EXHIBIT 10.2.08
LOAN AGREEMENT
Between
MASSACHUSETTS INDUSTRIAL FINANCE AGENCY
and
EASTERN EDISON COMPANY
Dated as of July 1, 1993
Financed by the Issue of
$40,000,000
Massachusetts Industrial Finance Agency
5 7/8% Pollution Control Revenue Refunding Bonds, 1993 Series
(Eastern Edison Company Project)
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS ......................................
ARTICLE II - REPRESENTATIONS BY THE COMPANY ......................3
Section 2.1 Existence and Subsidiaries.........................3
Section 2.2 Authority..........................................3
Section 2.3 Binding Agreement. ................................3
Section 2.4 Regulatory Approvals...............................3
Section 2.5 No Event of Default. ..............................4
Section 2.6 Useful Life of Project. ...........................4
Section 2.7 Use of Loan Proceeds...............................4
Section 2.8 No Untrue or Omitted Statements....................4
Section 2.9 Inducement.........................................4
Section 2.10 Commencement and Use....... .......................4
Section 2.11 Project is a "Project". ...........................5
Section 2.12 Use of 1983 Loan Proceeds..........................5
Section 2.13 Completion of Project..............................5
ARTICLE III - REPRESENTATIONS OF THE AGENCY ......................5
Section 3.1 Existence..........................................5
Section 3.2 Authority..........................................5
Section 3.3 Binding Special Obligations........................6
Section 3.4 Disclaimer as to Tax-Exempt
Status of 1993 Series Bonds.........................6
ARTICLE IV - ISSUANCE OF BONDS ....................................6
ARTICLE V
LOAN PAYMENTS AND ADDITIONAL PAYMENTS...............7
Section 5.1 Loan Payments...............................7
Section 5.2 Additional Payments.........................7
Section 5.3 Assignment of Rights; Place of Payments.....8
Section 5.4 Obligations Unconditional...................8
Section 5.5 Prepayment of Loan Payments and
Additional Payments; Other Payments...........8
Section 5.6 Redemption of Bonds.........................9
ARTICLE VI - COVENANTS OF THE COMPANY ............................9
Section 6.1 Affirmative Covenants.......................9
Section 6.2 Negative Covenant as to Tax Exempt
Status of Bond Interest. .....................10
ARTICLE VII - DEFAULT PROVISIONS AND REMEDIES OF
THE AGENCY AND TRUSTEE ............................10
Section 7.1 Defaults; Events of Default.................10
Section 7.2 Remedies on Default.........................11
Section 7.3 Agreement to Pay Costs of Collection. ......12
Section 7.4 Waiver. ....................................12
ARTICLE VIII - MISCELLANEOUS .....................................12
Section 8.1 Indemnification....................................12
Section 8.2 Limitations on Liability of the Agency,
the Trustee and any Paying Agent.............................13
Section 8.3 Avoidance of Arbitrage.............................14
Section 8.4 Assignment of Agreement by the Agency..............14
Section 8.5 Termination........................................15
Section 8.6 Notices............................................15
Section 8.6 Binding Effect.....................................15
Section 8.7 Severability.......................................15
Section 8.8 Amendments, Changes and Modifications..............15
Section 8.9 Captions; Table of Contents........................15
Section 8.10 Counterparts.................................16
Section 8.11 Governing Law................................16
EXHIBIT A ...........................................................1
LOAN AGREEMENT
THIS LOAN AGREEMENT made as of the 1st day of July, 1993, by and between
Massachusetts Industrial Finance Agency (the "Agency") and Eastern Edison
Company, a Massachusetts corporation (the "Company"),
WITNESSETH
That, in consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows; provided, that any
financial obligation of the Agency created by or arising out of this Agreement
shall not constitute a general obligation of the Agency or a pledge of the
faith and credit of the Agency or a debt or pledge of the faith and credit or
the taxing power of The Commonwealth of Massachusetts or any political
subdivision thereof but shall be payable solely out of the Pledged Receipts
(as defined in the Trust Agreement hereinafter referred to) and other moneys
as therein provided:
ARTICLE I
DEFINITIONS
In addition to the words and terms defined in the Trust Agreement or elsewhere
in this Agreement, the following words and terms as used in this Agreement and
in any certificate or other document executed by any party in connection
therewith shall have the following meanings unless the context or use
indicates another or different meaning or intent.
"Additional Payments" means the amounts required to be paid by the provisions
of Section 5.2 hereof.
"Bond Purchase Agreement" means the agreement dated July 14, 1993 between the
Agency and the Purchasers.
"Bonds" means the 1993 Series Bonds, any Bond or Bonds issued in exchange
therefor or replacement thereof pursuant to Sections 2.5, 2.6, 2.7, 2.8 and
2.9 of the Trust Agreement and any Additional Bonds.
"Code" means the Internal Revenue Code of 1954, as amended from time to time,
and such provisions of the Internal Revenue Code of 1986, as amended from time
to time, as may be applicable to the 1993 Series Bonds.
"Enabling Act" means Massachusetts General Laws Chapters 23A and 40D, each as
amended.
"Inducement Letter" means the letter dated July 14, 1993 from the Company to
the Agency and the Purchasers relating to the Bonds.
"Loan" means the loan by the Agency to the Company made pursuant to Section
4.1 hereof of the proceeds from the sale of the 1993 Series Bonds initially
issued to the Purchaser.
"Loan Payments" means the amounts required to be paid by the provisions of
Section 5.1 hereof.
"Loan Payment Date" means the business day before each Bond Payment Date and
before each Interest Payment Date which is not a Bond Payment Date.
"Montaup" means Montaup Electric Company, a Massachusetts corporation and a
wholly-owned subsidiary of the Company.
"1993 Series Bonds" means the bonds initially issued by the Agency pursuant to
Section 2.1 of the Trust Agreement.
"Officer" when used in connection with the Company or Montaup means any
officer designated by a certificate signed on behalf of the Company by the
Chairman, Vice- Chairman, President, any Vice-President, the Treasurer or
Assistant Treasurer or the clerk or any assistant clerk of the Company.
"Paying Agent" means any bank or trust company designated as paying agent for
the Bonds (and may include the Trustee) and its successor or successors
hereafter appointed in the manner provided in the Trust Agreement.
"Plant" means the electrical generating facilities of Montaup located in
Somerset, Massachusetts.
"Project" means the pollution control facilities described in Exhibit A
attached hereto.
"Purchasers" means Goldman, Sachs & Co. and Citicorp Securities Markets, Inc.,
as initial purchasers of the 1993 Series Bonds.
"Tax Compliance Certificate" means a tax compliance certificate or similar or
related certificates dated the Closing Date (as defined in the Bond Purchase
Agreement) and signed by the Company as to certain tax matters relating to the
1993 Series Bonds.
"Trust Agreement" means the Trust Agreement of even date herewith between the
Agency and Shawmut Bank, N.A., as Trustee, securing the 1993 Series Bonds, and
all agreements amendatory thereof or supplemental thereto.
"Trustee" means the trustee at the time serving as such under the Trust
Agreement.
ARTICLE II
REPRESENTATIONS BY THE COMPANY
The Company makes the following representations:
Section2.1 Existence and Subsidiaries. The Company is a corporation duly
organized and validly existing under the laws of Massachusetts and has all
requisite corporate power and authority to own and operate its properties and
to conduct its business as now being conducted and proposed to be conducted.
The Company has all requisite corporate power and authority to enter into and
perform this Agreement and the Inducement Letter. The Company is not required
to be qualified to do business as a foreign corporation in any jurisdiction.
The Company's only subsidiary is Montaup. Montaup is duly qualified to do
business as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 2.2 Authority. The execution and performance of this Agreement and the
Inducement Letter have been duly authorized on the part of the Company by all
necessary action and will not violate or constitute a default under the
Company's charter documents or by-laws or any agreement or instrument binding
upon it or its assets or any applicable law or regulation of any governmental
authority.
Section 2.3 Binding Agreement. This Agreement and the Inducement Letter are
the valid and binding obligations of the Company, enforceable in accordance
with their respective terms.
Section 2.4 Regulatorv Approvals. The Massachusetts Department of Public
Utilities and the United States Securities and Exchange Commission have
approved all matters relating to the Company's participation in the
transactions contemplated by this Agreement, the Trust Agreement, the Bond
Purchase Agreement and the Inducement Letter which require said approval. With
respect to other consents, approvals, authorizations or other orders of any
regulatory body or administrative agency or other governmental body legally
required for the Company's participation therein, except such as have been
obtained or may be required under state securities laws, the Company expects
in good faith that all such consents, approvals, authorizations or orders not
completed or obtained as of the date of execution of this Agreement will be
forthcoming on or prior to the Closing Date.
Section 2.5 No Event of Default. No event has occurred and is continuing and
no condition exists which constitutes or, after notice or lapse of time or
both, would constitute a default or event of default by the Company hereunder.
Section 2.6 Useful Life of Project. Upon the redemption of the Agency's
Pollution Control Revenue Bonds, 1983 Series (Eastern Edison Company Project)
(the "1983 Series Bonds"), on or prior to April 1, 1994, the term of the 1993
Series Bonds, when added to the term of the 1983 Series Bonds, is not greater
than 120% of the original useful life of the Project.
Section 2.7 Use of Loan Proceeds. The proceeds of the Bonds will be used to
refund the $40,000,000 aggregate principal amount of the 1983 Series Bonds.
Section 2.8 No Untrue or Omitted Statements. No one of this Agreement, the
Bond Purchase Agreement, or the Inducement Letter or any other document,
certificate or statement prepared by or on behalf of or furnished by or on
behalf of the Company to the Agency or to the Purchasers in connection with
this Agreement, or the Bond Purchase Agreement or the Inducement Letter or
relating to the issue and sale by the Agency or the purchase by the Purchasers
of the Bonds contains any untrue statement of a material fact concerning the
Company or omits to state a material fact necessary in order to make the
statements contained herein and therein with respect to the Company not
misleading. There is no fact (other than facts relating to general economic
conditions) since December 31, 1992 which materially adversely affects the
business, operations, affairs, conditions, properties or assets of the Company
which has not been set forth in a document, certificate or statement furnished
to the Purchasers by or on behalf of the Company prior to or on the date of
delivery hereof.
Section 2.9 Inducement. The Project was, at the time of its acquisition,
construction and installation, and is at the present time, necessary for the
prevention, avoidance, reduction, control, abatement or elimination of
pollution which may be effected by the operation of the Plant; and the Company
presently intends to continue to cause Montaup to operate the Project.
Section 2.10 Commencement and Use. Acquisition, construction and installation
of the Project did not commence prior to November S, 1981; the properties
constituting the Project are land or property of a character subject to the
allowance for depreciation provided for in the Code; and the Commissioner of
the Massachusetts Department of Environmental Quality Engineering (now known
as the Department of Environmental Protection) certified that the Project, as
designed, is in furtherance of the purpose of abating or controlling
pollution.
Section 2.11 Project is a "Project". The Project is, and was at the time of
the issuance of the 1983 Series Bonds, a "project" within the definition of
such term in the Enabling Act.
Section 2.12 Use of 1983 Loan Proceeds. Substantially all of the proceeds from
the sale of the 1983 Series Bonds (being at least 90% of such proceeds after
deducting expenses of issuing the 1983 Series Bonds), were used for the
acquisition, construction, reconstruction, improvement and/or installation of
the Project, and all of such proceeds were used to pay "costs of the Project"
as defined in Section 1(e) of Chapter 40D of the General Laws of
Massachusetts.
Section 2.13 Completion of Project. The Company has completed the Project in
accordance with all material laws and regulations and in accordance with the
requirements of Article IV of the Loan Agreement dated as of August 1, 1983
(the "1983 Loan Agreement") between the Agency and the Company, and has taken,
and shall take, no action which would affect the qualification of the Project
as a "project," as defined in the Enabling Act, or would affect in any
material respect the description of the Project approved by the Agency.
ARTICLE III
REPRESENTATIONS OF THE AGENCY
The Agency makes the following representations:
3.1 Existence. The Agency is a body politic and corporate and a public
instrumentality of The Commonwealth of Massachusetts established under Chapter
23A of the General Laws of Massachusetts, with the powers under and pursuant
to the Enabling Act to execute and deliver this Agreement, the Trust Agreement
and the Bond Purchase Agreement, to perform its obligations under each thereof
and to issue and sell the 1993 Series Bonds in order to refund the 1983 Series
Bonds pursuant hereto and pursuant to the Trust Agreement.
3.2 Authority. The Agency has taken all necessary action and has complied with
all provisions of the Constitution of The Commonwealth of Massachusetts and
the Enabling Act (including but not limited to the making of the findings
required by Sections 12 and 22 of Chapter 40D, to the extent applicable to the
1993 Series Bonds) required to make this Agreement, the Trust Agreement, the
Bond Purchase Agreement and the 1993 Series Bonds the valid obligations of the
Agency that they purport to be; and, when executed and delivered by the
parties thereto, the Trust Agreement and this Agreement will constitute
valid and binding agreements of the Agency and be enforceable in accordance
with their respective terms, except as enforceability may be subject to the
exercise of judicial discretion in accordance with general equitable
principles and to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws for the relief of debtors heretofore or hereafter
enacted to the extent that the same may be constitutionally applied.
3.3 Binding Special Obligations. When delivered to and paid for by the
Underwriters in accordance with the terms of the Bond Purchase Agreement and
the Trust Agreement, the 1993 Series Bonds will constitute valid and binding
special obligations of the Agency enforceable in accordance with their terms,
except as enforceability may be subject to the exercise of judicial discretion
in accordance with general equitable principles and to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief of
debtors heretofore or hereafter enacted to the extent that the same may be
constitutionally applied, and will be entitled to the benefits of the Trust
Agreement.
3.4 Disclaimer as to Tax-Exempt Status of 1993 Series Bonds. The Agency makes
no representation or warranty that the 1993 Series Bonds and any income
derived therefrom is or will be exempt from federal or state taxation.
ARTICLE IV
ISSUANCE OF BONDS
Section 4.1 Issuance of 1993 Series Bonds: Deposit of 1993 Series Bond
Proceeds Constitutes Loan. In order to provide funds to make the Loan and
thereby refund the 1983 Series Bonds, the Agency shall, pursuant to the Bond
Purchase Agreement, issue and sell the 1993 Series Bonds to the Purchasers and
deposit the proceeds of the 1993 Series Bonds (excluding accrued interest) in
the Bond Fund created under the Trust Agreement between the Agency and State
Street Bank and Trust Company as Trustee dated as of August 1, 1983. Such
deposit shall constitute the Loan to the Company of the proceeds of sale of
the 1993 Series Bonds. All accrued interest included in the purchase price of
the 1993 Series Bonds shall be deposited in the Bond Fund established pursuant
to Section 4.1 of the Trust Agreement.
The proceeds of such sale deposited in the Bond Fund established under the
1983 Loan Agreement shall be applied immediately by the Agency to the
outstanding principal balance of the Loan made by the Agency to the Company
pursuant to such Loan Agreement (the "1983 Loan"). The Company shall pay to
the Agency any accrued but unpaid interest and premium, if any, on the 1983
Loan.
ARTICLE V
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 5.1 Loan Payments. On or before each Loan Payment Date the Company
shall pay or cause to be paid to the Trustee, a sum, for deposit in the Bond
Fund, as a Loan Payment hereunder and for the repayment of the Loan, in funds
available on the Loan Payment Date, in an amount which, when added to the
balance then in the Bond Fund and available for such purpose, shall be equal
to the amount payable as principal of (whether at stated maturity, or at
maturity as the same may be accelerated pursuant to any mandatory redemption
requirements) and premium, if any, and interest, on the Bonds on the next
Interest Payment Date or Bond Payment Date, as the case may be.
In any event the sum of the Loan Payments payable under this Section for the
repayment of the Loan shall be sufficient to pay the total amount due with
respect to principal of and interest, including but not limited to interest
payable pursuant to the Trust Agreement on any overdue amount, and any premium
on the Bonds as and when due, and if at any time when said payments on or in
respect of the Bonds are due, whether by acceleration, redemption or
otherwise, the balance in the Bond Fund available for said purpose is
insufficient to make such payments, the Company shall forthwith pay a Loan
Payment to the Trustee in an amount equal to the deficiency. If at any time
all the Outstanding Bonds are paid within the meaning of the third paragraph
of Section 6.1 of the Trust Agreement, the Company shall not be obligated to
make any further Loan Payments under the provisions of this Section.
Section 5.2 Additional Pavments. The Company shall make Additional Payments
as follows:
(1) To the Agency on demand, as reimbursement for any and all costs,
expenses and liabilities paid or incurred by the Agency, including reasonable
fees of counsel and disbursements thereof, in satisfaction of any obligations
of the Company hereunder or under the Bond Purchase Agreement, the Trust
Agreement or the Inducement Letter not performed by the Company in accordance
with the terms hereof or thereof;
(2) To the Agency on demand, as reimbursement for or prepayment of any
and all costs, expenses and liabilities, paid or incurred or to be paid or
incurred by the Agency or any of its directors, officials, officers, employees
and agents, including reasonable fees of counsel and disbursements thereof,
whether requested by the Company, otherwise required by or reasonably incurred
pursuant to this Agreement, the Trust Agreement, the Bond Purchase Agreement,
the Inducement Letter or the Enabling Act, or relating to the approval,
authorization or issuance of the Bonds, any Additional Bonds or matters
relating thereto, including but not limited to charges or fees of the Agency
required to be paid in respect of the Bonds and Additional Bonds; and
(3) To the Trustee, the reasonable fees, charges and expenses of the
Trustee as trustee, bond registrar and paying agent, including the reasonable
fees, charges and expenses of its attorneys and agents and the amounts payable
to the Trustee pursuant to Sections 8.1.2 and 8.2 of the Trust Agreement, and
of any other paying agent on the Bonds under the Trust Agreement all as
provided in the Trust Agreement, as and when the same become due, and as
reimbursement for any and all costs, expenses and liabilities paid or incurred
by the Trustee in satisfaction of any obligations of the Company hereunder or
under the Trust Agreement, the Bond Purchase Agreement or the Inducement
Letter not performed in accordance with the terms hereof or thereof by the
Company.
Section 5.3 Assignment of Rights: Place of Pavments. It is understood and
agreed that all rights and interest of the Agency under this Agreement,
including the right to the Pledged Receipts but excluding the right to receive
payments under Sections 5.2(1) and (2) and Section 8.1, will be pledged and
assigned to the Trustee pursuant to the Trust Agreement concurrently with the
issuance of the 1993 Series Bonds. The Agency hereby authorizes and directs
the Company, and the Company hereby agrees to pay all Loan Payments, or cause
Loan Payments to be paid, directly to the Trustee at its corporate trust
office for the account of the Agency. Such Loan Payments shall be deposited in
the Bond Fund. Additional Payments shall be made directly to the person or
entity to whom or to which they are due.
Section 5.4 Ohligations Unconditional. The obligations of the Company to make
Loan Payments and Additional Payments, or to cause such Payments to be made,
and to perform and observe the other agreements on its part contained herein
shall be absolute and unconditional and shall not be subject to any right of
recoupment or set-off. Until such time as all conditions provided in the Trust
Agreement for its defeasance are met, the Company shall not (i) suspend or
discontinue payment of any Loan Payments or Additional Payments or (ii) fail
to perform and observe any of its other agreements contained in this Agreement
for any cause or reason including but not limited to the occurrence of any
acts or circumstances that may constitute failure of consideration,
destruction of or damage to the Project, commercial frustration of purpose,
any change in the tax or other laws or administrative rulings of or
administrative actions by or under authority of the United States of America
or of the Commonwealth of Massachusetts or any failure of the Agency to
perform and observe any agreement, whether expressed or implied.
Section 5.5 Prepayment of Loan Pavments and Additional Pavments: Other
Payments. The Company is authorized and permitted at any time it may choose,
subject to the provisions of Section 6.2, to prepay all or any part of the
Loan Payments, or any Additional Payments, without penalty or premium of any
kind and the Agency agrees that the Trustee shall accept such prepayment of
Loan Payments or of any Additional Payments. All Loan Payments or Additional
Payments so prepaid shall be credited against the Loan Payments or Additional
Payments, as the case may be, in the order in which they are payable.
The Company may also, at any time it may choose, deliver to the Trustee moneys
in addition to the Loan Payments payable on the next Loan Payment Date and in
addition to any other moneys then contained in or payable to the Bond Fund
with instructions to the Trustee to use such moneys for the purpose of
purchasing or of calling for redemption any Bond or portion thereof in
accordance with the provisions of the Trust Agreement for optional redemption
of Bonds. Any moneys so delivered to the Trustee shall be held in a separate
account in the Bond Fund and shall not operate to abate the payment of Loan
Payrnents required by this Agreement.
Section 5.6 Redemption of Bonds. The Agency, at the written request and
expense of the Company at any time, shall forthwith take all steps as may be
specified by the Company under the applicable redemption provisions of the
Trust Agreement to effect redemption of any Bond or portion thereof on the
earliest date on which such redemption may be made under such applicable
provisions.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 Affirmative Covenants. Until performance of all obligations of the
Company hereunder and until no Bond shall be Outstanding under the Trust
Agreement, the Company will:
6.1.1. Tax Exempt Status of Bond lnterest. Take, or require to be taken,
such action as may be reasonably within its ability and as may, from time to
time, be required under applicable law or regulations to continue to exclude
interest on the 1993 Series Bonds from gross income for federal income tax
purposes and exempt interest on the 1993 Series Bonds from Massachusetts
income taxation, including, without limitation, the preparation and filing of
any statements required to be filed by it in order to maintain such tax-exempt
status.
6.1.2 Indemnitv Against Fees. Indemnify the Agency, the Trustee and any
Paying Agent and each of them against and hold them and each of them harmless
from any claim by any person for a commission or fee in connection with this
Agreement, the Bond Purchase Agreement, the Inducement Letter or the purchase
of the 1993 Series Bonds by the Purchasers.
Section 6.2 Negative Covenant as to Tax Exempt Status of Bond Interest. Until
performance of all obligations of the Company hereunder and until no 1993
Series Bond shall be Outstanding under the Trust Agreement the Company will
not take, or permit to be taken on its behalf, any action which would
adversely affect the exclusion of interest from gross income for federal
income tax purposes and the exemption from Massachusetts income taxation of
the interest paid on the 1993 Series Bonds.
Section 6.3 Tax Compliance Certificate. The Company covenants that it will
comply fully with its representations, warranties and covenants set forth and
contained in the Tax Compliance Certificate.
ARTICLE VII
DEFAULT PROVISIONS AND REMEDIES OF THE AGENCY AND TRUSTEE
Section 7.1 Defaults: Events of Default. If any of the following events occur,
it is hereby defined as and declared to be and to constitute an "event of
default" hereunder:
(1) Failure to make any Loan Payment when the same is due hereunder;
(2) Any default under the Bond Purchase Agreement or the Inducement
Letter;
(3) Failure by the Company to perform or observe any other covenant,
agreement or condition on its part contained in this Agreement other than as
referred to in paragraph (1) of this Section 7.1, which failure shall have
continued for a period of ninety (90) days after written notice given by the
Trustee to the Company specifying the failure and requiring the same to be
remedied; or
(4) The Company shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or a court or
governmental agency of competent jurisdiction shall enter an order, judgment
or decree appointing, without the consent of the Company, a receiver or
trustee of the Company or of the whole or any substantial part of its
property, or approving a petition filed against it seeking reorganization or
arrangement of the Company under the federal bankruptcy laws or any other
applicable law, and such order, judgment or decree shall not be vacated or set
aside or stayed within 60 days from the date of entry thereof; or the Company
shall take any corporate action to authorize any of the actions set forth
above in this subsection; or
(5) A default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by the Company
(other than this Agreement), whether such indebtedness now exists or shall
hereafter be created, which default shall constitute a failure to pay in
excess of $2,000,000 of the principal or interest of such indebtedness when
due and payable after the expiration of any applicable grace period with
respect thereto or shall have resulted in such indebtedness in an amount in
excess of $2,000,000 becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled within a period of 90 days after the date on which
it was declared to be due and payable.
Section 7.2 Remedies on Default. Whenever any event of default under Section
7.1 of this Agreement shall have happened, and shall be continuing, any one or
more of the following remedies may be exercised, none being exclusive of any
other, provided that in no event shall the Agency be obligated to take any
step which in its opinion will or might cause it to expend time or money or
otherwise incur liability unless and until an indemnity bond satisfactory to
the Agency has been furnished to it:
(1) The Agency may with the prior written consent, and shall at the written
request, of the Trustee, or the Trustee as the assignee of the Agency may, if
acceleration is declared pursuant to Section 7.2 of the Trust Agreement,
declare all Loan Payments payable hereunder for the remainder of the term of
this Agreement and applicable to the payment of unpaid principal of and
interest accrued on the Bonds to be immediately due and payable, whereupon the
same shall become immediately due and payable;
(2) The Agency and the Trustee may have access to and inspect, examine
and make copies of the books and records and any and all accounts, data and
income tax and other tax returns of the Company and Montaup; and
(3) The Agency may with the prior written consent, and shall at the written
request, of the Trustee, or the Trustee as the assignee of the Agency may,
take whatever action at law or in equity may appear necessary or desirable to
collect the Loan Payments and Additional Payments then due and thereafter to
become due, or to enforce performance and observance of any obligation,
agreement or covenant of the Company under this Agreement.
Any amounts collected as Loan Payments or applicable to Loan Payments pursuant
to action taken under this Section shall be paid into the Bond Fund and
applied in accordance with the provisions of the Tmst Agreement or, if the
Outstanding Bonds have been paid and discharged in accordance with the
provisions of the Trust Agreement, shall be paid as provided in Section 6.1 of
the Trust Agreement for transfers of remaining amounts in the Bond Fund.
Section 7.3 Agreement to Pay Costs of Collection. If any event of default
provided for in Section 7.1 should occur and the Agency or the Trustee should
incur any costs for the collection of the Bonds or of any payment provided for
herein or the enforcement of performance or observance of any obligation or
agreement on the part of the Company or the Agency contained in this
Agreement, the Bonds, the Trust Agreement or any other agreement related to
the Bonds, the Company agrees that it will on demand therefor reimburse the
costs so incurred to the Agency or the Trustee, as the case may be. Such
costs shall include all attorneys' reasonable fees and out-of-pocket expenses
incurred by attorneys of the Agency or the Trustee, and all costs and expenses
associated with travel on behalf of the Agency or the Trustee, which costs and
expenses are directly related to their respective efforts to collect or
enforce the Bonds as aforesaid, or any of their respective rights, remedies,
powers, privileges or discretions against or in respect of the Company or
the Agency (whether or not suit is instituted in connection with any of the
foregoing).
Section 7.4 Waiver. No event of default hereunder shall be deemed to have
occurred if such event of default is waived pursuant to the provisions of
Sections 7.2 or 7.8 of the Trust Agreement. Such waiver shall be limited to
the particular event of default so waived and shall not be deemed to waive any
other event of default hereunder.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Indemnification. The Company shall indemnify and save harmless the
Agency, the Trustee and any Paying Agent and their respective directors,
officers, officials, employees and agents against and from (a) any and all
claims by or on behalf of any person arising out of (i) any condition of the
Project, or (ii) the construction, reconstruction, improvement, use,
occupancy, conduct or management of or any work or anything whatsoever done or
omitted to be done in or about the Project, or (iii) any accident, injury
or damage to any person occurring in or about the Project, or (iv) any breach
or default by the Company of or in any of its obligations hereunder, under the
Trust Agreement, the Bond Purchase Agreement or the Inducement Letter, or (v)
any act or omission of the Company or Montaup or any of their agents,
contractors, servants, employees, or licensees, or (vi) the offering,
issuance, sale or resale of the 1993 Series Bonds, but only to the extent
permitted by law, and (b) any and all costs, counsel fees, expenses or
liabilities reasonably incurred in connection with any such claim or action or
proceeding brought thereon; any indemnification of the Trustee or any Paying
Agent or their respective directors, officers, officials, employees and agents
shall not he effective against any claim (1) caused by the willful dishonesty
or intentional violation of law by the party seeking indemnification or (2) in
connection with the issuance of the 1993 Series Bonds, based upon information
furnished by the Purchasers under the caption "Underwriting", or in the
statements on the cover page with respect to the initial public offering price
and terms of offering, contained in the Official Statement used in connection
with the sale of the 1993 Series Bonds and, in connection with the issuance of
any Additional Bonds, based upon information furnished by the Purchasers in
writing specifically for use in any official statement or prospectus used in
connection with the sale of such Additional Bonds. In case any action or
proceeding is brought against the Agency, the Trustee or any Paying Agent (or
any such director, officer, official, employee or agent) by reason of such
claim, the Company, upon notice from the affected party, shall resist or
defend (or cause Montaup to resist or defend) such action or proceeding,
including the employment of counsel and the payment of all expenses in
connection with such defense, and shall have the right to negotiate and
consent to settlement. Any indemnified party shall have the right to employ
separate counsel in any such action against it and to participate in the
defense thereof, but the fees and expenses of such counsel incurred after the
Company or Montaup has assumed the defense of such action shall be at the
expense of such indemnified party unless the employment of such counsel and
the assumption by the Company or Montaup of the fees and expenses thereof
shall have been specifically authorized in writing by the Company. The Company
shall not be liable for any settlement of any such action effected without its
consent; but if any such action is settled with the consent of the Company or
if there be a final judgment for the plaintiff in any such action (of which
the Company shall have been notified), the Company shall indemnify and hold
harmless each indemnified party from and against any losses, costs, claims,
damages, actions, liabilities or expenses incurred or suffered by reason of
such settlement or judgment. Subject to the foregoing, the Agency, the Trustee
and any Paying Agent shall cooperate and join with the Company, at the expense
of the Company, as may be required in connection with any action taken or
defended by the Company.
Section 8.2 Limitations on Liahility of the Agency. the Trustee and any Paying
Agent. The Agency, the Trustee and any Paying Agent, and their respective
directors, officers, officials, employees and agents, shall be entitled to the
advice of counsel (who may also be counsel for the Company or any Bondholder)
and shall be wholly protected as to action taken or omitted to be taken in
good faith in reliance on such advice. They may rely conclusively on any
communication or other document furnished to them hereunder or under the Trust
Agreement, the Bond Purchase Agreement or the Inducement Letter and reasonably
believed by them to be genuine. They shall not be liable for any action (a)
taken by them in good faith and reasonably believed by them to be within the
discretion or powers conferred upon them, or (b) in good faith omitted to be
taken by them because reasonably believed to be beyond the discretion or
powers conferred upon them, or (c) taken by them pursuant to any direction or
instruction by which they are governed hereby or by the Trust Agreement, the
Bond Purchase Agreement or the Inducement Letter, or (d) omitted to be
taken by them by reason of the lack of any direction or instuction required
for such action hereby or by the Trust Agreement, the Bond Purchase Agreement
or the Inducement Letter; nor shall they be responsible for the consequences
of any error of judgment reasonably made by them. The Agency, the Trustee and
any Paying Agent shall in no event be liable for the application or
misapplication of funds, or for other acts or defaults, by any person, except
their own directors, officers, officials or employees. When any consent or
other action by them is called for hereby or by the Trust Agreement, they may
defer such action pending such investigation or inquiry or receipt of such
evidence (if any) as they may require in support thereof They shall not be
required to take any remedial action (other than the giving of notice) unless
indemnity reasonably satisfactory to them is furnished for any expense or
liability to be incurred thereby. They shall be entitled to reimbursement from
the Company for expenses reasonably incurred or advances reasonably made, with
interest, in the exercise of their rights or the performance of their
obligations hereunder or under the Trust Agreement, the Bond Purchase
Agreement, or the Inducement Letter, to the extent that they act without
previously obtaining indemnity. No permissive right or power to act which they
may have shall be construed as a requirement to act; and no delay in the
exercise of a right or power shall affect the subsequent exercise of that
right or power. The Agency shall not be required to take notice of any breach
or default by the Company herein or in the Trust Agreement, the Bond Purchase
Agreement or the Inducement Letter, except when given notice thereof by the
Trustee. No recourse shall be had by the Company, the Purchasers, the Trustee,
any Paying Agent or any Bondholder for any claim based on this Agreement, the
Trust Agreement, the Bond Purchase Agreement, the Inducement Letter or the
Bonds against any director, officer, official, employee or agent of the Agency
alleging personal liability on the part of such person unless such claim is
based upon the willful dishonesty or intentional violation of law by such
person.
Section 8.3 Avoidance of Arbitrage. The Company agrees to restrict the use of
the proceeds of the 1993 Series Bonds in such manner and to such extent as
necessary to assure that the 1993 Series Bonds will not constitute arbitrage
bonds under Section 148 of the Code. Any officer of the Agency having
responsibility with respect to the issuance of the 1993 Series Bonds is
authorized and directed to give an appropriate certificate on behalf of
the Agency, for inclusion in the transcript of proceedings for the 1993 Series
Bonds, setting forth the facts, estimates and circumstances and reasonable
expectations pertaining to Section 148 of the Code. Without limiting the
generality of the foregoing, the Company covenants that it will take all
action necessary to comply with Section 148 of the Code including the payment
when due of all amounts payable to the United States thereunder, and shall
refrain from taking any action contrary to the applicable provisions of the
Code.
Section 8.4 Assignment of Agreement by the Agency. The Agency may assign all
or any part of its interest in this Agreement and pledge the Loan Payments and
all or any of the Additional Payments to the Trustee pursuant to the Trust
Agreement and not otherwise as security for payment of the principal of,
premium, if any, and interest on the Bonds.
Section 8.5 Termination. This Agreement shall terminate at any time when the
Outstanding principal amount of the Bonds has been paid and discharged in
accordance with the provisions of the Trust Agreement, or when the Trust
Agreement has been defeased pursuant to Section 6.1 thereof and sufficient
moneys are on deposit with the Trustee or the Agency, or both, to meet all
Additional Payments due or to become due through the date on which the final
payment on account of the Outstanding Principal Amount is scheduled
to be paid or, with respect to Additional Payments to become due, provisions
satisfactory to the Trustee and the Agency are made for paying such amounts as
they come due.
Section 8.6 Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when mailed by
registered or certified mail, postage prepaid, or sent by overnight courier,
addressed as follows: if to the Agency, at 75 Federal Street, Boston, MA
02110, Attn: Executive Director; if to the Company, at P.O. Box 2333, Boston,
MA 02107, Attn: Treasurer; if to the Trustee, at One Federal Street, Boston,
Massachusetts 02211, Attn: Corporate Trust Department; and if to any holder of
a Bond, at its address appearing on the list kept by the Trustee under Section
8.8 of the Trust Agreement. A duplicate copy of each notice, certificate or
other communication given hereunder by any party to any other party shall also
be given to the others. Any party may, by notice given hereunder, designate
any further or different address to which subsequent notices, certificates or
other communications shall be sent.
Section 8.6 Binding Effect. This Agreement shall inure to the benefit of and
shall be binding upon the Agency, the Company and their respective successors
and assigns, subject, however, to the specific provisions hereof, and subject
to the further limitation that any obligation of the Agency created by or
arising out of this Agreement shall not be a general obligation of the Agency
or a pledge of the faith and credit of The Commonwealth of Massachusetts but
shall be payable solely from Pledged Receipts.
Section 8.7 Severability. In the event that any provision of this Agreement
shall be held to be invalid in any circumstance, such invalidity shall not
affect any other provision or circumstances.
Section 8.8 Amendments. Changes and Modifications. Except as otherwise
provided in this Agreement or in the Trust Agreement, subsequent to the
initial issuance of the Bonds and prior to payment in full of the Bonds (or
provision for the payment thereof having been made in accordance with the
provisions of the Trust Agreement), the parties may not effectively amend,
change, modify, alter or terminate this Agreement except in accordance with
Section 9.3 of the Trust Agreement without the concurring written consent of
the Trustee and the holders of not less than a majority in aggregate principal
amount of the Outstanding Bonds.
Section 8.9 Captions: Tahle of Contents. The captions or headings in, and the
table of contents for, this Agreement are for convenience only and in no way
define, limit or describe the scope or intent of any provision of this
Agreement. A reference to any Section or subsection shall be a reference to
all provisions prior to the next comparable number.
Section 8.10 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 8.11 Governing Law. This Agreement shall be governed by the law of The
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Agency has caused this Agreement to be executed
and delivered in its name and behalf by its Executive Director, its Deputy
Director or its Vice Chairman and the Company has caused this Agreement to be
signed in its name and behalf by its authorized officer, all as of the 1st day
of July, 1993, but actually on another and secular day.
MASSACHUSETTS INDUSTRIAL FINANCE
By
Executive/Deputy/Director/Vice
Chairman
EASTERN EDISON COMPANY
By
Vice President
The undersigned hereby joins in this Agreement and agrees and consents to the
provisions of this Agreement which are applicable to it and is entitled to the
benefits hereof
SHAWMUT BANK, N.A.,
as trustee
By
Authorized Officer
EXHIBIT A
I. WASTE WATER TREATMENT SYSTEM MODIFICATIONS/ADDITIONS
A. Wastewater Treatment and Sludge Dewatering
The wastewater treatment system of Montaup (the "WWTS") was modified at
the time of the issuance of the 1983 Series Bonds to expand its capacity and
enable it to treat the additional liquid wastes resulting from coal conversion
in compliance with imposed Best Available Technology ("BAT') effluent
limitations. Precise pH control, suspended solids removal, and trace metals
removal were achieved. A system capable of continuous metals removal
resulted from adding a treatment system to the existing WWTS comprised of
a mixer, flocculater, gravity settler, and filter system. Chemical feed
control and equipment for automatic pH adjustment, sludge dewatering
equipment, and sludge storage facilities were be included in the packaged
system design. This system is located in Montaup's coal preparation building.
B. Bottom Ash Hanclling
The bottom ash handling system transports and stores the bottom ash
generated by boilers 7 and 8. Ash from these units is washed to a clinker
grinder at each boiler and onto jet pumps, which transfer ash-laden sluice
water to dewatering bins.
Two dewatering bins receive the sluice water. Heavier ash particles settle in
the dewatering bins. The overflow of the dewatering bin flows by gravity to
a clarifier, which in turn discharges to a surge tank for subsequent reuse.
The dewatered ash is discharged by gravity to a truck positioned below the bin
and transported offsite for disposal. Ash carried over to the clarifier and
surge tank is flushed to the center of their conical bottoms where it is
pumped via sludge pumps back to the dewatering bins.
To control ash sluicewater spills and losses during truck loading, concrete
sumps are located beneath each dewatering bin, and the collected drainage
is returned to the surge tank. The surge tank supplies sluicewater to the
bottom ash handling system, with additional makeup obtained from the
existing station service water system, supplied by the Coles River, as needed.
C. Coal Pile Runoff Collection and Storage System
The coal pile runoff collection and storage facilities are sized to collect
and contain all of the incident precipitation from the 10-year, 24-hour
rainfall storm event. A coal pile liner prevents coal pile drainage from
leaching into sub-surface soils and flowing to the river. The coal pile liner
is constructed of a 4-inch thick layer of hydraulic asphaltic concrete
pavement which completely seals the base of the coal pile. To assure that
liner integrity is maintained, the liner is installed on a 6-inch thick bed of
dense, graded, crushed stone.
Runoff flows by gravity to a concrete collection sump and is pumped to the
collection pond.
The coal pile runoff pond is an asphalt-lined earthen basin. The depth allows
for storage of over 85,000 cu ft of runoff and a solids accumulation of 1.5
ft. Coal pile runoff is stored in the runoff pond and discharged at a
controlled rate by gravity to the waste treatment plant.
D. Building Alterations and Demolition
The additions to the wastewater treatment system are housed in the original
coal preparation plant building. The building was altered in order to
accommodate the new wastewater treatment system components. Alterations
consisted of the following: removal of existing building contents
(pulverizers, tanks, motors, piping, etc.); flood proofing; regrading floor
slab; and the addition of heating and lighting.
The construction of the bottom ash handling system required the demolition
and relocation of the hydrogen storage shed and the demolition of Warehouse
No. 1 in order to provide sufficient space for the hydrobins, clarifier, and
surge tank.
II. BOILER PARTICULATE EMISSIONS CONTROL SYSTEM
Electrostatic Precipitators
The two new precipitators (one per boiler) financed with the proceeds of the
1983 Series Bonds are located in the roadway behind boiler 7 and immediately
to the north of boiler 8. The design conditions for the precipitators are
945,000 Ib/hr of flue gas at 350 degrees F for boiler 7 and 1,500,000 Ib/hr
of flue gas at 355 degrees F for boiler 8 when burning coal with an anticipated
maximum cash content of 12 percent (80 percent of which is considered to be
flying ash) and minimum fuel heating value of 12,500 Btu/lb.
Each boiler's precipitator installation includes a redundant electrical field,
hopper heaters, hopper aeration system and weather enclosure around the
hoppers.
The electrostatic precipitators are guaranteed to control boiler emissions to
0.08 lb particulate matter per million Btus input to the boiler.
B. Ductwork
The ductwork on boilers 7 and 8 was modified as required to accommodate
the new electrostatic precipitators. Additional ductwork was added from the
outlets of the air preheaters to the inlet of the electrostatic precipitators
and from the outlets of the electrostatic precipitators to the existing
ductwork at the mechanical collector outlets/draft fan inlets.
C. Fly Ash Handling System
The fly ash handling system was extended to handle the additional precipitator
hoppers and additional flue gas duct hoppers. The existing control panel was
modified to accommodate the additional ash valves. Hoppers associated with
the mechanical dust collectors were disconnected from the system. The
existing mechanical vacuum producers were refurbished and later replaced to
ensure reliable operation and design capacity performance.
A precipitator hopper aeration system was provided with each precipitator to
aid in ash removal. This system includes a low pressure blower, heat, pipe
and aeration pads mounted in the base of the precipitator hoppers.
The fly ash handling system was upgraded by the addition of new multibag
baghouses, one per fly ash train, to replace the existing single bag units.
III. COAL HANDLING EMISSIONS CONTROL SYSTEM
A. Dust Suppression System (Excluding Coal Pile Wetting)
A dust collection system was added to the coal handling system. The traveling
coal unloading tower was equipped with a spray ring in the hopper, which is
activated by the bucket release and timed to minimize the escape of coal dust.
The coal is sprayed at the feeder under the hopper and then again just at the
discharge onto conveyor A. The coal to be stacked out on the stacker
conveyor is sprayed upon leaving the sample house. The coal is also sprayed
at the discharge of the reclaim hoppers and at the entrance and discharge of
the Bradford breaker before going to the tripper gallery and bunkers.
IV. BURNERS AND RELATED CONTROLS SYSTEMS
A. & B. Oil Burners, Steam Atomizers, and Spark Ignitors
Twelve steam atomized burner assemblies were installed in each Boiler 7 and
Boiler 8. The burners are suitable for boiler warm-up and coal flame light
off. Each burner unit is complete with steam atomized oil gun, high energy
spark ignitor, ignitor retract cylinder, power pack and wiring harness,
stationary union, flexible fuel oil and atomizing steam supplies, and mounting
plate.
C. & D. Oxygen Trim Controls and Draft System Controls
A new combustion control system was added to each of boilers No. 7 and 8.
The system includes oxygen trim and draft system controls.
A new oxygen analyzer was added and the existing manually operated air
dampers were converted to automatic pneumatically controlled damper. The
oxygen analyzer supplies a signal to the new draft system controls which
automatically adjusts the air register damper to provide the proper air/fuel
mixture. An air conditioned room houses these instruments and controls.
V. ENVIRONMENTAL MONITORING
A. Continuous Emissions, Ambient Air Quality, and Meteorological Monitoring
Systems
The KVB Inc. Continuous Emission Monitoring System monitors SO2 and O2
emissions from Boiler 7 and Boiler 8. The sample flue gas is filtered,
transported to the analyzer cabinet by heat-traced lines, cooled, dried, and
delivered to an ultraviolet photometer for SO, analysis. The output is
converted to pounds of sulfur per million BTU and recorded by strip chart
recorders.
VI. COAL SPILL APRON
A coal spill apron was added to coal unloading tower No. 2 to prevent coal
from being dropped into the river during unloading. The apron is
approximately 15 feet long by 24 feet wide and is fabricated out of 3/8 inch
thick steel with stiffness.