EXHIBIT 10(gg)
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Connecticut Development Authority
and
Bridgeport Hydraulic Company
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LOAN AGREEMENT
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Dated as of November 1, 1993
Connecticut Development Authority
$7,700,000 Water Facilities Refunding Revenue Bonds
(Bridgeport Hydraulic Company Project - 1993C Series)
$10,000,000 Water Facilities Refunding Revenue Bonds
(Bridgeport Hydraulic Company Project - 1994A Series)
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 4
Section 1.2. Interpretation....................... 13
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... 15
Section 2.2. Representations by the Borrower...... 16
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 20
Section 3.2. Other Amounts Payable................ 21
Section 3.3. Manner of Payment.................... 21
Section 3.4. Obligation Unconditional............. 21
Section 3.5. Security Clauses..................... 22
Section 3.6. Issuance of Initial Bonds............ 22
Section 3.7. No Additional Bonds.................. 22
Section 3.8. Effective Date and Term.............. 22
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 23
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 25
Section 4.3. Taxes................................ 25
Section 4.4. Insurance............................ 25
Section 4.5. Compliance with Law.................. 27
Section 4.6. Maintenance and Repair............... 27
Section 4.7. Disposition of Project Realty by
Borrower............................. 27
Section 4.8. Leasing of the Project Realty and the
Project Equipment.................... 28
Section 4.9. Project Equipment................... 28
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 29
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 29
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 29
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ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 31
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 31
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 34
Section 6.4. Further Assurances and Corrective
Instruments.......................... 35
Section 6.5. Covenant by Borrower as to Compliance
with Indenture....................... 35
Section 6.6. Assignment of Agreement or Note..... 36
Section 6.7. Inspection........................... 36
Section 6.8. Default Notification................. 36
Section 6.9. Covenant Against Discrimination...... 36
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 37
Section 7.2. Remedies on Default.................. 38
Section 7.3. No Duty to Mitigate Damages.......... 39
Section 7.4. Remedies Cumulative.................. 39
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 40
Section 8.2. Notice and Sources of Prepayment..... 42
Section 8.3. Mandatory Prepayment on Taxability... 43
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 44
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 44
Section 9.3. Force Majeure........................ 44
Section 9.4. Amendments........................... 45
Section 9.5. Notices.............................. 45
Section 9.6. Prior Agreements Superseded.......... 45
Section 9.7. Execution of Counterparts............ 46
Section 9.8. MBIA Requirements.................... 46
APPENDICES
A - Promissory Note
B - Description of Project Realty
C - Description of Project Equipment
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Connecticut Development Authority
Bridgeport Hydraulic Company
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of November 1, 1993
by and between the Connecticut Development Authority, a body
corporate and politic constituting a public instrumentality and
political subdivision of the State of Connecticut, and
Bridgeport Hydraulic Company, a corporation organized and
existing under the laws of the State of Connecticut,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut
General Statutes, Sections 32-la through 32-23ss, as amended
(the "Act"), declares that there is a continuing need in the
State (1) for industrial development and activity to provide
and maintain employment and tax revenues and to control, abate
and prevent pollution to protect the public health and safety,
(2) for the development of recreation facilities to promote
tourism, provide and maintain employment and tax revenues, and
promote the public welfare, (3) for the development of
commercial and retail sales and service facilities in urban
areas to provide and maintain construction and permanent
employment and tax revenues, to improve conditions of
deteriorated physical development, slow economic growth and
eroded financial health of the public and private sectors in
urban areas and to revitalize the economy of urban areas, and
(4) for assistance to public service businesses providing
transportation and utility services in the State, and that the
availability of financial assistance and suitable facilities
are important inducements to industrial and commercial
enterprises to remain or locate in the State and to provide
industrial, recreation, urban and public service projects; and
WHEREAS, the Act provides that (1) the term "project" as
used therein means any facility, plant, works, system,
building, structure, utility, fixture or other real property
improvement located in the State, and the land on which it is
located or which is reasonably necessary in connection
therewith, which is of a nature or which is to be used or
occupied by any person for purposes which would constitute it
as an industrial project, recreation project, urban project,
public service project or health care project, and any real
property improvement reasonably related thereto, and (2) that a
project may also include or consist exclusively of machinery,
equipment or fixtures; and
WHEREAS, the Act provides that the Authority shall have
power (i) to determine the location and character of, and to
extend credit or make loans to any person for the planning,
designing, acquiring, improving and equipping of, a project,
which may be secured by loan, lease or sale agreements,
contracts and other instruments, upon such terms and
conditions as the Authority shall determine to be reasonable,
(ii) to require the inclusion in any contract, loan agreement
or other instrument such provisions for the construction,
use, operation, maintenance and financing of the project as
the Authority may deem necessary or desirable, (iii) to issue
its bonds for such purposes, subject to the approval of the
Treasurer of the State, and, (iv) as security for the payment
of the principal or redemption price, if any, of and interest
on any such bonds, to pledge or assign such a loan, lease or
sale agreement and the revenues and receipts derived by the
Authority from such a project; and
WHEREAS, by various resolutions, as amended by subsequent
resolutions, in furtherance of the purposes of the Act, the
Authority has accepted the application of Bridgeport Hydraulic
Company for assistance in the financing of various capital
projects in the State of Connecticut; and
WHEREAS, the Authority has by a further resolution adopted
November 8, 1988, authorized the issuance of $7,700,000
principal amount of its Water Facilities Refunding Revenue
Bonds (Bridgeport Hydraulic Company Project - 1988 Series) (the
"Series C Prior Obligations") the proceeds of which were loaned
to the Borrower and used for the refunding in full of
$7,700,000 principal amount of its Water Facilities Revenue
Bonds (Bridgeport Hydraulic Company Project - 1982 Series), the
proceeds of which were loaned to the Borrower and used for the
acquisition, construction and installation of certain additions
to the Water System of the Borrower; and
WHEREAS, the Authority has by a further resolution adopted
October 15, 1984, authorized the issuance of $10,000,000
principal amount of its Water Facilities Revenue Bonds
(Bridgeport Hydraulic Company Project - 1984 Series) (the
"Series A Prior Obligations"), the proceeds of which were
loaned to the Borrower and used for the acquisition,
construction and installation of certain additions to the Water
System of the Borrower; and
WHEREAS, the Authority has by a further resolution adopted
June 2, 1993, authorized the issuance of the Initial Bonds for
the purpose of providing funds for the refunding of the Series
C Prior Obligations and the Series A Prior Obligations
(together, the "Prior Obligations"); and
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WHEREAS, pursuant to such resolution the Bonds are to be
secured by an Indenture of Trust of even date herewith, by
and between the Authority and The Chase Manhattan Bank of
Connecticut, N.A., as Trustee; and
WHEREAS, the Initial Bonds and any Additional Bonds shall be
special obligations of the Authority, payable solely from
the revenues or other receipts, funds or moneys to be derived
by the Authority under this Agreement or the Indenture and from
any amounts otherwise available under the Indenture for the
payment of the Initial Bonds; and
WHEREAS, the Authority proposes with the proceeds of the
Initial Bonds to make a loan to the Borrower and the Borrower
proposes to borrow such proceeds from the Authority for the
purpose of refunding the Prior Obligations; and
WHEREAS, the Borrower acknowledges that the Authority is
providing financing for the Project in furtherance of the
Authority's corporate purposes under the Act, that the
accomplishment of these purposes is dependent upon the
compliance of the Borrower with its covenants contained in this
Agreement that the Authority has a resulting beneficial
interest in the Project, and that the Borrower's use of and
interest in the Project as provided hereby are in furtherance
of the discharge of a public purpose; and
WHEREAS, the Connecticut Department of Public Utility
Control (the "DPUC") has approved the issuance of the Note (or
the Mortgage Bond as the case may be);
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, covenants and agreements herein set
forth, the Authority and the Borrower, each binding itself, its
successors and assigns, do mutually promise, covenant and agree
as follows (provided that in the performance of the agreements
of the Authority herein contained, any obligation it may incur
for the payment of money shall not be an obligation, debt or
liability of the State or any municipality thereof and neither
the State nor any municipality thereof shall be liable on any
obligation so incurred, but any such obligation shall be
payable solely out of the revenues or other receipts, funds or
moneys to be derived by the Authority under this Agreement or
the Indenture and from any amounts otherwise available under
the Indenture for the payment of the Initial Bonds):
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this
Agreement, the following words and terms shall have the
respective meanings set forth as follows, and any capitalized
word or term used but not defined herein is used as defined in
the Indenture:
"Act" means the State Commerce Act, constituting Connecticut
General Statutes, Sections 32-la through 32-23ss, as amended.
"Additional Bonds" means one or more series of additional
Bonds, other than the Initial Bonds, authorized and issued by
the Authority pursuant to the Indenture.
"Agreement" means this Loan Agreement and any amendments and
supplements hereto.
"Authority" means the Connecticut Development Authority, a
body corporate and politic constituting a public instrumentality
and political subdivision of the State of Connecticut duly
organized and existing under the laws of the State, and any
body, board, authority, agency or other political subdivision
or instrumentality of the State which shall hereafter succeed
to the powers, duties and functions thereof.
"Authorized Investments" means any of the following:
(A) Direct obligations of the United States of America
(including obligations issued or held in book-entry
form on the books of the Department of the Treasury)
or obligations the principal of and interest on which
are unconditionally guaranteed by the United States of
America;
(B) Bonds, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of the
following federal agencies and provided such
obligations are backed by the full faith and credit of
the United States of America: U.S. Export Bank,
Farmers Home Administration, Federal Financing Bank,
Federal Housing Administration, General Services
Administration, Government National Mortgage
Association, U.S. Maritime Administration, U.S. Public
Housing Notes and Bonds, and U.S. Department of
Housing and Urban Development;
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(C) Bonds, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of the
following U.S. government agencies: Federal Home Loan
Bank System (Senior debt obligations only), Federal
Home Loan Mortgage Corporation (Participation
Certificates and Senior debt obligations only),
(D) Money Market funds registered under the Federal
Investment Company Act of 1940, whose shares are
registered under the Federal Securities Act of 1933,
and having a rating by Standard & Poor's Corporation
("S & P") of AAAm-G; AAAm; or AAm;
(E) Certificates of deposit secured at all times by
collateral described in (A) and/or (B) above. Such
certificates must be issued by commercial banks,
savings and loan associations or mutual savings banks.
The collateral must be held by a third party and
the Trustee must have a perfected first security
interest in the collateral;
(F) Certificates of deposit, savings accounts, deposit
accounts or money market deposits which are fully
insured by the Federal Deposit Insurance Corporation
or the Federal Savings and Loan Insurance Corporation;
(G) Investment Agreements, including guaranteed investment
contracts, acceptable to MBIA and the Authority;
(H) Commercial paper rated, at the time of purchase, "Prime
- 1" by Moody's Investors Service, Inc. ("Moody's")
and "A-1" or better by S&P;
(I) Bonds or notes issued by any state or municipality
which are rated by Moody's or S&P in the highest rating
category assigned by such agencies;
(J) Repurchase agreements which satisfy the requirements
of, or are otherwise satisfactory to, MBIA and the
Authority.
"Authorized Representative" means, in the case of the
Authority, the Chairman or Vice Chairman, the President, the
Executive Vice President or any Senior Vice President or any
Vice President thereof and, in the case of the Borrower, the
Chairman, President, any Vice President, Treasurer or Secretary
thereof and, when used with reference to the performance of any
act, the discharge of any duty or the execution of any
certificate or other document, any officer, employee or other
person authorized to perform such act, discharge such duty or
execute such certificate or other document.
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"Beneficial Owner" shall have the meaning specified in
Section 2.3(F) of the Indenture. If any person claims to the
Trustee to be a Beneficial Owner, for purposes of Section
2.4(C) of the Indenture, such person shall prove such claim
to the satisfaction of the Trustee with such documentation and
signature guaranties as the Trustee may request.
"Bond" means any bond authenticated and delivered pursuant
to the Indenture, including the Initial Bonds and the Additional
Bonds.
"Bondholder", "holder" or "owner" or words of similar
import, when used with reference to Bonds, shall unless
otherwise specified, mean any person who shall be the
registered owner of any Outstanding Bond.
"Borrower" means (i) Bridgeport Hydraulic Company, a
corporation organized and existing under the laws of the State
of Connecticut, and its successors and assigns and (ii) any
surviving resulting or transferee corporation as provided in
Section 6.1 hereof.
"Business Day" means any day on which banks located in
Bridgeport Connecticut are not required or authorized to remain
closed and on which the New York Stock Exchange, Inc. is not
closed.
"Code" means the Internal Revenue Code of 1986, as amended
and regulations promulgated thereunder.
"Date of Delivery" means, with respect to each Series of
Bonds, the date that such Series of Bonds are issued, dated and
delivered.
"Debt Service Fund" means the special trust fund so
designated, established pursuant to Section 5.1 of the
Indenture.
"DTC" or "The Depository Trust Company" shall mean the
limited-purpose trust company organized under the laws of the
State of New York which shall act as securities depository for
the Bonds, and any successor thereto.
"Determination of Taxability" means with respect to each
Series of Bonds (1) a ruling by the Internal Revenue Service,
(2) the receipt by the owner of any Series of Bonds from the
Internal Revenue Service of a notice of assessment and demand
for payment and (provided the Borrower has been afforded the
opportunity to participate at its own expense in all appeals
and proceedings to which such owner of the Bonds is a party
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relating to such assessment and demand for payment) the
expiration of the appeal period provided therein if no appeal
is taken or, if an appeal is taken by such owner as provided
in Section 6.3 of this Agreement within the applicable appeal
period which has the effect of staying the demand for
payment, a final unappealable decision by a court of
competent jurisdiction, or (3) the admission in writing by
the Borrower, in any case to the effect that the interest on
any Series of Bonds is includable in the gross income for
federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch
profits tax) of an owner or former owner thereof, other than
for a period during which such owner or former owner is or was
a "Substantial User" of the portion of the Project financed
by such Series of Bonds or a "Related Person" as such terms
are defined in the Code. For purposes of this definition,
the term owner means the Beneficial Owner of the Bonds so
long as the Book-Entry System is in effect.
"DPUC" means the State Department of Public Utilities
Control.
"Event of Default" means an Event of Default as defined in
subsection 7.1 hereof.
"Financing Documents" (1), when used with respect to the
Borrower, means all documents and agreements executed and
delivered by the Borrower as security for or in connection with
the issuance of the Bonds, including this Agreement, the Tax
Regulatory Agreement, the Note and all other documents and
agreements executed and delivered by the Borrower in connection
with any of the foregoing and (2) when used with respect to the
Authority, means any of the foregoing documents and agreements
to which the Authority is a direct party. The Financing
Documents do not include any documents or agreements to which
the Borrower is not a direct party, including the Bonds or the
Indenture.
"Indenture" means the Indenture of Trust, of even date
herewith, by and between the Authority and the Trustee,
together with all indentures supplemental thereto made and
entered into in accordance therewith.
"Initial Bonds" means the Series 1993C Bonds and the Series
1994A Bonds authorized and issued pursuant to Section 2.3 of
the Indenture, provided that if one of such Series is not then
issued and outstanding the term Initial Bonds shall mean only
the Series that is then issued and outstanding.
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"Interest Payment Date" shall mean each date on which
interest is payable on the Bonds as provided in Article II of
the Indenture (or, if such date is not a Business Day, the
immediately succeeding Business Day).
"Mortgage" means the Mortgage Trust Indenture dated as of
June 1, 1924 as has heretofore been and may be supplemented
from time to time between the Bridgeport Hydraulic Company and
The Bridgeport Trust Company, as trustee therefor.
"Mortgage Trustee" means The Chase Manhattan Bank of
Connecticut, N.A., as successor trustee to The Bridgeport Trust
Company.
"Net Proceeds" when used with respect to any insurance or
condemnation award, means the gross proceeds from such award
less all expenses (including attorney's fees and expenses and
any extraordinary expenses of the Trustee) incurred by the
Trustee in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as
amended, in effect on August 15, 1986, as amended, and the
temporary and permanent regulations thereunder.
"Note" means the promissory note of the Borrower to the
Authority, dated November 1, 1993, in the form attached as an
Appendix hereto, and any amendments or supplements made in
conformity with the Indenture and this Agreement.
"Outstanding", when used with reference to a Bond or Bonds,
as of any particular date, means all Bonds which have been
authenticated and delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of
payment or redemption prior to maturity or surrendered to
the Trustee for cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed
or for the payment or redemption of which there has been
separately set aside and held in the Redemption Account
either:
(a) moneys in an amount sufficient to effect
payment of the principal or applicable Redemption Price
thereof, together with accrued interest on such
Bond to the payment or redemption date, which payment
or redemption date shall be specified in irrevocable
instructions given to the Trustee to apply such moneys
to such payment on the date so specified; or
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(b) obligations of the kind described in
subsection 12.1(B) of the Indenture in such principal
amounts, of such maturities, bearing such interest and
otherwise having such terms and qualifications as
shall be necessary to provide moneys in an amount
sufficient to effect payment of the principal or
applicable Redemption Price of such Bond, together
with accrued interest on such Bond to the payment or
redemption date, which payment or redemption date shall
be specified in irrevocable instructions given to
the Trustee to apply such obligations to such payment
on the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds in exchange for or in lieu of which other
Bonds shall have been authenticated and delivered under
Article III of the Indenture; and
(4) any Bond deemed to have been paid as provided in
subsection 12.1(B) of the Indenture.
"Paying Agent" means any paying agent for the Bonds
appointed pursuant to subsection 9.1(B) of the Indenture (and
may include the Trustee), and its successor or successors and
any other corporation which may at any time be substituted in
its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date,
(i) the Mortgage, (ii) liens and encumbrances permitted by the
Mortgage while the Mortgage is in effect, (iii) liens for taxes
not yet due and payable, (iv) this Agreement and the Indenture,
(v) utility, access and other easements and rights-of-way, that
will not interfere with or impair the value or use of the
Project as herein provided, (vi) any mechanic's, laborer's,
materialman's, supplier's or vendor's lien or right in respect
thereof if payment is not yet due and payable and for which
statutory lien rights exist, (vii) such minor defects,
irregularities, easements, and, rights-of-way (including
agreements with any railroad the purpose of which is to service
the railroad siding) as normally exist with respect to property
similar in character to the Project and which do not materially
impair the value or use of the property affected thereby for
the purpose for which it was acquired hereunder and (viii) any
mortgage, lien, security interest or other encumbrance to which
the Authority may consent as provided in Section 4.8 hereof.
"Principal and Interest Account" means the special trust
account of the Debt Service Fund so designated, established
pursuant to Section 5.1 of the Indenture.
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"Principal User" means any principal user of the Project
within the meaning of Section 144(a)(2)(B) of the Code,
including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who
holds the largest ownership interest in the Project), lessee
or user of more than 10% of the Project measured either by
occupiable space or fair rental value under any formal or
informal agreement or, under the particular facts and
circumstances, anyone who is a principal customer of the
Project. The term "principal customer" means any person, who
purchases output of the Project under a contract if the
percentage of output taken or to be taken by such person,
multiplied by a fraction the numerator of which is the term
of such contract and the denominator of which is the economic
life of the Project, exceeds 10%. In the case of a person
who purchases output of an electric or thermal energy, gas,
water or other similar facility, such person is a principal
customer if the total output purchased by such person during
any one-year period beginning with the date the facility is
placed in service is more than 10 percent of the facility's
output during each such period. Co-owners or co-lessees who
are shareholders in a corporation or who are collectively
treated as a partnership subject to subchapter K under
section 761(a) of the Code are not treated as Principal Users
merely by reason of their ownership of corporate or
partnership interests.
"Prior Obligations" means the Series C Prior Obligations and
the Series A Prior Obligations, provided that if one of the
Series of Bonds is not then issued and outstanding the term
Prior Obligations shall mean only the Prior Obligations that
were refunded by the Series of Bonds that is then issued and
outstanding.
"Project" means the Series C Project and the Series A
Project, provided that if one of the Series of Bonds is not then
issued and outstanding the term Project shall mean only the
Project refinanced in whole or in part with the proceeds of the
Series of Bonds that is then issued and outstanding.
"Project Equipment" means the Series A Project Equipment and
the Series C Project Equipment, provided that if one of the
Series of Bonds is not then issued and outstanding the term
Project Equipment shall mean only the Project Equipment
refinanced in whole or in part with the proceeds of the Series
of Bonds that is then issued and outstanding.
"Project Realty" means the Series A Project Realty and the
Series C Project Realty, provided that if one of the Series of
Bonds is not then issued and outstanding the term Project shall
mean only the Project refinanced in whole or in part with the
proceeds of the Series of Bonds that is then issued and
outstanding.
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"Redemption Price" means, when used with respect to a Bond
or a portion thereof, the principal amount of such Bond or
portion thereof plus the applicable premium, if any, payable
upon redemption thereof pursuant to the Indenture.
"Refunding Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"Related Person" means, with respect to any Principal User,
a person which is a related person (as defined in Section
144(a)(3) of the Code, and by reference to Sections 267, 707(b)
and 1563(a) of the Code, except that 50% is to be substituted
for 80% in Section 1563(a)).
"Series A Forward Purchase Agreement" means the Forward
Purchase Agreement dated June 9, 1993, by and among the
Borrower, the Authority, Smith Barney, Harris Upham & Co.
Incorporated, Advest, Inc. and U.S. Securities, Inc.
"Series A Prior Obligations" means the $10,000,000 Water
Facilities Revenue Bonds (Bridgeport Hydraulic Company Project
- - 1984 Series).
"Series A Project" means the Series A Project Realty and the
Series A Project Equipment.
"Series A Project Equipment" means all personal property,
goods, leasehold improvements, machinery, equipment,
furnishings, furniture, fixtures, tools and attachments
wherever located and whether now owned or hereafter acquired,
acquired in whole or in part with the proceeds of the Series A
Prior Obligations, and any additions and accessions thereto,
substitutions therefor and replacements thereof, including
without limitation the Series A Project Equipment described in
the appendices hereto, as amended from time to time in
accordance herewith.
"Series A Project Realty" means the realty and other
interests in the real property financed in whole or in part
from the proceeds of the Series A Prior Obligations, together
with all replacements, improvements, extensions, substitutions,
restorations and additions thereto which are made pursuant
hereto including without limitation the Series A Project Realty
described in the appendices hereto, as amended from time to
time in accordance herewith.
"Series C Prior Obligations" means the $7,700,000 Water
Facilities Revenue Bonds (Bridgeport Hydraulic Project - 1988
Series).
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"Series C Project" means the Series C Project Realty and the
Series C Project Equipment.
"Series C Project Equipment" means all personal property,
goods, leasehold improvements, machinery, equipment,
furnishings, furniture, fixtures, tools and attachments
wherever located and whether now owned or hereafter acquired,
acquired in whole or in part with the proceeds of the Series C
Prior Obligations or any tax-exempt securities refunded by the
Series C Prior Obligations, and any additions and accessions
thereto, substitutions therefor and replacements thereof,
including without limitation the Series C Project Equipment
described in the appendices hereto, as amended from time to
time in accordance herewith.
Series C Project Realty" means the realty and other
interests in the real property financed in whole or in part
from the proceeds of the Series C Prior Obligations or any
tax-exempt securities refunded by the Series C Prior
Obligations, together with all replacements, improvements,
extensions, substitutions, restorations and additions thereto
which are made pursuant hereto including without limitation the
Series C Project Realty described in the apppendices hereto, as
amended from time to time in accordance herewith.
"Series 1993C Bonds" means the $7,700,000 Water Facilities
Refunding Revenue Bonds (Bridgeport Hydraulic Company Project -
1993C Series) authorized and issued pursuant to Section 2.3
hereof.
"Series 1994A Bonds" means the $10,000,000 Water Facilities
Refunding Revenue Bonds (Bridgeport Hydraulic Company Project -
1994A Series) authorized and issued pursuant to Section 2.3
hereof.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project
within the meaning of Section 147(a) of the Code.
"Supplemental Indenture" means any indenture supplemental to
the Indenture or amendatory of the Indenture, adopted by the
Authority in accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on
any Series of Bonds becomes or became includable in the gross
income of the recipient thereof (other than the Borrower or
another Substantial User or Related Person) for federal income
tax purposes for any cause, as determined by a Determination of
Taxability.
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"Tax Regulatory Agreements" means the Tax Regulatory
Agreements, dated as of the Date of Delivery, among the
Authority, the Borrower and the Trustee, and any amendments
and supplements thereto, provided that if one of the Series of
Bonds is not then issued and outstanding the term Tax
Regulatory Agreements shall mean only the Tax Regulatory
Agreement with respect to the Series of Bonds that is then
issued and outstanding.
"Term", when used with reference to this Agreement, means
the term of this Agreement determined as provided in Article
III hereof.
"Trustee" means The Chase Manhattan Bank of Connecticut,
N.A., Bridgeport, Connecticut, and its successor or successors
hereafter appointed in the manner provided in the Indenture.
"Water System" shall mean the plants, structures and other
real and personal property acquired, constructed or operated or
to be acquired, constructed or operated by the Borrower,
including without limitation reservoirs, basins, dams, canals,
aqueducts, tanks, elevated tanks, standpipes, conduits,
pipelines, mains, pumping stations, water distribution systems,
compensating reservoirs, waterworks or sources of water supply,
wells, purification or filtration plants or other plants and
works, connections, rights or flowage as diversion, flood
rights, and other plants, structures, boats, conveyances, and
other real and personal property and rights therein; and
appurtenances necessary or useful and convenient for the
accumulation, treatment or distribution of water.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein",
"hereunder" and any similar terms, as used in this
Agreement, refer to this Agreement, and the term
"hereafter" means after, and the term "heretofore" means
before, the date of this Agreement.
(2) Words of the masculine gender mean and include
correlative words of the feminine and neuter genders and
words importing the singular number mean and include the
plural number and vice versa.
(3) Words importing persons include firms,
associations, partnerships (including limited
partnerships), trusts, corporations and other legal
entities, including public bodies, as well as natural
persons.
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(4) Any headings preceding the texts of the several
Articles and Sections of this Agreement, and any table of
contents appended to copies hereof, shall be solely for
convenience of reference and shall not constitute a part of
this Agreement, nor shall they affect its meaning,
construction or effect.
(5) Nothing contained in this Agreement shall be
construed to cause the Borrower to become the agent for the
Authority or the Trustee for any purpose whatsoever, nor
shall the Authority or the Trustee be responsible for
any shortage, discrepancy, damage, loss or destruction of
any part of the Project wherever located or for whatever
cause.
(6) All approvals, consents and acceptances required
to be given or made by any person or party hereunder shall
be at the sole discretion of the party whose approval,
consent or acceptance is required.
(7) All notices to be given hereunder shall be given
in writing within a reasonable time unless otherwise
specifically provided.
(8) This Agreement shall be governed by and construed
in accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled
invalid by any court of competent jurisdiction, the
invalidity of such provision shall not affect any of the
remaining provisions hereof.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The
Authority represents and warrants that:
(1) It is a body corporate and politic constituting a
public instrumentality and political subdivision of the
State, duly organized and existing under the laws of the
State including the Act. The Authority is authorized to
issue the Bonds in accordance with the Act and to use the
proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of
the Act and has full power and authority pursuant to the
Act to consummate all transactions contemplated by the
Bonds, the Indenture and the Financing Documents.
(3) By resolution duly adopted by the Authority and
still in full force and effect, the Authority has
authorized the execution, delivery and due performance of
the Bonds, the Indenture and the Financing Documents, and
the taking of any and all action as may be required on the
part of the Authority to carry out, give effect to and
consummate the transactions contemplated by this Agreement
and the Indenture, and all approvals necessary in
connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed,
authenticated, issued and delivered, constitute valid and
binding special obligations of the Authority payable solely
from revenues or other receipts, funds or moneys pledged
therefor under the Indenture and from any amounts otherwise
available under the Indenture, and are entitled to the
benefit of the Indenture. Neither the State nor any
municipality thereof is obligated to pay the Bonds or the
interest thereon. Neither the faith and credit nor the
taxing power of the State nor any municipality thereof is
pledged for the payment of the principal, and premium, if
any, of and interest on the Bonds.
(5) The execution and delivery of the Bonds, the
Indenture and the Financing Documents and compliance with
the provisions thereof, will not conflict with or
constitute on the part of the Authority a violation of,
breach of or default under its by-laws or any statute,
indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which the Authority is a
party
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or by which the Authority is bound, or, to the knowledge of
the Authority, any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Authority or any of its activities or properties, and all
consents, approvals, authorizations and orders of
governmental or regulatory authorities which are required
for the consummation by the Authority of the transactions
contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and
the Indenture, the Authority will apply the proceeds of the
Bonds to the purposes specified in the Indenture and the
Financing Documents.
(7) There is no action, suit, proceeding or
investigation at law or in equity before or by any court,
public board or body pending or threatened against or
affecting the Authority, or to the best knowledge of the
Authority, any basis therefor, wherein an unfavorable
decision, ruling or finding would adversely affect the
transactions contemplated hereby or by the Indenture, or
which, in any way, would adversely affect the validity of
the Bonds, or the validity of or enforceability of the
Indenture or the Financing Documents, or any agreement or
instrument to which the Authority is a party and which is
used or contemplated for use in consummation of the
transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action
which will result in a valid claim for any finders or
similar fees or commitments in respect of the transactions
contemplated by this Agreement.
(9) The representations of the Authority set forth in
the Tax Regulatory Agreements delivered concurrently with
the execution and delivery hereof are by this reference
incorporated in this Agreement as though fully set forth
herein.
Section 2.2. Representations by the Borrower. The
Borrower represents and warrants that:
(1) The Borrower has been duly incorporated and validly
exists as a corporation in good standing under the laws of the
State of Connecticut, is not in violation of any provision of
its certificate of incorporation or its by-laws, has corporate
power to enter into and perform the Financing Documents, and by
proper corporate action has duly authorized the execution and
delivery of the Financing Documents.
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(2) The Financing Documents constitute valid and
legally binding obligations of the Borrower, enforceable in
accordance with their respective terms, except to the
extent that such enforceability may be limited by bankruptcy
or insolvency or other laws affecting creditors' rights
generally or by general principles of equity.
(3) Neither the execution and delivery of the
Financing Documents, the consummation of the transactions
contemplated thereby, nor the fulfillment by the Borrower of
or compliance by the Borrower with the terms and
conditions thereof is prevented or limited by or conflicts
with or results in a breach of, or default under the terms,
conditions or provisions of any contractual or other
restriction on the Borrower, evidence of its indebtedness or
agreement or instrument of whatever nature to which the
Borrower is now a party or by which it is bound, or
constitutes a default under any of the foregoing. No event
has occurred and no condition exists which, upon the
execution and delivery of any Financing Documents,
constitutes an Event of Default hereunder or an event of
default thereunder or, but for the lapse of time or the
giving of notice, would constitute an Event of Default
hereunder or an event of default thereunder.
(4) There is no action or proceeding pending or, to
the knowledge of the Borrower, threatened against the
Borrower before any court, administrative agency or
arbitration board that may materially and adversely affect
the ability of the Borrower to perform its obligations
under the Financing Documents and all authorizations,
consents and approvals of governmental bodies or agencies
required in connection with the execution and delivery of
the Financing Documents and in connection with the
performance of the Borrower's obligations hereunder or
thereunder have been obtained.
(5) The execution, delivery and performance of the
Financing Documents and any other instrument delivered by
the Borrower pursuant to the terms hereof or thereof are
within the corporate powers of the Borrower and have been
duly authorized and approved by the board of directors of
the Borrower and are not in contravention of law or of the
Borrower's certificate of incorporation or by-laws, as
amended to date, or of any undertaking or agreement to which
the Borrower is a party or by which it is bound.
(6) The Borrower represents that it has not made any
commitment or taken any action which will result in a valid
claim for any finders' or similar fees or commitments in
respect of the transactions described in this Agreement.
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(7) The Project is included within the definition of a
"project" in the Act, and its estimated cost is equal to
or in excess of $17,700,000. The Borrower intends the
Project to be and continue to be an authorized project under
the Act during the Term of this Agreement.
(8) All amounts shown in Exhibit D of the Tax
Regulatory Agreements are eligible costs of a project
financed by bonds issued by the Authority under the Act,
and may be financed by amounts in the Refunding Fund under
the Indenture. None of the proceeds of the Bonds will be
used directly or indirectly as working capital or to finance
inventory.
(9) The Project is in material compliance with all
applicable material federal, State and local laws and
ordinances (including rules and regulations) relating to
zoning, building, safety and environmental quality.
(10) The Borrower has obtained all necessary material
approvals from any and all governmental agencies requisite
to the Project, and has also obtained all material occupancy
permits and authorizations from appropriate authorities
authorizing the occupancy and use of the Project for the
purposes contemplated hereby. The Borrower further
represents and warrants that it has completed the Project
in accordance with all material federal, State and local
laws, ordinances and regulations applicable thereto.
(11) The availability of financial assistance from the
Authority as provided herein and in the Indenture has
induced the Borrower to locate the Project in the State.
The Borrower does not intend to lease the project.
(12) The Borrower will not take or omit to take any
action which action or omission will in any way cause the
proceeds of the Bonds to be applied in a manner contrary to
that provided in the Indenture and the Financing Documents
as in force from time to time.
(13) The Borrower has not taken and will not take any
action and knows of no action that any other person, firm or
corporation has taken or intends to take, which would
cause interest on either Series of Bonds to be includable in
the gross income of the recipients thereof for federal
income tax purposes. The representations, certifications
and statements of reasonable expectation made by the
Borrower in the Tax Regulatory Agreements and relating to
Project description, composite issues, bond maturity and
average asset economic life, use of Bond proceeds,
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arbitrage and related matters are hereby incorporated by
this reference as though fully set forth herein.
(14) The Borrower has good and marketable title in fee
simple to the Project Realty subject only to Permitted
Encumbrances and to irregularities or defects in title which
may exist which do not materially impair the use of such
properties in the Borrower's business.
(15) The Borrower has good and merchantable title to
the Project Equipment owned by the Borrower as of the date
hereof, free and clear of liens and encumbrances other than
Permitted Encumbrances.
(16) As of the date of execution hereof, except for the
Mortgage, neither the Borrower, nor to its knowledge
anyone acting on behalf of the Borrower, has entered into
negotiations with any person for the purpose of undertaking
any borrowing concurrently with or subsequent to the
issuance of the Initial Bonds and to be secured wholly or
partially by a lien or encumbrance on the Project or any
part thereof, and the Borrower has no present intention of
undertaking any such borrowing.
(17) The Borrower will use all of the bond proceeds of
the Initial Bonds to refund the Prior Obligations.
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ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions
and in accordance with the terms of this Agreement, the
Authority agrees to make a loan to the Borrower from the
proceeds of the Series 1993C Bonds in the amount of $7,611,835
and to make a loan to the Borrower from the proceeds of the
Series 1994A Bonds in the amount of $9,892,400 and the Borrower
agrees to borrow such amounts from the Authority.
(B) The loan shall be made at the time of delivery of
the Initial Bonds and receipt of payment therefor by the
Authority against receipt by the Authority of the Note duly
executed and delivered to evidence the pecuniary indebtedness
of the Borrower hereunder. Any additional loan shall be made
at the time of delivery of the applicable series of Additional
Bonds and receipt of payment therefor by the Authority against
receipt by the Authority of a supplemental Note duly executed
and delivered to evidence the additional pecuniary indebtedness
of the Borrower hereunder. As and for the loan and any
additional loan the Authority shall apply the proceeds of the
Initial Bonds and any Additional Bonds as provided in the
Indenture on the terms and conditions therein prescribed.
(C) On or before 11:00 a.m. of each due date for the
payment of the principal of or interest on the Bonds, until the
principal or Redemption Price, if any, of and interest on the
Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture,
the Borrower shall make loan payments to the Trustee for the
account of the Authority in an amount which, when added to any
moneys then on deposit in the Debt Service Fund and available
therefor, shall be equal to the amount payable on such due date
with respect to the Bonds as provided in Section 5.3 of the
Indenture, including amounts due for the payment of the
principal of and interest on the Bonds. In addition, the
Borrower shall pay to the Trustee, as and when the same shall
become due, all other amounts due under the Financing
Documents, together with interest thereon at the then
applicable rate as set forth herein in Section 6.2(G). The
Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in
Article VIII hereof.
(D) Anything herein to the contrary notwithstanding
any amount at any time held in the Principal and Interest
Account of the Debt Service Fund by the Trustee pursuant to
this Section shall be credited against the next succeeding loan
payment obligation of the Borrower as provided in subsection
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3.1(C) hereof. If, on any due date for payments with respect
to the Bonds, the balance in the Debt Service Fund is
insufficient to make such payments, the Borrower agrees
forthwith to pay to the Trustee no later than 11:00 a.m. the
amount of the deficiency. If at any time the amount held by
the Trustee in the Debt Service Fund shall be sufficient to
pay or provide for the payment of the Bonds in accordance with
Section 12.1 of the Indenture, the Borrower shall not be
obligated to make any further payments under the foregoing
provisions.
Section 3.2. Other Amounts Payable. (A) The Borrower
hereby further expressly agrees to pay to the Trustee as and
when the same shall become due, (i) an amount equal to the
initial and annual fees of the Trustee for the ordinary
services of the Trustee rendered and its ordinary expenses
incurred under the Indenture and the fees and expenses of
Trustee's counsel, including fees and expenses as registrar and
in connection with preparation and delivery of new Bonds upon
exchanges or transfers, (ii) the reasonable fees and expenses
of the Trustee and any Paying Agents on the Bonds for acting as
paying agents as provided in the Indenture, including the
reasonable fees and expenses of its counsel, and (iii) the
reasonable fees and charges of the Trustee for extraordinary
services rendered by it and extraordinary expenses incurred by
it under the Indenture, including reasonable counsel fees and
expenses.
(B) The Borrower also agrees to pay all amounts
payable by it under the Financing Documents at the time and in
the manner therein provided.
Section 3.3. Manner of Payment. The payments provided for
in Section 3.1 hereof shall be made by any reasonable method
providing immediately available funds at the time and place of
payment directly to the Trustee for the account of the
Authority and shall be deposited in the Debt Service Fund. The
additional payments provided for in Section 3.2 shall be made
in the same manner directly to the entitled party or to the
Trustee for its own use or disbursement to the Paying Agents,
as the case may be.
Section 3.4. Obligation Unconditional. The obligations of
the Borrower under the Financing Documents shall be absolute
and unconditional, irrespective of any defense or any rights of
setoff, recoupment or counterclaim it might otherwise have
against the Authority or the Trustee. The Borrower will not
suspend or discontinue any such payment or terminate this
Agreement (other than in the manner provided for hereunder) for
any cause, including, without limiting the generality of the
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foregoing, any acts or circumstances that may constitute
failure of consideration, failure of title, or commercial
frustration of purpose, or any damage to or destruction of
the Project, or the taking by eminent domain of title to or
the right of temporary use of all or any part of the Project,
or any change in the tax or other laws of the United States,
the State or any political subdivision of either thereof, or
any failure of the Authority or the Trustee to perform and
observe any agreement or covenant, whether expressed or
implied, or any duty, liability or obligation arising out of
or connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby
notifies the Borrower and the Borrower acknowledges that, among
other things, the Borrower's loan payments and all of the
Authority's right, title and interest under the Financing
Documents to which it is a party (except its rights under
Section 6.2 hereof) are being concurrently with the execution
and delivery hereof endorsed, pledged and assigned without
recourse by the Authority to the Trustee as security for the
Bonds as provided in the Indenture.
Section 3.6. Issuance of Initial Bonds. The Authority has
concurrently with the execution and delivery hereof sold and
delivered the Series 1993C Bonds and intends to sell and
deliver the Series 1994A Bonds, subject to the terms and
conditions of the Series A Forward Purchase Agreement, on or
about August 16, 1994, in each case under and pursuant to a
resolution adopted by the Authority on June 2, 1993,
authorizing their issuance under and pursuant to the Indenture.
The proceeds of sale of the Initial Bonds shall be applied as
provided in Articles IV and V of the Indenture.
Section 3.7. No Additional Bonds. No Additional Bonds on a
parity with the Initial Bonds may be issued under the Indenture.
Section 3.8. Effective Date and Term. (A) This Agreement
shall become effective upon its execution and delivery by the
parties hereto, shall remain in full force from such date and,
subject to the provisions hereof (including particularly
Articles VII and VIII), shall expire on such date as the
Indenture shall be discharged and satisfied in accordance with
the provisions of subsection 12.1(A) thereof. The Borrower's
obligations under Sections 6.2 and 6.3 hereof, however, shall
survive the expiration of this Agreement in accordance with the
provisions of said Sections.
(B) Within 60 days of such expiration the Authority
shall deliver to the Borrower any documents and take or cause
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the Trustee, at the Borrower's expense, to take any such
reasonable actions as may be necessary to effect the
cancellation, release and satisfaction of the Indenture and
the Financing Documents.
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ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower
represents and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the
costs and expenses in connection with the preparation of the
Financing Documents and the Indenture, the preparation and
delivery of any legal instruments and documents necessary in
connection therewith and their filing and recording, if
required, and all taxes and charges payable in connection with
any of the foregoing. Such costs and all other costs of the
Project shall be paid by the Borrower or from the Refunding
Fund in the manner and to the extent provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability
or Cost of Project. Neither the Authority, nor the Trustee,
nor any Bondholder makes any warranty, either expressed or
implied, as to the Project or its condition or that it will be
suitable for the Borrower's purposes or needs, or that the
insurance required hereunder will be adequate to protect the
Borrower's business or interest, or that the proceeds of the
Bonds will be sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all
material (1) taxes, assessments, water rates and sewer use
or rental charges, (2) payments in lieu thereof which may be
required by law, and (3) governmental charges and impositions
of any kind whatsoever which may now or hereafter be lawfully
assessed or levied upon the Project Realty and the Project
Equipment or any part thereof, or upon the rents, issues, or
profits thereof, whether directly or indirectly. With respect
to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the
Borrower shall be obligated to pay only such installments as
are required to be paid during the Term.
(B) The Borrower may, at its expense and in its own
name, in good faith contest any such taxes, assessments and
other charges and payments in lieu of taxes including
assessments and, in the event of such contest, may permit the
taxes, assessments or other charges or payments in lieu of
taxes, including assessments so contested to remain unpaid,
provided either (1) prior written notice thereof has been given
to the Trustee and reserves satisfactory to the Trustee are
maintained during the period of such contest and any appeal
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therefrom or (2) such contest is conducted in full compliance
with Connecticut General Statutes Section 12-53a(d), unless,
in either case, by nonpayment of such taxes, assessments or
other charges or payments, the Project or any part thereof
will be subject to loss or forfeiture, and as a result
thereof a lien or charge will be placed upon any payment
pursuant to this Agreement or the value or operation of the
Project Realty and the Project Equipment will be materially
impaired, in which event such taxes, assessments or other
charges or payments shall be paid forthwith. Nothing herein
shall preclude the Borrower, at its expense and in its own
name and behalf, from applying for any tax exemption allowed
by the federal government, the State or any political or
taxing subdivision thereof under any existing or future
provision of law which grants or may grant such tax exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the
Project Realty and the Project Equipment against loss or damage
by fire, flood, lightning, windstorm, vandalism and malicious
mischief and other hazards, casualties, contingencies and
extended coverage risks in such amounts and in such manner as
is required by the Mortgage while the Mortgage is in effect and
thereafter as is customary with companies in the same or
similar business, and shall pay when due the premiums thereon.
In the event of loss or damage to the Project Realty or Project
Equipment the Net Proceeds of any insurance provided under this
subsection shall be deposited with the Mortgage Trustee as
required by the Mortgage while the Mortgage is in effect and
thereafter shall be applied to the manner set forth in Article
V hereof. Any excess proceeds of insurance remaining after
application as required by this Section shall be paid to the
Borrower, but only if the Borrower is not in default under this
Agreement. At least ten days prior to the expiration of any
policy required under this Section the Borrower shall furnish
evidence satisfactory to the Authority and the Trustee that
such policy has been renewed or replaced.
(B) The Borrower further agrees that it will at all
times carry public liability insurance with respect to the
Project Realty and Project Equipment to the extent required by
the Mortgage while the Mortgage is in effect and thereafter in
a minimum amount of $5,000,000. Any such policy of public
liability insurance may contain provisions for a deductible
amount not in excess of five percent of the amount of the
coverage thereunder. In the event of a public liability
occurrence, the Net Proceeds of the insurance provided under
this subsection shall be applied to satisfy or extinguish the
liability, subject to the Mortgage.
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(C) As an alternative to the hazard insurance and
public liability insurance requirements of subsections (A) or
(B) above the Borrower may self-insure against hazard or
public liability risks if (1) self-insurance is the
Borrower's customary method of insurance against such risks
in similar circumstances, and (2) the Borrower maintains
self-insurance reserves adequate and available to meet such
risks, subject to the terms of the Mortgage while the Mortgage
is in effect. Amounts available under any such
self-insurance arrangement upon the occurrence of an insured
event shall be applied in the same manner as the Net Proceeds
of any insurance maintained pursuant to such subsections
would have been applied.
(D) The insurance coverage required by this Section
may be effected under overall blanket or excess coverage
policies of the Borrower or any affiliate and may be carried
with any insurer other than an unauthorized insurer under the
Connecticut Unauthorized Insurers Act. The Borrower shall
furnish evidence satisfactory to the Authority or the Trustee,
promptly upon the request of either, that the required
insurance coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will
observe and comply with all material laws, regulations,
ordinances, rules, and orders (including without limitation
those relating to zoning, land use, environmental protection,
air, water and land pollution, wetlands, health, equal
opportunity, minimum wages, worker's compensation and
employment practices) of any federal, state, municipal or other
governmental authority relating to the Project Realty and the
Project Equipment except during any period during which the
Borrower at its expense and in its name shall be in good faith
contesting its obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense,
the Borrower will keep and maintain the Project Realty and the
Project Equipment in good condition, working order and repair,
will not commit or suffer any waste thereon, and will make all
material repairs and replacements thereto which may be required
in connection therewith.
Section 4.7. Disposition of Project Realty by Borrower.
(A) The Borrower shall not sell, assign, encumber (other than
Permitted Encumbrances), convey or otherwise dispose of its
interest in the Project Realty or any part thereof during the
Term without the prior written consent of the Authority, except
as permitted hereby or by the Mortgage while the Mortgage is in
effect.
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(B) The Borrower may, however, grant such rights of
way or easements over, across, or under, the Project Realty
as shall be necessary or convenient for the operation or use
of the Project Realty, including but not limited to easements
or rights-of-way for utility, roadway, railroad or similar
purposes in connection with the Project Realty, or for the
use of the real property adjacent to or near the Project and
owned by or leased to the Borrower, but only if such
rights-of-way or easements shall not materially or adversely
affect the value and operation of the Project Realty.
(C) In the event the Authority consents to any
disposition of the Borrower's interest in the Project Realty,
the proceeds of the disposition shall be deposited with the
Mortgage Trustee while the Mortgage is in effect and thereafter
in the Redemption Account of the Debt Service Fund for the
redemption of the applicable Series of Bonds used to finance or
refinance the Project Realty then being disposed of under the
Indenture. No conveyance or release effected under the
provisions of this Section shall entitle the Borrower to any
abatement or diminution of the amounts payable hereunder or
under the Note, or relieve the Borrower of the obligation to
perform all of its covenants and agreements under the Financing
Documents.
Section 4.8. Leasing of the Project Realty and the Project
Equipment. The Borrower may not lease the Project Realty or
the Project Equipment to any person during the Term of this
Agreement without the prior written consent of the Authority,
except as may be permitted by the Mortgage while the Mortgage
is in effect. No lease shall relieve the Borrower from primary
liability for any of its obligations hereunder, and in the
event of any such lease the Borrower shall continue to remain
primarily liable for payment of the applicable amounts
specified in Article III hereof and for performance and
observance of the other agreements on its part herein provided
to be performed and observed by it to the same extent as though
no lease had been made.
Section 4.9. Project Equipment. (A) The Borrower shall
have the right to install, operate, use, remove and dispose of
the Project Equipment in the normal and ordinary course of its
business operations, and shall not be required to replace any
item of Project Equipment which is discarded or sold for scrap.
The Borrower shall not, however, either in one transaction or
a series of transactions sell, convey, transfer, remove or
otherwise dispose of more than 20% by value of the Project
Equipment without prior notice to and the consent of the
Authority, unless such Project Equipment is replaced by
property of similar value and utility, provided that such
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dispositions may be made as permitted by the Mortgage while
the Mortgage is in effect.
(B) The Borrower shall maintain with the Trustee separate
and reasonably detailed descriptions of each item of property
constituting the Series A Project Equipment and the Series C
Project Equipment, respectively. Without limiting the
foregoing, the Project Equipment list appended hereto at the
date of execution and delivery of this Agreement shall be
modified to the extent required by this Section in connection
with any replacement of material items of Project Equipment
under this Section or under Section 5.2 hereof.
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ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the
Project Realty or the Project Equipment shall be damaged or
either partially or totally destroyed, or if title to or the
temporary use of the whole or any part thereof shall be taken
or condemned by a competent authority for any public use or
purpose, there shall be no abatement or reduction in the
amounts payable by the Borrower hereunder and the Borrower
shall continue to be obligated to make such payments. In any
such case the Borrower shall promptly give written notice
thereof to the Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage
or Destruction. In the event of any such condemnation,
damage or destruction the Borrower, except as otherwise
permitted by the Mortgage while the Mortgage is in effect,
shall:
(1) At its own cost, repair, restore or reconstruct
the Project Realty and the Project Equipment to
substantially its condition immediately prior to such event
or to a condition of at least equivalent value, regardless
of whether or not the proceeds of any and all policies of
insurance covering such damage or destruction, or the amount
of the award or compensation or damages recovered on
account of such taking or condemnation, shall be available
or sufficient to pay the cost thereof;
(2) At its own cost, replace or relocate the Project
Realty and the Project Equipment at its site in such fashion
as to render the replacement or relocated structures,
improvements and items, machinery, equipment or other
property of equivalent value to the Project Realty and the
Project Equipment immediately prior to such event; or
(3) If and as permitted by Section 8.1 hereof,
exercise its option to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or
Condemnation. (A) The Net Proceeds from any insurance or
condemnation award with respect to the Project Realty or the
Project Equipment shall be deposited with the Mortgage Trustee
while the Mortgage is in effect and thereafter shall be
deposited either (1) in the Renewal Fund and applied to pay for
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the cost of making such repairs, restorations,
reconstructions, replacements or relocations, or to reimburse
the Borrower, the Authority or the Trustee for payment
therefor from time to time as provided in the Indenture or (2)
if prepayment of the loan is then permitted and the Borrower
exercises its option to prepay the loan, in the Debt Service
Fund and applied to the payment of the Note and redemption of
the Bonds, in each case with respect to the series of Bonds
the proceeds of which were used to finance or refinance the
Project Realty or Project Equipment which was damaged,
destroyed or condemned.
(B) Notwithstanding the provisions of subsection (A)
of this Section, any insurance or condemnation proceeds
attributable to improvements, machinery, equipment and other
property installed in or about the Project Realty and the
Project Equipment, but which do not constitute a portion of the
Project Realty and the Project Equipment, shall be paid
directly to the Borrower. The Trustee and the Authority agree
to execute such documents as may be reasonably necessary to
accomplish the purposes of this subsection.
(C) The Borrower, the Authority and the Trustee shall
cooperate and consult with each other in all matters pertaining
to the settlement or adjustment of any and all claims and
demands for damages on account of any taking or condemnation of
the Project Realty or the Project Equipment or pertaining to
the settlement, compromising or arbitration of any claim on
account of any damage or destruction thereof.
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ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate
Existence; Conditions under which Exceptions Permitted.
(A) The Borrower covenants and agrees that during the Term of
this Agreement it will maintain its corporate existence, will
continue to be a corporation either organized under the laws of
or duly qualified to do business as a foreign corporation in
the State and in all jurisdictions necessary in the operation
of its business, will not dissolve or otherwise dispose of all
or substantially all of its assets and will not consolidate
with or merge into another corporation or permit one or more
other corporations to consolidate with or merge into it, except
as permitted by the Mortgage while the Mortgage is in effect.
(B) The Borrower may, however, without violating the
agreements contained in this Section, consolidate with or merge
into another corporation or permit one or more other
corporations to consolidate with or merge into it, or sell or
otherwise transfer to another corporation all or substantially
all of its assets as an entity and thereafter liquidate or
dissolve, if (a) the Borrower is the surviving, resulting or
transferee corporation, as the case may be, or (b) in the event
the Borrower is not the surviving, resulting or transferee
corporation, as the case may be, such corporation (i) is a
solvent corporation either organized under the laws of or duly
qualified to do business as a foreign corporation subject to
service of process in the State and (ii) assumes in writing all
of the obligations of the Borrower herein, and the Note.
Section 6.2. Indemnification, Payment of Expenses, and
Advances. (A) The Borrower agrees to protect, defend and
hold harmless the Authority, the State, agencies of the State,
members, servants, agents, directors, officers and employees,
now or forever, of the Authority or the State (each an
"Authority Indemnified Party"), and the Trustee, the Paying
Agent, agents, directors, officers and employees, now or
forever, of the Trustee or the Paying Agent (each an
"Indemnified Party"), from any claim, demand, suit, action or
other proceeding and any liabilities, costs, and expenses
whatsoever by any person or entity whatsoever, arising or
purportedly arising from or in connection with the Financing
Documents, the Indenture, the Mortgage, the Bonds, or the
transactions contemplated thereby or actions taken thereunder
by any person (including without limitation the filing of any
information, form or statement with the Internal Revenue
Service), except for any wilful and material misrepresentation,
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wilful misconduct or gross negligence on the part of the
Indemnified Party or the Authority Indemnified Party or any
bad faith on the part of any indemnitee other than an
Authority Indemnified Party.
The Borrower agrees to indemnify and hold harmless any
Indemnified Party against any and all claims, demands, suits,
actions or other proceedings and all liabilities, costs and
expenses whatsoever caused by any untrue statement or
misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in the
written information provided by the Borrower in connection with
the issuance of the Bonds or incorporated by reference therein
or caused by any omission or alleged omission from such
information of any material fact required to be stated therein
or necessary in order to make the statements made therein in
the light of the circumstances under which they were made, not
misleading.
(B) The Authority and the Trustee shall not be liable
for any damage or injury to the persons or property of the
Borrower or its members, directors, officers, agents, servants
or employees, or any other person who may be about the Project
Realty and the Project Equipment due to any act or omission of
any person other than the Authority or the Trustee or their
respective members, directors, officers, agents, servants and
employees.
(C) The Borrower releases each Indemnified Party from,
agrees that no Indemnified Party shall be liable for, and
agrees to hold each Indemnified Party harmless against, any
attorney fees and expenses, expenses or damages incurred
because of any investigation, review or lawsuit commenced by
the Trustee or the Authority in good faith with respect to the
Financing Documents, the Indenture, the Bonds and the Project
Realty and the Project Equipment, and the Authority or the
Trustee shall promptly give written notice to the Borrower with
respect thereto.
(D) All covenants, stipulations, promises, agreements
and obligations of the Authority and the Trustee contained
herein shall be deemed to be the covenants, stipulations,
promises, agreements and obligations of the Authority and the
Trustee and not of any member, director, officer or employee of
the Authority or the Trustee in its individual capacity, and no
recourse shall be had for the payment of the Bonds or for any
claim based thereon or hereunder against any member, director,
officer or employee of the Authority or the Trustee or any
natural person executing the Bonds.
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(E) In case any action shall be brought against one or
more of the Indemnified Parties based upon any of the
above and in respect of which indemnity may be sought against
the Borrower, such Indemnified Party shall promptly notify
the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any
such action shall not relieve it of any liability which it
may have to any Indemnified Party otherwise than under this
Section 6.2. In case any such action shall be brought against
any Indemnified Party and it shall notify the Borrower of the
commencement thereof, the Borrower shall be entitled to
participate in and, to the extent that it shall wish, to
assume the defense thereof with counsel satisfactory to such
Indemnified Party, and after notice from the Borrower to such
Indemnified Party of the Borrower's election so to assume the
defense thereof, the Borrower shall not be liable to such
Indemnified Party for any subsequent legal or other expenses
attributable to such defense, except as set forth below,
other than reasonable costs of investigation subsequently
incurred by such Indemnified Party in connection with the
defense thereof. The Indemnified Party shall have the right
to employ its own counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the employment of counsel by
such Indemnified Party has been authorized by the Borrower,
(ii) the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Borrower
and the Indemnified Party in the conduct of the defense of
such action (in which case the Borrower shall not have the
right to direct the defense of such action on behalf of the
Indemnified Party); or (iii) the Borrower shall not in fact
have employed counsel satisfactory to the Indemnified Party
to assume defense of such action; provided, however, that
Borrower shall not be responsible for the fees and expenses
of more than one such law firm unless an Indemnified Party
shall have reasonably concluded that there may be a conflict
of interest between such Indemnified Party and any other
Indemnified Party requiring the use of separate counsel, or
Borrower has not employed counsel which is satisfactory to
each Indemnified Party. The Borrower shall not be liable for
any settlement of any action or claim effected without its
consent.
(F) The Borrower also agrees to pay all reasonable or
necessary out-of-pocket expenses of the Authority in connection
with the issuance of the Bonds, the administration of the
Financing Documents and the enforcement of its rights
thereunder.
(G) In the event the Borrower fails to pay any amount
or perform any act under the Financing Documents, the Trustee
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or the Authority may pay the amount or perform the act, in
which event the costs, disbursements, expenses and reasonable
counsel fees and expenses thereof, together with interest
thereon from the date the expense is paid or incurred at the
prime interest rate generally prevailing among banks in the
State on the date of the advance plus 1% shall be an
additional obligation hereunder payable upon demand by the
Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority
under this Section shall be separate from and independent of
the other obligations of the Borrower hereunder, and may be
enforced directly by the Authority against the Borrower
irrespective of any action taken by or on behalf of the owners
of the Bonds.
(I) The obligations of the Borrower under this
section, notwithstanding any other provisions contained in the
Financing Documents, shall survive the termination of this
Agreement and shall be recourse to the Borrower, and for the
enforcement thereof any Indemnified Party shall have recourse
to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreements;
Payments Upon Taxability. (A) For purpose of this Section, the
term owner means the Beneficial Owner of the Bonds so long
as the Book-Entry System is in effect.
(B) The representations, warranties, covenants and
statements of expectation of the Borrower set forth in the Tax
Regulatory Agreements are by this reference incorporated in
this Agreement as though fully set forth herein.
(C) If the owner of any Series of Bonds receives from
the Internal Revenue Service a notice of assessment and demand
for payment with respect to interest on such Bond (except a
notice and demand based upon the assertion that such owner of
the Bonds is a Substantial User or Related Person), an appeal
may be taken by such owner of the Bonds at the option of the
Borrower. Without limiting the generality of the foregoing,
the Borrower shall have the right to direct the Trustee to
direct such owner of the Bonds to take such appeal or not to
take such appeal. In either case all expenses of the appeal
including reasonable counsel fees and expenses shall be paid by
the Borrower, and such owner of the Bonds and the Borrower
shall cooperate and consult with each other in all matters
pertaining to any such appeal, except that no owner of the
Bonds shall be required to disclose or furnish any non-publicly
disclosed information, including, without limitation, financial
information and tax returns.
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(D) Not later than 180 days following a Determination
of Taxability, the Borrower shall pay to the Trustee an
amount sufficient, when added to the amount then in the Debt
Service Fund and available for such purpose, to retire and
redeem all Bonds of the Series affected thereby then
Outstanding, in accordance with Section 2.4 of the Indenture.
If a Determination of Taxability with respect to either or
both Series of Bonds shall have occurred directly as a result
of any event solely within the control of the Borrower, then
such Bonds shall be redeemed in the manner described above,
and there shall also be paid the Premium, as defined in
Section 2.4(C) of the Indenture.
(E) If any Bonds are paid at maturity, redeemed after
the date of a Determination of Taxability, or redeemed or sold
during the taxability period, the former owners of such Bonds,
upon establishing their then ownership of such Bonds and upon
establishing their tax liability in connection with the
interest payable on such Bonds, shall also be entitled to
receive the Premium.
(F) The obligation of the Borrower to make the
payments provided for in this Section shall be absolute and
unconditional, and the failure of the Authority or the Trustee
to execute or deliver or cause to be executed or delivered any
documents or to take any action required under this Agreement
or otherwise shall not relieve the Borrower of its obligation
under this Section. Notwithstanding any other provision of
this Agreement or the Indenture, the Borrower's obligations
under this Section shall survive the termination of this
Agreement and the Indenture.
(G) The occurrence of a Determination of Taxability
shall not be an Event of Default hereunder but shall require
only the performance of the obligations of the Borrower stated
in this Section, the breach of which shall constitute an Event
of Default as provided in Section 7.1 hereof.
Section 6.4. Further Assurances and Corrective
Instruments. The Authority and the Borrower agree that they will, from
time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto
and such further instruments as may reasonably be required for
correcting any inadequate or incorrect description of the
Project Realty or Project Equipment or for carrying out the
intention of or facilitating the performance of this Agreement.
Section 6.5. Covenant by Borrower as to Compliance with
Indenture. The Borrower covenants and agrees that it will
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comply with the provisions of the Indenture with respect to
the Borrower and that the Trustee and the Bondholders shall
have the power and authority provided in the Indenture. The
Borrower further agrees to aid in the furnishing to the
Authority or the Trustee of opinions that may be required
under the Indenture. The Borrower covenants and agrees that
the Trustee shall be entitled to and shall have all the
rights, including the right to enforce against the Borrower
the provisions of the Financing Documents, pertaining to the
Trustee notwithstanding the fact that the Trustee is not a
party to the Financing Documents.
Section 6.6. Assignment of Agreement or Note. (A) The
Borrower may not assign its rights, interests or obligations
hereunder or under the Note except as may be permitted pursuant
to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or
transfer any of the Financing Documents or the revenues and
other receipts, funds and moneys to be received thereunder
during the Term except to the Trustee as provided in this
Agreement and the Indenture.
Section 6.7. Inspection. The Authority, the Trustee and
their duly authorized agents shall have (1) the right at all
reasonable times to enter upon and to examine and inspect the
Project Realty and the Project Equipment and (2) such rights of
access thereto as may be reasonably necessary for the proper
maintenance and repair thereof in the event of failure by the
Borrower to perform its obligations under this Agreement. The
Authority and the Trustee shall also be permitted, at all
reasonable times, to examine the books and records of the
Borrower with respect to the Project Realty and the Project
Equipment.
Section 6.8. Default Notification. Upon becoming aware of
any condition or event which constitutes, or with the giving
of notice or the passage of time would constitute, an Event
of Default, the Borrower immediately shall deliver to the
Authority and the Trustee a notice stating the existence and
nature thereof and specifying the corrective steps the Borrower
is taking with respect thereto.
Section 6.9. Covenant Against Discrimination. (A) The
Borrower in the performance of this Agreement will not
discriminate or permit discrimination against any person or
group of persons on the grounds of race, color, religion,
national origin, age, sex, sexual orientation, marital status,
physical or learning disability, political beliefs, mental
retardation or history of mental disorder in any manner
prohibited by the laws of the United States or of the State.
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(B) The Borrower will comply with the provisions of
the resolution adopted by the Authority on June 14, 1977, as
amended, and the policy of the Authority implemented pursuant
thereto concerning the promotion of equal employment
opportunity through affirmative action plans. The resolution
requires that all borrowers receiving financial assistance
from the Authority adopt and implement an affirmative action
plan prior to the closing of the loan. The plan shall be
updated annually as long as the Bonds remain Outstanding.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the
following shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by
the Borrower in the Financing Documents or any certificate,
statement, data or information furnished in writing to
the Authority or the Trustee by the Borrower in connection
the closing of the initial issue of the Series 1993 Bonds or
included by the Borrower in its application to the
Authority for assistance proves at any time to have been
incorrect when made in any material respect.
(2) Failure by the Borrower to pay any interest,
principal or premium, if any, that has become due and
payable with respect to the Bonds and the continuance of
such failure for more than five Business Days.
(3) Failure by the Borrower to pay any amount, other
than, principal, interest or premium with respect to the
Bonds, that has become due and payable pursuant to the
Financing Documents and the continuance of such failure for
more than thirty days.
(4) Failure by the Borrower to comply with the default
notification provisions of Section 6.8 hereof.
(5) The occurrence of an "event of default" under
Section 8.1 of the Indenture.
(6) Failure by the Borrower to observe or perform any
covenant, condition or agreement hereunder or under the
Financing Documents (except those referred to above) and
(a) continuance of such failure for a period of sixty days
after receipt by the Borrower of written notice specifying
the nature of such failure or (b) if by reason of the
nature of such failure the same cannot be remedied within
the sixty day period, the Borrower fails to proceed with
reasonable diligence after receipt of the notice to cure
the failure.
(7) The Borrower shall (a) apply for or consent to the
appointment of a receiver, trustee, liquidator or
custodian or the like of itself or of its property, (b)
admit in writing its inability to pay its debts generally as
they become due, (c) make a general assignment for the
benefit of creditors, (d) be adjudicated a bankrupt or
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insolvent, or (e) commence a voluntary case under the
Federal bankruptcy laws of the United States of America or
file a voluntary petition or answer seeking reorganization,
an arrangement with creditors or an order for relief or
seeking to take advantage of any insolvency law or file an
answer admitting the material allegations of a petition
filed against it in any bankruptcy, reorganization or
insolvency proceeding; or corporate action shall be taken
by it for the purpose of effecting any of the foregoing; or
if without the application, approval or consent of the
Borrower, a proceeding shall be instituted in any court of
competent jurisdiction, seeking in respect of the Borrower
an adjudication in bankruptcy, reorganization, dissolution,
winding up, liquidation, a composition or arrangement with
creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of
the Borrower or of all or any substantial part of its
assets, or other like relief in respect thereof under any
bankruptcy or insolvency law, and, if such proceeding is
being contested by the Borrower in good faith, the same
shall continue undismissed, or pending and unstayed, for
any period of 75 consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of
Default shall have occurred, the Trustee, or the Authority
where so provided herein, may take any one or more of the
following actions:
(1) The Trustee, as and to the extent provided in
Article VIII of the Indenture, may cause all amounts payable
under the Financing Documents to be immediately due and
payable without notice or demand of any kind, whereupon the
same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee
or any Bondholder, may proceed to enforce the obligations
of the Borrower to the Authority under this Agreement.
(3) The Trustee may take whatever action at law or in
equity it may have to collect the amounts then due and
thereafter to become due, or to enforce the performance or
observance of the obligations, agreements, and covenants of
the Borrower under the Financing Documents.
(4) The Trustee may exercise any and all rights it may
have under the Financing Documents.
(B) In the event that any Event of Default or any
proceeding taken by the Authority (or by the Trustee on behalf
of the Authority) thereon shall be waived or determined
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adversely to the Authority, then the Event of Default shall be
annulled and the Authority and the Borrower shall be restored
to their former rights hereunder, but no such waiver or
determination shall extend to any subsequent or other default
or impair any right consequent thereon.
Section 7.3. No Duty to Mitigate Damages. Unless otherwise
required by law, neither the Authority, the Trustee nor any
Bondholder shall be obligated to do any act whatsoever or
exercise any diligence whatsoever to mitigate the damages to
the Borrower if an Event of Default shall occur.
Section 7.4. Remedies Cumulative. No remedy herein
conferred upon or reserved to the Authority or the Trustee is
intended to be exclusive of any other available remedy or
remedies but each and every such remedy shall be cumulative and
shall be in addition to every remedy given under this Agreement
or now or hereafter existing at law or in equity or by statute.
Delay or omission to exercise any right or power accruing upon
any default or failure by the Authority or the Trustee to
insist upon the strict performance of any of the covenants and
agreements herein set forth or to exercise any rights or
remedies upon default by the Borrower hereunder shall not
impair any such right or power or be considered or taken as a
waiver or relinquishment for the future of the right to insist
upon and to enforce, by injunction or other appropriate legal
or equitable remedy, strict compliance by the Borrower with all
of the covenants and conditions hereof, or of the right to
exercise any such rights or remedies, if such default by the
Borrower be continued or repeated.
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ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall
have, and is hereby granted, the option to prepay its loan
obligation as a whole or in part, or by Series in whole or in
part, at any time by delivering a written notice to the Trustee
in accordance with Section 8.2 hereof, with a copy to the
Authority, setting forth the amount to be prepaid, the amount
of Bonds requested to be redeemed with the proceeds of such
payment, and the date on which such Bonds are to be redeemed,
which date with respect to the Series 1993C Bonds shall be
December 1, 2003 or any date thereafter and which date with
respect to the Series 1994A Bonds shall be August 1, 2004 or
any date thereafter; except that, in the event that at such
time the Borrower is in default under the Financing Documents,
such option may be exercised only as a whole. Such prepayment
must be sufficient to provide moneys for the payment of
interest and Redemption Price in accordance with the terms of
the Bonds requested to be redeemed with such prepayment and all
other amounts then due under the Financing Documents. In the
event of any complete prepayment of its loan obligation, the
Borrower shall, at the time of such prepayment, also pay or
provide for the payment of all reasonable or necessary fees and
expenses of the Authority, the Trustee and the Paying Agent
accrued and to accrue through the final payment of all the
Bonds. Any such prepayments shall be applied to the redemption
of Bonds in the manner provided in Section 6.2 of the
Indenture, and credited against payments due hereunder in the
same manner.
(B) (x) The Borrower shall have, and is hereby
granted, the option to prepay the portion of its loan obligation
relating to the Series 1994A Bonds in full at any time without
premium if any of the following events shall have occurred, as
evidenced in each case by the filing with the Trustee of a
certificate of an Authorized Representative of the Borrower to
the effect that one of such events has occurred and is
continuing, and describing the same:
(1) The Series A Project shall have been damaged or
destroyed to such extent that (a) the Series A Project
cannot be reasonably restored within a period of twelve
months from the date of such damage or destruction to the
condition thereof immediately preceding such damage or
destruction, or (b) the Borrower is thereby prevented or
likely to be prevented from carrying on its normal
operation of the Series A Project for a period of twelve
months from the date of such damage or destruction.
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(2) Title to or the temporary use of all or
substantially all of the Series A Project shall have been
taken or condemned by a competent authority, which taking or
condemnation results or is likely to result in the
Borrower being thereby prevented or likely to be prevented
from carrying on its normal operation of the Series A
Project for a period of twelve months.
(3) As a result of changes in the Constitution of the
United States of America or of the State or as a result of
legislative or executive action of the State or any
political subdivision thereof or by final decree or
judgment of any court after the contest thereof by the
Borrower, (a) the Agreement becomes void or unenforceable or
impossible of performance in accordance with the intent
and purpose of the parties as expressed therein or (b)
unreasonable burdens or excessive liabilities are imposed
upon the Borrower by reason of the operation of the Series A
Project.
(4) Changes in the economic availability of raw
materials, operating supplies or facilities necessary for
the operation of the Series A Project or technological or
other changes shall have occurred which the Borrower cannot
reasonably overcome or control and which in the Borrower's
reasonable judgment render the Series A Project unsuitable
or uneconomic for the purposes herein specified or any tax
shall be levied upon payments due under the Note in an
amount which the Borrower in its reasonable judgment
believes imposes an unreasonable burden upon the Borrower.
(y) The Borrower shall have, and is hereby granted, the
option to prepay the portion of its loan obligation relating to
the Series 1993C Bonds in full at any time without premium if
any of the following events shall have occurred, as evidenced
in each case by the filing with the Trustee of a certificate of
an Authorized Representative of the Borrower to the effect that
one of such events has occurred and is continuing, and
describing the same:
(1) The Series C Project shall have been damaged or
destroyed to such extent that (a) the Series C Project
cannot be reasonably restored within a period of twelve
months from the date of such damage or destruction to the
condition thereof immediately preceding such damage or
destruction, or (b) the Borrower is thereby prevented or
likely to be prevented from carrying on its normal
operation of the Series C Project for a period of twelve
months from the date of such damage or destruction.
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(2) Title to or the temporary use of all or
substantially all of the Series C Project shall have been
taken or condemned by a competent authority, which taking or
condemnation results or is likely to result in the
Borrower being thereby prevented or likely to be prevented
from carrying on its normal operation of the Series C
Project for a period of twelve months.
(3) As a result of changes in the Constitution of the
United States of America or of the State or as a result of
legislative or executive action of the State or any
political subdivision thereof or by final decree or
judgment of any court after the contest thereof by the
Borrower, (a) the Agreement becomes void or unenforceable or
impossible of performance in accordance with the intent
and purpose of the parties as expressed therein or (b)
unreasonable burdens or excessive liabilities are imposed
upon the Borrower by reason of the operation of the Series C
Project.
(4) Changes in the economic availability of raw
materials, operating supplies or facilities necessary for
the operation of the Series C Project or technological or
other changes shall have occurred which the Borrower cannot
reasonably overcome or control and which in the Borrower's
reasonable judgment render the Series C Project unsuitable
or uneconomic for the purposes herein specified or any tax
shall be levied upon payments due under the Note in an
amount which the Borrower in its reasonable judgment
believes imposes an unreasonable burden upon the Borrower.
(z) In any such case the final loan payment shall be a sum
sufficient, together with other funds deposited with Trustee
and available for such purpose, to redeem all Series 1994A
Bonds and/or all Series 1993C Bonds, as the case may be, then
outstanding under the Indenture at the redemption price of 100%
of the principal amount thereof plus accrued interest to the
redemption date and all other amounts then due under the
Financing Documents, and the Borrower shall also pay or provide
for all reasonable or necessary fees and expenses of the
Trustee and Paying Agent accrued and to accrue through final
payment for such Bonds. The Borrower shall deliver a written
notice to the Trustee, with a copy to the Authority, requesting
the redemption of such Bonds hereunder, which notice shall have
attached thereto the applicable certificate of the Authorized
Representative of the Borrower.
Section 8.2. Notice and Sources of Prepayment. To exercise
any options granted in this Article, or to consummate the
acceleration of the loan payments as set forth in this
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Article, the written notice to the Trustee shall be signed by
an Authorized Representative of the Borrower and shall
specify therein the date of prepayment, which date shall be
not less than thirty-five days nor more than ninety days from
the date the notice is mailed. A duplicate copy of any
written notice hereunder shall also be filed with the
Authority.
Section 8.3. Mandatory Prepayment on Taxability. The
Borrower shall pay or cause the prepayment of its loan
obligation, in whole or in part or by series of Bonds,
following a Determination of Taxability in the manner provided
in Section 6.3 of this Agreement.
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ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Moneys received from the sale
of the Bonds and all loan payments made by the Borrower and all
other moneys received by the Authority or the Trustee under the
Financing Documents shall be applied solely and exclusively in
the manner and for the purposes expressed and specified in the
Indenture and in the Bonds and as provided in this Agreement.
(B) The Borrower shall have and may exercise all the
rights, powers and authority given the Borrower in the Indenture
and in the Bonds, and the Indenture and the Bonds shall not be
modified, altered or amended in any manner which adversely
affects such rights, powers and authority or otherwise
adversely affects the Borrower without the prior written
consent of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders.
The Authority and the Borrower agree that this Agreement is
executed in part to induce the purchase by others of the Bonds
and for the further securing of the Bonds, and accordingly that
all covenants and agreements on the part of the Authority and
the Borrower as to the amounts payable with respect to the
Bonds and the Mortgage Bond hereunder are hereby declared to be
for the benefit of the holders from time to time of the Bonds
and may be enforced as provided in the Indenture on behalf of
the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force
majeure either party hereto shall be rendered unable wholly or
in part to carry out its obligations under this Agreement, then
except as otherwise expressly provided in this Agreement, if
such party shall give notice and full particulars of such force
majeure in writing to the other party within a reasonable time
after occurrence of the event or cause relied on, the
obligations of the party giving such notice, other than the
obligation of the Borrower to make the payments required under
the terms hereof or of the Note, so far as they are affected by
such force majeure, shall be suspended during the continuance
of the inability then claimed which shall include a reasonable
time for the removal of the effect thereof, but for no longer
period, and such parties shall endeavor to remove or overcome
such inability with all reasonable dispatch. The term "force
majeure", as employed herein, means acts of God, strikes,
lockouts or other industrial disturbances, acts of the public
enemy, orders of any kind of the Government of the United
States, of the State or any civil or military authority,
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insurrections, riots, epidemics, landslides, lightning,
earthquakes, volcanoes, fires, hurricanes, tornadoes, storms,
floods, washouts, droughts, arrests, restraining of
government and people, civil disturbances, explosions,
partial or entire failure of utilities, shortages of labor,
material, supplies or transportation, or any other similar or
different cause not reasonably within the control of the
party claiming such inability. It is understood and agreed
that the settlement of existing or impending strikes, lockouts
or other industrial disturbances shall be entirely within the
discretion of the party having the difficulty and that the
above requirements that any force majeure shall be reasonably
beyond the control of the party and shall be remedied with
all reasonable dispatch shall be deemed to be fulfilled even
though such existing or impending strikes, lockouts and other
industrial disturbances may not be settled and could have
been settled by acceding to the demands of the opposing
person or persons.
Section 9.4. Amendments. This Agreement may be amended
only with the concurring written consent of the Trustee and, if
required by the Indenture, of the owners of the Bonds given in
accordance with the provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall
be deemed given when delivered or when mailed by registered or
certified mail, postage prepaid, addressed as follows: if to
the Authority, at 845 Brook Street, Rocky Hill, Connecticut
06067, Attention: Program Manager - Loan Administration; if to
the Borrower, 835 Main Street, Bridgeport, Connecticut 06601,
Attention: Treasurer; and if to the Trustee, at 999 Broad
Street, Bridgeport, Connecticut 06604, Attention: Corporate
Trust Department. A duplicate copy of each notice, certificate
or other communication given hereunder by either the Authority
or the Borrower to the other shall also be given to the
Trustee. The Authority, the Borrower and the Trustee may, by
notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or other
communications shall be sent.
Section 9.6. Prior Agreements Superseded. This Agreement,
together with all agreements executed by the parties
concurrently herewith or in conjunction with the sale of the
Initial Bonds, shall completely and fully supersede all other
prior understandings or agreements, both written and oral,
between the Authority and the Borrower relating to the lending
of money and the Project, including those contained in any
commitment letter executed in anticipation of the issuance of
the Initial Bonds.
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Section 9.7. Execution of Counterparts. This Agreement may
be executed simultaneously in several counterparts each of
which shall be an original and all of which shall constitute
but one and the same instrument.
Section 9.8. MBIA Requirements. (A) The Borrower shall give
Municipal Bond Investors Assurance Corporation ("MBIA") written
notice not less than two days prior to any regularly scheduled
payment date for principal or interest on the Bonds if the
Borrower does not intend or will be unable to make the
corresponding payment to the Trustee under the Indenture.
(B) The Borrower or the Authority, as appropriate,
shall furnish to MBIA a copy of any notice that is required
to be given to a Bondholder, the Trustee, the Authority or the
Borrower pursuant to this Agreement.
(C)While either or both of the Municipal Bond
Insurance Policies (as defined in the Indenture) are in effect,
the Borrower shall not mortgage any of its real property or
issue any additional indebtedness secured by the Mortgage
unless the Bonds are equally and ratably secured thereby. The
provisions of the Mortgage which subject after-acquired
property to the terms of the Mortgage shall not constitute a
violation of this subsection (C).
IN WITNESS WHEREOF, the Authority has caused this Agreement
to be executed in its corporate name by a duly Authorized
Representative, and the Borrower has caused this Agreement to
be executed in its corporate name by its duly authorized
officer all as of the date first above written.
Connecticut Development Authority
By /s/Stanley R. Killinger
-----------------------------
Name: Stanley R. Killinger
Authorized Representative
Bridgeport Hydraulic Company
By /s/Janet M. Hansen
----------------------------
Name: Janet M. Hansen
Title: Vice President - Finance
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APPENDIX A
Bridgeport Hydraulic Company
PROMISSORY NOTE
No. 1 $17,700,000.00
Bridgeport Hydraulic Company, a corporation organized and
existing under the laws of the State of Connecticut (the
"Borrower"), for value received, hereby promises to pay to the
order of the Connecticut Development Authority (the
"Authority"), the principal sum of $17,700,000.00 together with
interest on the unpaid principal balance thereof from the date
hereof until fully and finally paid, together with all taxes
levied or assessed on this Note or the debt evidenced hereby
against the holder hereof. This Note shall bear interest at
the rates of interest borne by, and prinicpal, premium and
interest shall be payable at the times and in the amounts
specified in, each of the respective Series of the Initial
Bonds referred to below, but only to the extent that said
Series of Bonds is issued and outstanding.
This Note has been executed under and pursuant to a Loan
Agreement dated as of November 1, 1993 between the Authority
and the Borrower (the "Agreement"). This Note is issued to
evidence the obligation of the Borrower under the Agreement to
repay the loan made by the Authority from the proceeds of its
$7,700,000 Water Facilities Refunding Revenue Bonds (Bridgeport
Hydraulic Company Project - 1993C Series) and its $10,000,000
Water Facilities Refunding Revenue Bonds (Bridgeport Hydraulic
Company Project - 1994A Series) (the "Initial Bonds"), together
with interest thereon and all other amounts, fees, penalties,
premiums, adjustments, expenses, counsel fees and other
payments of any kind required to be paid by the Borrower under
the Agreement. The Agreement includes provision for mandatory
and optional prepayment of this Note as a whole or in part.
The Agreement further provides for the payment of interest on
this Note at other rates in certain circumstances, including
the payment of a Premium in the event of Determination of
Taxability, as more fully described in Section 6.3 thereof.
Advances made pursuant to Section 6.2 of the Agreement shall
bear interest at the rate specified in accordance therewith.
The Agreement and this Note (hereinafter collectively
referred to as the "Financing Documents") have been assigned to
The Chase Manhattan Bank of Connecticut, N.A. (the "Trustee")
acting pursuant to an Indenture of Trust dated as of
November 1, 1993 (the "Indenture") between the Authority and
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the Trustee. Such assignment is made as security for the
payment of the Initial Bonds and any Additional Bonds issued
by the Authority pursuant to the Indenture.
As provided in the Agreement and subject to the provisions
thereof, payments hereon are to be made at the principal office
of the Trustee in Bridgeport, Connecticut, or at the office
designated for such payment by any successor trustee in an
amount which, together with other moneys available therefor
pursuant to the Indenture, will equal the amount payable as
principal or Redemption Price, if any, of and interest on the
Initial Bonds outstanding under the Indenture on each such due
date.
The Borrower shall make payments on this Note on the dates
and in the amounts specified herein and in the Agreement and in
addition shall make such other payments as are required
pursuant to the Financing Documents, the Indenture and the
Bonds. Upon the occurrence of an Event of Default, as defined
in any of the Financing Documents, the principal of and
interest on this Note may be declared immediately due and
payable as provided in the Agreement. Upon any such
declaration the Borrower shall pay all cost, disbursements,
expenses and reasonable counsel fees of the Authority and the
Trustee in seeking to enforce their rights under any of the
Financing Documents.
THE BORROWER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS
NOTE IS A COMMERCIAL TRANSACTION AND WAIVES ITS RIGHTS TO
NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR
FEDERAL LAW WITH RESPECT TO ANY PREJUDGEMENT REMEDY WHICH THE
HOLDER HEREOF MAY DESIRE TO USE. The Borrower further (1)
waives diligence, demand, presentment for payment, notice of
nonpayment, protest and notice of protest, notice of any
renewals or extension of this Note, and all rights under any
statute of limitations, (2) agrees that the time for payment of
this Note may be changed and extended at the sole discretion of
the Trustee without impairing its liability hereon, and (3)
consents to the release of all or any part of the security for
the payment thereof at the discretion of the Trustee or the
release of any party liable for this obligation without
affecting the liability of the other parties hereto. Any delay
on the part of the Authority or the Trustee in exercising any
right hereunder shall not operate as a waiver of any such
right, and any waiver granted with respect to one default shall
not operate as a waiver in the event of any subsequent default.
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IN WITNESS WHEREOF, Bridgeport Hydraulic Company has caused
this Note to be executed in its corporate name by its duly
authorized officer, all as of November 1, 1993.
Bridgeport Hydraulic Company
By:_________________________
Name:
Authorized Representative
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AUTHORITY ENDORSEMENT
Pay to the order of The Chase Manhattan Bank of Connecticut,
N.A., as Trustee, without recourse.
Connecticut Development Authority
By: _____________________________
Name:
Authorized Representative
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APPENDIX B
Description of Project Realty
APPENDIX C
Description of Project Equipment
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