Trustee or any other person,
ownership, or the right to possession, of the Project related thereto.
SECTION 3.08 Operation, maintenance and repair. The Authority and the
Corporation recognize that the Projects constitute integrated portions of the
power plants of the Corporation and that it is not feasible to administer the
Projects separately from such plants. The Corporation shall operate the Projects
(with such changes, improvements or additions as the Corporation may deem
desirable) as part of such plants for the joint useful lives of the Projects and
such plants, and shall maintain and repair the Projects in conformity with the
Corporation's normal maintenance and repair programs for such plants; provided
that the Corporation shall have no obligation to operate, maintain or repair any
element or item of any Project the operation, maintenance, or repair any element
or item of any Project the operation, maintenance, or repair of which becomes
uneconomic to the Corporation because of damage or destruction by a cause not
within the control of the Corporation, or obsolescence (including economic
obsolescence), or change in government standards and regulations, or the
termination or transfer by the Corporation of the operation of the electric
power generation facilities to which the element or item of the Project is an
adjunct. Prior to the transfer by the Corporation of the operation of the
electric power generation facilities to which an element or item of the Project
is an adjunct, the Corporation, the Authority and the Trustee shall receive an
agreement in writing by the transferee that it shall maintain and repair the
Projects in the manner prescribed by this Section 3.08.
SECTION 3.09. Investment of moneys in funds under the Resolution. Any
moneys held as part of any fund created under the Resolution shall, at the
direction of an Authorized Corporation Representative, be invested or reinvested
by the Trustee as provided in Article VII of the Resolution.
SECTION 3.10. Disposition of Series A Bond Proceeds. The Corporation
agrees that it will not submit any requisition pursuant to Section 3.03 hereof
which, if paid, would result (upon the expenditure to pay Exempt Costs of the
balance of the proceeds of the Bonds on deposit in the Project Fund after
payment of such requisition) in less than 90 percent of the Net Proceeds of the
Bonds being used to pay Exempt Costs. The Corporation agrees that income on Bond
proceeds held in the Project Fund shall, if not transferred to the Bond Fund
pursuant to Section 5.02 of the Resolution, be used to pay any item of the Cost
of Construction of the Pollution Control Facilities.
SECTION 3.11. Arbitrage certification with respect to Series A Bonds.
The Corporation hereby certifies and represents to the Authority that it is not
expected that the proceeds of the Series A Bonds will be used in a manner that
would cause the Series A Bonds to be "arbitrage bonds" under Section 103(c) of
the Internal Revenue Code of 1954, as amended, Temporary Treasury Regulations
section 13.4 and Proposed Treasury Regulations section section 1.103-13 and
1.103-14. To the best of the knowledge and belief of the Corporation, there are
no facts, estimates or circumstances that would materially change the foregoing
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conclusion.
ARTICLE IV
FIRST MORTGAGE BONDS AND PAYMENTS
SECTION 4.01. Execution and delivery of First Mortgage Bonds to
Trustee. Concurrently with the authentication and delivery by the Authority of
any series of the Bonds and in order to evidence the obligation of the
Corporation to the Authority to repay the advance of the proceeds of such series
of Bonds, the Authority hereby directs the Corporation, and the Corporation
hereby agrees, to execute and deliver to the Trustee its First Mortgage Bonds,
duly and validly authenticated and issued under the Corporation Indenture,
relating to such series of Bonds. Such First Mortgage Bonds shall be in
substantially the form included in the Supplemental Corporation Indenture and
shall:
(a) be in an aggregate principal amount equal to the aggregate
principal amount of the Bonds then being authenticated and delivered (the
"related Bonds");
(b) provide for payments of interest equal to the payments of interest
on the related Bonds;
(c) require payments of principal, or principal plus a premium, if any,
equal to the payments required to be made on the related Bonds;
(d) contain redemption provisions, including premium, if any, or
provisions with respect to amortization of principal, together with premium, if
any, identical to the redemption or amortization provisions of the related
Bonds; and
(e) require that all payments of principal, premium, if any, and
interest on the First Mortgage Bonds be made to the Trustee in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and that each such
payment be made on or before the due date for the corresponding payment on the
related Bonds.
The Corporation shall receive a credit against its obligation to pay
the principal of and premium, if any, and interest on, as the case may be, the
Series A First Mortgage Bonds as provided in Section 15.07 of the Resolution.
SECTION 4.02. Prepayment to redeem Bonds. Whenever any series of the
Bonds is redeemable in whole or in part, the Authority will redeem the same at
the written direction of an Authorized Corporation Representative, and the
Corporation will pay, as a prepayment of the amount due on the First Mortgage
Bonds corresponding to such series of the Bonds, an amount equal to the total
cost of such redemption, less the amount, if any, in the Bond Fund on the date
fixed for such redemption and available and designated for such redemption
payment.
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SECTION 4.03. Obligation for payment absolute; deficiencies. The
Corporation agrees that its obligation to make the First Mortgage Bond Payments
at the times and in the amounts provided in the First Mortgage Bonds shall be
absolute, irrevocable and unconditional and shall not be subject to any defense
(other than payment) or any right of setoff, counterclaim or recoupment for any
reason, including, without limitation, the unenforceability (because of judicial
decision or otherwise) or the impossibility of performance of the First Mortgage
Bond obligations, or any breach by the Authority of any obligation to the
Corporation, whether under this Participation Agreement or otherwise, or
inaccuracy of any representation by the Authority to the Corporation under this
Participation Agreement, or any indebtedness or liability at any time owing to
the Corporation by the Authority or any failure to complete any Project, or the
destruction by fire or other casualty of any Project or any portion thereof, or
the taking of title thereto or the use thereof by the exercise of the power of
eminent domain, provided, however, that the foregoing shall not be deemed to be
a waiver of any right of recourse the Corporation may have against the
Authority. If for any reason First Mortgage Bond Payments, together with other
moneys held by the Trustee and then available for such purpose, would not be
sufficient to make the corresponding payments of principal (including sinking
fund installments) of and premium, if any, either at maturity, upon redemption,
by declaration or otherwise and interest on, the Bonds when such payments are
due, the Corporation will pay the amounts required from time to time to make up
any such deficiency.
SECTION 4.04. Administration Fees; expenses, etc. In order to defray a
portion of the expenses incurred by the Authority in conducting and
administering its programs for the acquisition and construction of pollution
control facilities and the development of advanced technologies, the Corporation
shall pay to the Authority Administration Fees in the following amounts and on
the following dates:
(a) On the date of authentication and delivery of the Series A Bonds to
the initial purchasers, $22,500; and
(b) On the date of authentication and delivery of the Series A Bonds,
and on June 1 of each year thereafter so long as any Series A Bonds are
outstanding, the sum of $2,500.
In addition to such Administration Fees, the Corporation will pay or
reimburse the Authority upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Authority (including printing
costs and the reasonable fees, expenses and disbursements of its counsel and
bond counsel) in connection with (i) the issuance, exchange, registration or
transfer of the Bonds, the temporary Bonds, Additional Bonds or Bonds
representing the unredeemed portion of Bonds called for redemption; (ii) the
performance of Sections 4.02, 4.03, 9.02, 9.03, 9.04 and 9.05 of the Resolution;
(iii) the obtaining and furnishing of information or advice to the Trustee
pursuant to Section 11.04 of the Resolution; (iv) the appointment of successor
Trustees, Paying Agents and successor Paying Agents; (v) the execution and
delivery of Supplemental Participation Agreements; (vi) the adoption of
resolutions supplementing or amending the Resolution;
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and (vii) the release of the Resolution pursuant to Section 14.01 thereof.
SECTION 4.05. Compensation of Trustee and Paying Agents. The
Corporation agrees to pay to the Trustee until the principal of and premium, if
any, and interest on the Bonds shall have been fully paid: (i) an amount equal
to the initial or acceptance fee of the Trustee and the annual fee of the
Trustee for its ordinary and reasonable services rendered and its ordinary and
reasonable expenses incurred as Trustee under the Resolution, as and when the
same become due; (ii) reasonable fees and charges of the Trustee, as Bond
Registrar, and any Paying Agent, as provided in the Resolution, as and when the
same become due; and (iii) the reasonable fees and charges of the Trustee for
the necessary extraordinary services rendered by it and extraordinary expenses
incurred by it under the Resolution, as and when the same become due, provided
that the Corporation will not be required to pay for any such extraordinary
services or extraordinary expenses so long as it is contesting the same in good
faith.
SECTION 4.06. Projects not security for Bonds. It is expressly
recognized by the parties that the Projects will not constitute any part of the
security for the Bonds, except to the extent that Project A is subject to the
lien of the Corporation Indenture for the benefit of the holders of all of the
Corporation's first mortgage bonds, including the Series A First Mortgage Bonds.
The principal security for the Bonds shall be the First Mortgage Bonds and the
absolute, irrevocable and unconditional obligation of the Corporation to make
the First Mortgage Bond Payments.
SECTION 4.07. Payment of taxes and assessments; no liens or charges.
The Corporation will (a) pay, when the same shall become due, all taxes and
assessments, including income, profits, property or excise taxes, if any, or
other municipal or governmental charges, imposed, levied or assessed by the
Federal, state or any municipal government upon the Authority or the Trustee in
respect of any payments (other than payments made pursuant to Sections 4.04 and
4.05) made or to be made pursuant to this Participation Agreement or the First
Mortgage Bonds, and (b) pay or cause to be discharged, within sixty (60) days
after the same shall accrue, any lien or charge upon any such payment made or to
be made under this Participation Agreement, provided that the Corporation shall
not be required to pay any such tax or assessment so long as (i) the Corporation
at its expense contests by appropriate legal proceedings conducted in good faith
and with due diligence the amount, validity or application of any such tax,
assessment or charge, (ii) such proceedings shall have the effect of suspending
the collection thereof from the Authority and the Trustee, and (iii) the
Corporation shall indemnify and hold the Authority and the Trustee harmless from
any losses, costs, charges, expenses (including reasonable attorneys' fees and
disbursements), judgments and liabilities arising in respect of such tax,
assessment or charge and the nonpayment thereof.
SECTION 4.08. Indemnification of Authority and Trustee. Any obligation
of the Authority created by or arising out of this Participation Agreement shall
be a limited obligation of the Authority, payable solely from the First Mortgage
Bond Payments and any other funds held by the Trustee under the Resolution and
available for such payment, and
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shall not constitute an indebtedness of or a charge against the general credit
of the Authority and shall not constitute or give rise to any pecuniary
liability of the Authority; nevertheless, if the Authority shall incur any such
pecuniary liability, then in such event the Corporation shall indemnify and hold
the Authority harmless by reason thereof. The Corporation releases the Authority
and the Trustee from, agrees that the Authority and the Trustee shall not be
liable for, and agrees to indemnify and hold the Authority and the Trustee
harmless from, any liability for any loss or damage to property or any injury to
or death of any person that may be occasioned by any cause whatsoever arising
out of the construction or operation of any Project. The Corporation agrees to
indemnify and hold the Authority, its members, officers and employees and the
Trustee harmless from any losses, costs, charges, expenses (including reasonable
attorneys' fees and disbursements), judgments and liabilities incurred by it or
them, as the case may be, in connection with any action, suit or proceeding
instituted or threatened in connection with the transactions contemplated by
this Participation Agreement so long as it or they, as the case may be, have
acted in good faith to carry out the transactions contemplated by this
Participation Agreement.
SECTION 4.09. Corporation to pay attorneys' fees and disbursements. If
the Corporation shall default under any of the provisions of this Participation
Agreement and the Authority or the Trustee or both shall employ attorneys or
incur other expenses for the collection of payments due under this Participation
Agreement or for the enforcement of performance or observance of any obligation
or agreement on the part of the Corporation contained in this Participation
Agreement, the Corporation will on demand therefor reimburse the reasonable fees
of such attorneys and such other reasonable disbursements so incurred.
SECTION 4.10. No abatement of Administration Fees and other charges. It
is understood and agreed that so long as any Bonds are outstanding under the
Resolution, Administration Fees and other charges payable to the Authority
pursuant to this Participation Agreement shall continued to be payable at the
times and in the amounts herein specified, whether or not any Project, or any
portion thereof, shall have been destroyed by fire or other casualty, or title
thereto or the use thereof shall have been taken by the exercise of the power of
eminent domain and that there shall be no abatement of any such Administration
Fees and other charges by reason thereof.
SECTION 4.11. Prepayment of First Mortgage Bonds. The Corporation shall
not prepay any First Mortgage Bonds or any portion thereof except in connection
with a permitted redemption or repurchase prior to maturity of all or a portion
of the related Bonds or pursuant to Article XIV of the Resolution.
ARTICLE V
SPECIAL COVENANTS
SECTION 5.01. No warranty as to suitability of Projects. The Authority
makes
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no warranty, either express or implied, with respect to actual or designed
capacity of any Project, as to the suitability of any Project for the purposes
specified in this Participation Agreement, as to the condition of any Project,
or that any Project will be suitable for the Corporation's purposes or needs.
SECTION 5.02. Authority's right to inspect Projects and plans and
specifications. The Authority shall have the right at all reasonable times to
examine and inspect the Projects and, to the extent reasonably available, the
plans and specifications therefor.
SECTION 5.03. Corporation consent to amendment of Resolution. The
Authority shall not adopt any resolution supplemental to or amendatory of the
Resolution which affects the rights or obligations of the Corporation without
the prior consent of the Corporation as evidenced by a certificate in writing
signed by an Authorized Corporation Representative.
SECTION 5.04. Tax Status of Bonds. The Corporation shall not use or
direct the use of moneys from the Project Fund or take or permit to be taken any
other action over which it exercises control, which use or other action would
result in interest on any of the Bonds being included in the gross income, as
defined in Section 61 of the Internal Revenue Code of 1954, as amended ("the
Code"), of a holder or holders of any of the Bonds (other than a holder who is a
"substantial user" or a "related person" within the meaning of Section 103(b)(7)
of the Code and the applicable regulations thereunder).
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Disposition of amounts after payment of Bonds. Any
amounts remaining in the funds created under the Resolution after payment in
full of principal of and premium, if any, and interest on all the Bonds, or
provision for payment thereof having been made in accordance with the provisions
of the Resolution, and payment of all the fees, charges and expenses of the
Authority, the Trustee and Paying Agents in accordance with the Resolution and
this Participation Agreement, shall belong to and be paid to the Corporation by
the Trustee in accordance with the provisions of the Resolution.
SECTION 6.02. Notices. All notices, certificates, requests or other
communications between the Authority, the Corporation and the Trustee required
to be given under this Participation Agreement or under the Resolution shall be
sufficiently given and shall be deemed given when delivered or mailed by first
class mail, postage prepaid, addressed as follows: if to the Authority, at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; if to the
Corporation, at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx 00000, Attention:
Treasurer; and if to the Trustee, at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Department. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the
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Authority, the Corporation or the Trustee shall also be given to the others. The
Corporation, the Authority and the Trustee may, by notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
SECTION 6.03. Successors and assigns. This Participation Agreement
shall inure to the benefit of and shall be binding upon the Authority, the
Corporation and their respective successors and assigns.
SECTION 6.04. Amendment of Participation Agreement. This Participation
Agreement may not be amended except by an instrument in writing signed by the
parties and, if such amendment occurs after the issuance of the Series A Bonds,
upon compliance with the provisions of Sections 4.02 and 4.03 of the Resolution.
SECTION 6.05. Assignment by Authority. The Authority shall assign its
rights under and interest in this Participation Agreement (except the rights and
interest of the Authority under Article III and Sections 4.04, 4.08, 4.09, 4.10,
and 4.11), subject to the provisions of this Participation Agreement relating to
the amendment thereof, to the Trustee pursuant to the Resolution, as security
for payment of the principal of and premium, if any, and interest on the Bonds
but such assignment shall be subject to the provisions of this Participation
Agreement. In addition, the Trustee shall have the same power as the Authority
to enforce from time to time the rights of the Authority set forth in Article
III, subject to the provisions of this Participation Agreement relating to the
amendment hereof. Except as provided in this Section 6.05, the Authority will
not sell, assign, transfer, convey or otherwise dispose of its interest in this
Participation Agreement during the term of this Participation Agreement.
SECTION 6.06. Participation Agreement supersedes any prior agreements.
This Participation Agreement supersedes any other prior agreement or
understanding, written or oral, between the parties.
SECTION 6.07. Counterparts. This Participation Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original; but such counterparts shall together constitute
but one and the same Participation Agreement.
SECTION 6.08. Severability. If any clause, provision or section of this
Participation Agreement is held illegal, invalid or unenforceable by any court
or administrative body, such Participation Agreement shall be construed and
enforced as if such illegal or invalid or unenforceable clause, provision or
section had not been contained in this Participation Agreement. In case any
agreement or obligation contained in this Participation Agreement be held to be
in violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of the Authority or the Corporation, as the case may be,
to the full extent permitted by law.
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SECTION 6.09. New York law to govern. The laws of the State of New York
shall govern the construction of this Participation Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed as of the day and year first written above.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By: /s/ N. XXXXXXX XXXXXXXXX
-------------------------------
(Seal) Chairman
Attest: XXXXXX X. XXXXXXXXX
Ass't. Secretary
CENTRAL XXXXXX GAS & ELECTRIC
CORPORATION
By: /s/ X. XXXXXXX CROSS
-------------------------------
(Seal) Vice President
Attest: XXXXXX X. XXXXXXX
Secretary
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EXHIBIT A
(To Participation Agreement dated as of June 1, 1977 between New York State
Energy Research and Development Authority and Central Xxxxxx Gas & Electric
Corporation)
DESCRIPTION OF PROJECT A
POLLUTION CONTROL FACILITIES
The Project A Pollution Control Facilities consist of certain air and
water pollution control facilities and sewage and solid waste disposal
facilities which, together with other facilities, have been constructed at the
Roseton Electric Generating Plant (owned, as tenants in common, by the
Corporation, Consolidated Edison Company of New York, Inc. and Niagara Mohawk
Power Corporation) and at the Corporation's Danskammer Electric Generating
Plant. Both such Plants are located in Orange County, New York, in the
Corporation's franchise area.
ROSETON PLANT
Dust Collection and Fly Ash Reinjection System. This system is designed
to remove fly ash from boiler exhaust gases and reinject the ash into the boiler
for burning. The dust collector on each boiler consists of a structural
foundation, a support structure, casing inlet and outlet duct connections,
internal dust and gas separating elements, dust collector hoppers, internal flow
dividers, xxxxxx level sensors, xxxxxx outlet valving and interlocking, and
automatic control and sequencing equipment for continual removal of residue
collected in the hoppers. The fly ash reinjection system on each boiler consists
of a transport piping system from the dust collector hoppers to the boiler,
motor driven air blowers and air heaters to supply hot transport air, controls
and instrumentation for motors and heaters, and associated electrical and
pneumatic equipment.
Waste Water Treatment System. The facilities are designed to remove
pollutants from the process discharge water and consist of lift stations, a
gravity transport line to the waste treatment area, four waste water treatment,
settling and neutralizing basins, transfer pumps, piping, chemical injectors,
skimming and final settling facilities, and associated pumps, piping, controls,
instrumentation and electrical equipment.
Sewage Treatment System. The sewage treatment system is designed to
treat raw sanitary sewage and consists of a lift station, gravity transport
line, wet xxxxx, a package type sewage treatment plant equipped with aerating
blowers, skimmer, electrical controllers and instrumentation, and associated
piping, pumps, chemical feeders and other controls.
Fuel Oil Spill Control Facilities. The fuel oil spill control equipment
is designed to prevent spilled oil from contaminating the Xxxxxx River and
consists of a floating boom used to encircle fuel ships and barges during
unloading, a motorboat to tow the boom into place, oil separating and monitoring
pits for drainage from fuel oil storage tank areas, and welded steel envelopes
around storage tanks. A sheet piling baffle extending from above
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the river water surface to the river bottom encloses the outlet of the storm and
storage tank farm drain to entrap any oil which may escape from anywhere on the
plant property.
DANSKAMMER PLANT
Waste Water Treatment Facilities. The facilities are designed to remove
pollutants from the process discharge water. The treatment plant consists of
three basins for settlement of solids and equalization of pH, pumps, piping,
controls and instrumentation.
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EXHIBIT B
(To Participation Agreement dated as of June 1, 1977 between New York State
Energy Research and Development Authority and Central Xxxxxx Gas & Electric
Corporation)
DESCRIPTION OF OTHER PROJECT A FACILITIES
The Other Project A Facilities consist of facilities of the Corporation
which are required by the public interest in development, health, recreation,
safety, conservation of natural resources or aesthetics and which have been
constructed at the Roseton Electric Generating Plant (owned by the Corporation,
Consolidated Edison Company of New York, Inc. and Niagara Mohawk Power
Corporation) and at the Corporation's Danskammer Electric Generating Plant. Both
such Plants are located in Orange County, New York, in the Corporation's
franchise area.
ROSETON PLANT
Smoke Density Meters. These meters will measure the opacity of stack
gases in order to indicate the presence of abnormal boiler burning conditions
which could lead to unacceptable emissions to the atmosphere.
Yard Drainage System, Fuel Oil Trench and Oil Tank Berm. The yard
drainage system is designed to collect drainage water and channel it to the
Xxxxxx River after any contaminant oil has been separated from the drainage
flow. The fuel oil drainage trench serves to trap any leaks from sunken oil
pipelines and thus prevents the seepage of oil into underground water streams.
The oil tank berm is designed to contain spillage from the Roseton Plant's fuel
oil storage tanks.
DANSKAMMER PLANT
Fly Ash Reinjection System. The system will serve to collect fly ash
precipitated out of the furnace vent stream and reinject the collected ash into
the furnace chamber. It will consist of positive displacement air blowers, air
heaters and associated valves and piping.
Stack Testing Platforms. These platforms, which gird the plant stacks
at the level of the stack testing ports, are required in order to facilitate
testing periodically required by the New York State Department of Environmental
Conservation to check compliance with the Department's emission standards.
Oil Spill Containment System. This system is composed of a boom and
launch that serve to contain and collect oil spills in the Xxxxxx River.
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