March 20, 1996
IRREVOCABLE STANDBY LETTER OF CREDIT NO. S002/82875/96
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State Street Bank and Trust Company,
as Trustee
Two International Place, 4th Floor
Boston, MA 02110
Attn: Corporate Trust Department
Dear Sirs:
At the request and on the instructions of our customer Energy Networks,
Inc. (the Company ), we hereby establish this Irrevocable Standby Letter
of Credit (this Letter of Credit ) in your favor, as Trustee under the
Indenture of Trust, dated as of December 1, 1986, as amended and
supplemented by the First Supplemental Indenture, dated as March 1, 1988 (as
so amended and supplemented, the Indenture ), between the Connecticut
Development Authority (the Authority ) and you, pursuant to which Sixteen
Million Three Hundred Thousand Dollars ($16,300,000) in aggregate principal
amount of the Authority s Industrial Revenue Variable Rate Demand Bonds
(Capitol District Energy Center Project - 1986 Series) and the Authority s
Industrial Revenue Variable Rate Demand Bonds (Capitol District Energy
Center Project - 1988 Series) (collectively, the Bonds ) have been issued.
Upon the terms and conditions hereinafter set forth, this Letter of Credit
authorizes you to draw on us an amount not exceeding Twelve Million Four-
hundred Thirty-one Thousand Five-hundred and Seven Dollars ($12,431,507)
(hereinafter, as reduced or reinstated from time to time in accordance with
the provisions hereof, the Stated Amount ), of which an amount not
exceeding Twelve Million One Hundred Thousand Dollars ($12,100,000) (as
reduced or reinstated from time to time in accordance with the terms hereof,
the Principal Component ) may be drawn with respect to payment of the
unpaid principal amount of, or the portion of the Purchase Price
corresponding to principal of, the Bonds, and of which an amount not
exceeding Three Hundred Thirty-One Thousand Five Hundred and Seven Dollars
($331,507) (as reduced or reinstated from time to time in accordance with
the terms hereof, the Interest Component ) may be drawn with respect to
payment of interest accrued on, or the portion of the Purchase Price
corresponding to interest accrued on, the Bonds on or prior to their stated
maturity date. This Letter of Credit shall be effective immediately and
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shall expire (unless otherwise terminated or extended in accordance with the
provisions hereof) on the earlier to occur of (i) the making by you of the
final drawing available to be made hereunder, (ii) our receipt of a
certificate signed by an Authorized Officer stating that: (a) the
conditions precedent to the acceptance of an Alternative Credit Facility
have been satisfied, (b) the Trustee has accepted an Alternative Credit
Facility and (c) on the effective date of such Alternative Credit Facility,
and after receipt by The Bank of Nova Scotia of this certificate,
Irrevocable Standby Letter of Credit No. S0021/82875/96 shall terminate ;
(iii) our receipt of a certificate signed by an Authorized Officer stating
that no Bonds remain Outstanding; (iv) fifteen (15) days after the
Conversion Date; or (v) October 16, 1996, (the Expiry Date ); provided,
that on the Business Day immediately preceding the Expiry Date, such Expiry
Date shall be automatically extended to the next anniversary of such Expiry
Date (or, in the event such anniversary date is not a Business Day, the
Business Day immediately preceding such anniversary date) unless the Bank
notifies the Trustee in writing not less than one hundred eighty (180) days
prior to such Expiry Date of the Bank s intention not to extend such Expiry
Date.
Subject to the terms and conditions hereof, funds will be made
available to you under this Letter of Credit against receipt by us of the
following items by the time required below: (i) your sight draft or drafts
drawn on The Bank of Nova Scotia, Boston, Massachusetts; and (ii)(a) if the
drawing is being made with respect to payment of the portion of the Purchase
Price corresponding to principal of the Bonds (an A Drawing ), receipt by
us of your written certificate in the form of Exhibit A attached hereto
appropriately completed and signed by an Authorized Officer, (b) if the
drawing is being made with respect to principal of the Bonds other than as a
portion of the Purchase Price of the Bonds (a B Drawing ), receipt by us of
your written certificate in the form of Exhibit B attached hereto
appropriately completed and signed by an Authorized Officer, and (c) if the
drawing is being made with respect to the payment of interest, or the
portion of Purchase Price corresponding to interest, on the Bonds (a C
Drawing ), receipt by us of your written certificate in the form of Exhibit
C attached hereto appropriately completed and signed by an Authorized
Officer. Presentation of such draft(s) and such certificate(s) shall be
made in person or by tested telex at our office located at 101 Federal
Street, Boston, Massachusetts.
If a drawing is made by you hereunder (i) after 11:00 a.m., Boston
time, but at or prior to 1:00 p.m., Boston time, on a Business Day, payment
out of our own funds shall be made to you or your designee of the amount
specified, in immediately available funds, not later than 10:00 a.m., Boston
time, on the next Business Day or (ii) after 1:00 p.m. Boston time, on a
Business Day but at or prior to 11:00 a.m. Boston time, on the next Business
Day, payment out of our own funds shall be made to you of the amount
specified, in immediately available funds, not later than 3:00 p.m., Boston
time, on such next Business Day; provided, however, that payment shall not
be made to you or your designee unless the drawing and the documents and
other items presented in connection therewith conform to the terms and
conditions hereof. If a demand for payment made by you hereunder does not,
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in any instance, conform to the terms and conditions of this Letter of
Credit, we shall give you prompt notice that the demand for payment was not
effected in accordance with the terms and conditions of this Letter of
Credit, stating the reasons therefor and that we will upon your instructions
hold any documents at your disposal or return the same to you. Upon being
notified that the demand for payment was not effected in conformity with
this Letter of Credit, you may attempt to correct any such non-conforming
demand for payment to the extent that you are entitled to do so.
Demands for payment hereunder honored by us shall not, in the
aggregate, exceed the Stated Amount, as the Stated Amount may be reduced or
reinstated in accordance with the terms hereof. Demands for payment
hereunder honored by us with respect to A Drawings and B Drawings shall not,
in the aggregate, exceed the Principal Component, as the principal component
may be reduced or reinstated in accordance with the terms hereof. Demands
for payment hereunder honored by us with respect to C Drawings shall not, in
the aggregate, exceed the Interest Component, as the Interest Component may
be reduced or reinstated in accordance with the terms hereof.
Each A Drawing and each B Drawing honored by us hereunder shall reduce
the Principal Component by an amount equal to the amount of such drawing.
Each C Drawing honored by us hereunder shall reduce the Interest Component
by an amount equal to the amount of such drawing. Without duplication for
any reductions made pursuant to the immediately preceding two sentences,
upon the payment or redemption (or deemed payment or redemption) of any
Bonds, the Principal Component shall be reduced by the principal amount of
the Bonds so paid or redeemed (or deemed paid or redeemed) and the Interest
Component shall be reduced by an amount equal to interest on the principal
amount of the Bonds so paid or redeemed (or deemed paid or redeemed) for
fifty (50) days (computed at the rate of twenty percent (20%) per annum and
on the basis of a three hundred sixty-five (365) day or three hundred sixty-
six (366) day year, as applicable). Any reduction in the Principal
Component or the Interest Component pursuant to the immediately preceding
three sentences shall result in a corresponding reduction in the Stated
Amount.
Upon delivery by us to the Tender Agent, and release by us our security
interest in, any Pledged Bonds in accordance with the terms of the Pledge
Agreement, the Principal Component shall be reinstated automatically by an
amount equal to the principal amount of such Pledged Bonds. In addition,
(i) if you shall not have received within ten (10) Business Days after our
honoring of any C Drawing (other than a C Drawing in respect of interest due
on the principal amount of any payment or redemption of the Bonds), notice
from us that an Event of Default has occurred and is continuing under the
Letter of Credit and Reimbursement Agreement, dated as of October 14, 1994
(as amended or supplemented from time to time, the Letter of Credit
Agreement ), between the Company and us, the Interest Component shall be
reinstated automatically, as of the close of business on such tenth Business
Day (unless the Interest Component previously has been reinstated with
respect to such C Drawing), by the amount of such C Drawing and (ii) upon
the release by us of any Pledged Bonds, the Interest Component shall be
reinstated automatically by the amount of the C Drawing made to pay the
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portion of the Purchase Price corresponding to interest on such Pledged
Bonds (unless the Interest Component previously has been reinstated with
respect to such C Drawing); provided, however, that in no event shall the
Interest Component be reinstated to an amount in excess of fifty (50) days
interest (computed at the rate of twenty percent (20%) per annum and on the
basis of a three hundred sixty-five (365) day or three hundred sixty-six
(366) day year, as applicable, notwithstanding the actual rate borne from
time to time by the Bonds) on the aggregate principal amount of the Bonds
Outstanding at the time of any such reinstatement.
Only you or your successor as Trustee may make a drawing under this
Letter of Credit. Upon the payment to you or to your account of the amount
demanded hereunder, we shall be fully discharged of our obligation under
this Letter of Credit with respect to such demand for payment and we shall
not thereafter be obligated to make any further payments under this Letter
of Credit in respect of such demand for payment to you or any other person
who may have made to you or makes to you a demand for payment of the
principal of, the Purchase Price of, or the interest on, any Bond. By
paying to you an amount demanded in accordance herewith, we make no
representation as to the correctness of the amount demanded.
No drawing will be honored hereunder with respect to any interest that
may accrue on the Bonds, or any principal or premium which may be payable
with respect to the Bonds, after the date of termination or expiration of
this Letter of Credit.
Communications with respect to this Letter of Credit shall be in
writing, be addressed to us at 101 Federal Street, Boston, Massachusetts,
02208, Attention: Mr. Stephen M. Johnson, and shall specifically refer to
this Letter of Credit by number.
This Letter of Credit may not be transferred or assigned, either in
whole or in part except to a successor trustee properly appointed and
qualified pursuant to the Indenture. We agree to issue a substitute letter
of credit to any such successor trustee (and to successively replace any
such substitute letter of credit) upon the return to us for cancellation of
the original of this Letter of Credit accompanied by a request which (i)
shall be in the form of Exhibit D attached hereto with the blanks
appropriately completed, (ii) shall be signed by an Authorized Officer,
(iii) shall refer to this Letter of Credit and (iv) shall state the name and
address of the successor trustee. Each substitute letter of credit will be
in substantially the form of this Letter of Credit except for the date and
letter of credit number.
As used herein the term "Authorized-Officer" shall mean any officer in
your Corporate Trust Department at 2 International Place, Boston,
Massachusetts. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
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(including without limitation, the Bonds), except only the certificate(s)
referred to herein, and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificate(s).
This Letter of Credit is subject to the Uniform Customs and Practice
for Documentary Credits, 1993 Revision, ICC Publication No. 500 (the
"Uniform Customs"). This Letter of Credit shall be deemed to be a contract
made under the laws of The Commonwealth of Massachusetts and shall, as to
matters not governed by the Uniform Customs, be governed by and construed in
accordance with the internal laws of said Commonwealth.
Very truly yours,
THE BANK OF NOVA SCOTIA
By: _____________________________
T.M. Pitcher
Title: Vice President
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By: _____________________________
G.A. Yong
Title: Sr. Assistant Manager
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EXHIBIT A
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CERTIFICATE FOR A DRAWING
[Date]
The Bank of Nova Scotia
101 Federal Street
Boston, MA 02208
Attention: [ ]
Re: Irrevocable Letter of Credit No.[ ]
--------------------------------------------
Gentlemen:
The undersigned, a duly Authorized Officer of State Street Bank and
Trust Company (The "Trustee"), hereby certifies to The Bank of Nova Scotia
(the "Bank") that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The principal amount of the Bonds Outstanding (as defined in
the Indenture) on the date of this Certificate (before giving
effect to the payments contemplated hereby) is $___________.
(3) The Trustee is making a drawing under the above-referenced
Letter of Credit in the amount of $__________ with respect to
the payment of the portion of the Purchase Price of the Bonds
corresponding to the principal amount thereof, which Bonds
are required to be [or were required to be] purchased [by the
Tender Agent] [by the Paying Agent] pursuant to the
Indenture.
(4) The amount demanded hereby does not exceed the amount
available on the date hereof to be drawn (after giving effect
to any contemporaneous drawings) under the above-referenced
Letter of Credit in respect of the Principal Component or the
Stated Amount. The amount demanded hereby was computed in
accordance with the terms and conditions of the Bonds.
(5) The amount demanded hereby does not include any amount in
respect of the purchase of any Pledged Bonds or any Bonds
held by Energy Networks, Inc.
(6) Upon receipt by the undersigned of the amount demanded
hereby, (i) the undersigned will apply the same directly to
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the payment when due of the principal amount owing on account
of the purchase of Bonds pursuant to the Indenture [or
reimbursement of the Tender Agent for amounts advanced by it
with respect to such payment, which amounts the Tender Agent
has certified it has not been reimbursed for], (ii) no
portion of said amount shall be applied by the undersigned
for any other purpose and (iii) no portion of said amount
shall be commingled with other funds held by the undersigned.
(7) The Letter of Credit has not been terminated prior to the
time of delivery of this Certificate. The drawing demanded
hereby is authorized by the Indenture and the Bonds, and all
conditions to the drawing demanded hereby under the Indenture
and the Bonds have been satisfied.
As used herein the terms "Authorized Officer", "Bonds", "Indenture",
"Pledged Bonds", "Principal Component", "Purchase Price" and "Stated Amount"
shall have the respective meanings assigned to such terms in the above-
referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ___ day of ___, 19_.
_____________________________,
as Trustee
By___________________________
Title:
EXHIBIT B
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CERTIFICATE FOR B DRAWING
March 15, 1996
The Bank of Nova Scotia
101 Federal Street
Boston, MA 02208
Attention:
Re: Irrevocable Letter of Credit No.
---------------------------------------------
Gentlemen:
The undersigned, a duly Authorized Officer of State Street Bank and
Trust Company (The "Trustee"), hereby certifies to The Bank of Nova Scotia
(the "Bank") that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The principal amount of the Bonds Outstanding (as defined in
the Indenture) on the date of this Certificate (before giving
effect to the payments contemplated hereby) is $___________.
(3) The Trustee is making a drawing under the above-referenced
Letter of Credit in the amount of $__________ with respect to
the payment of principal of the Bonds, which amount has, or
will, within five (5) business days, become due and payable
pursuant to the Indenture, upon stated maturity or as a
result of acceleration or redemption of the Bonds.
(4) The amount demanded hereby does not include any amount in
respect of the principal amount of any Pledged Bonds or any
Bonds held by Energy Networks, Inc.
(5) The amount demanded hereby does not exceed the amount
available on the date hereof to be drawn (after giving effect
to any contemporaneous drawings) under the above-referenced
Letter of Credit in respect of the Principal Component or the
Stated Amount. The amount demanded hereby was computed in
accordance with the terms and conditions of the Bonds.
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(6) Upon receipt by the undersigned of the amount demanded hereby
(i) the undersigned will apply the same directly to the
payment when due of the principal amount owing on account of
the Bonds pursuant to the Indenture, (ii) no portion of said
amount shall be applied by the undersigned for any other
purpose and (iii) no portion of said amount shall be
commingled with other funds held by the undersigned.
(7) The Letter of Credit has not been terminated prior to the
time of delivery of this Certificate. The drawing demanded
hereby is authorized by the Indenture and the Bonds, and all
conditions to the drawing demanded hereby under the Indenture
and the Bonds have been satisfied.
As used herein, the terms "Authorized Officer", "Bonds", "Indenture",
"Business Day", "Pledged Bonds", "Principal Component", and "Stated Amount"
shall have the respective meanings assigned to such terms in the above-
referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ___ day of ___, 19_.
_____________________________,
as Trustee
By___________________________
Title:
EXHIBIT C
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CERTIFICATE FOR C DRAWING
March 15, 1996
The Bank of Nova Scotia
101 Federal Street
Boston, MA 02208
Attention:
Re: Irrevocable Letter of Credit No.
-------------------------------------------
Gentlemen:
The undersigned, a duly Authorized Officer of State Street Bank and
Trust Company (The "Trustee"), hereby certifies to The Bank of Nova Scotia
(the "Bank") that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The principal amount of the Bonds Outstanding(as defined in
the Indenture) on the date of this Certificate is
$________________.
(3) The Trustee is making a drawing under the above-referenced
Letter of Credit in the amount of $___________ with respect
to the payment of [the portion of the Purchase Price of
$__________ in principal amount of the Bonds corresponding to
the accrued interest thereon, which Bonds are required to be
[or were required to be] purchased [by the Tender Agent] [by
the Paying Agent] pursuant to the Indenture] [accrued
interest on the Bonds which amount has, or will, within five
(5) Business Days, become due and payable pursuant to the
Indenture].
(4) The amount demanded hereby does not exceed the amount
available on the date hereof to be drawn (after giving effect
to any contemporaneous drawing) under the above-referenced
Letter of Credit in respect of the Interest Component or the
Stated Amount. The amount demanded hereby was computed in
accordance with the terms and conditions of the Bonds.
(5) The amount demanded hereby does not include any amount in
respect of the interest on any Pledged Bonds or any Bonds
held by Energy Networks, Inc.
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(6) Upon receipt by the undersigned of the amount demanded
hereby, (i) the undersigned will apply the same directly to
the payment when due of the [portion of the Purchase Price of
Bonds corresponding to accrued interest thereon pursuant to
the Indenture] [interest owing on account of the Bonds
pursuant to the Indenture], (ii) no portion of said amount
shall be applied by the undersigned for any other purpose and
(iii) no portion of said amount shall be commingled with
other funds held by the undersigned.
(7) The Letter of Credit has not been terminated prior to the
time of delivery of this Certificate. The drawing demanded
hereby is authorized by the Indenture and the Bonds, and all
conditions to the drawing demanded hereby under the Indenture
and the Bonds have been satisfied.
As used herein, the terms "Authorized Officer", "Bonds", "Business
Day", "Indenture", Interest Component", "Pledged Bonds", "Purchase Price",
and "Stated Amount" shall have the respective meanings assigned to such
terms in the above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ___ day of ___, 19_.
_____________________________,
as Trustee
By___________________________
Title:
EXHIBIT D
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INSTRUCTION TO ISSUE SUBSTITUTE LETTER OF CREDIT
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March 15, 1996
The Bank of Nova Scotia
101 Federal Street
Boston, MA 02208
Attention:
Re: Irrevocable Letter of Credit No.
--------------------------------------------
Gentlemen:
Reference is made to (i) the above-referenced letter of credit (the
"Old Letter of Credit" and (ii) the Indenture of Trust, dated as of December
1, 1986, as amended and supplemented by the First Supplemental Indenture,
dated as of March 1, 1988 (as so amended and supplemented, the "Indenture"),
from the Connecticut Development Authority to us.
[Name and address of successor trustee] (the "Successor Trustee") has
been appointed successor trustee under the Indenture. You are hereby
requested to issue in accordance with the terms of the Old Letter of Credit,
a new letter of credit to the Successor Trustee having the same terms and
providing for the same Stated Amount (as defined in the Old Letter of
Credit) as the Old Letter of Credit.
We submit herewith for cancellation the original of the Old Letter of
Credit.
The individual signing below on our behalf hereby represents that he or
she is duly authorized to so sign on our behalf.
_____________________________,
as Trustee
By___________________________
Title:_______________________