EXHIBIT 4.3.7
EXECUTION COPY
SERIES C LOAN AND TRUST AGREEMENT
among
BUSINESS FINANCE AUTHORITY OF
THE STATE OF NEW HAMPSHIRE
and
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
Dated as of October 1, 2001
Providing for the Issue of:
$108,985,000 Business Finance Authority
of the State of New Hampshire
5.45% Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 2001 Tax-Exempt Series C)
TABLE OF CONTENTS
ARTICLE I. INTRODUCTION AND DEFINITIONS 1
Section 101. Description of the Agreement and the Parties 1
Section 102. Definitions 2
(a) Words 2
(b) Number and Gender 5
(c) Use of Examples 5
ARTICLE II. LOAN OF BOND PROCEEDS; THE ASSIGNMENT AND PLEDGE 5
Section 201. Loan of Bond Proceeds; Issue of First Mortgage Bonds 5
Section 202. Assignment and Pledge of the Authority 6
Section 203. Further Assurance 6
Section 204. Defeasance 7
ARTICLE III. THE BORROWING 8
Section 301. The Bonds 8
(a) Issue, Authentication and Form of Bonds 8
(b) Details of the Bonds 15
(c) Cancellation and Destruction of Bonds 15
(d) Replacement Bonds 15
(e) Registration of Bonds in the Book-Entry Only System 16
(f) Paying Agent 17
(g) Interest on Overdue Principal 17
Section 302. Application of Bond Proceeds 18
Section 303. Bond Fund 18
Section 304. Application of Moneys 18
Section 305. Payments by the Company 18
(a) Debt Service 19
(b) Additional Payments 19
(c) Unclaimed Moneys 19
(d) Rebate 19
Section 306. Unconditional Obligation 19
Section 307. Redemption of the Bonds 20
(c) Notice to the Trustee 21
(d) Payment of Redemption Price and Accrued Interest 21
(e) Notice of Redemption 21
Section 308. Investments 21
Section 309. Tax Status of Bonds 24
Section 310. Payment Procedure Pursuant to Bond Insurance Policy 24
Section 311. The Bond Insurer 26
ARTICLE IV. THE PROJECT 26
Section 401. Company not to Impair Tax Status; Use of Project Facilities 26
Section 402. Qualification of Project Facilities 26
Section 403. Reserved 26
Section 404. Reserved 26
Section 405. Disposition and Use of Project Facilities 27
ARTICLE V. ADDITIONAL COVENANTS OF THE COMPANY 27
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Section 501. Existence and Good Standing; Merger; Consolidation; Notice
to Trustee 27
Section 502. Indemnification by the Company 27
Section 503. Continuing Disclosure 28
ARTICLE VI. DEFAULT AND REMEDIES 28
Section 601. Default 28
Section 602. Remedies for Events of Default 29
(a) Acceleration 29
(b) Rights as a Secured Party 29
Section 603. Court Proceedings 30
Section 604. Revenues after Default 30
Section 605. Rights of Bondowners 30
Section 606. Performance of Company's Obligations 31
Section 607. Remedies Cumulative; No Waiver 31
Section 608. Rights of Bond Insurer 31
ARTICLE VII. THE TRUSTEE 31
Section 701. Corporate Organization, Authorization and Capacity 31
Section 702. Rights and Duties of the Trustee 31
(a) Moneys to be Held in Trust 31
(b) Accounts 32
(c) Performance of the Authority's Obligations 32
(d) Responsibility 32
(e) Limitations on Actions 32
(f) Financial Obligations 33
(g) Registration Books 33
(h) Ownership of Bonds 33
(i) No Surety Bond 33
(j) Requests by the Company 33
(k) Trustee as Holder of Series K First Mortgage Bonds 34
Section 703. Fees and Expenses of the Trustee 34
Section 704. Resignation or Removal of Trustee 34
Section 705. Successor Trustee 34
ARTICLE VIII. THE AUTHORITY 35
Section 801. Limited Obligation 35
Section 802. Rights and Duties of the Authority 35
(a) Remedies of the Authority 35
(b) Limitations on Actions 36
(c) Responsibility 36
Section 803. Expenses of the Authority 37
Section 804. Matters to be Considered by Authority 37
Section 805. Actions by Authority 37
ARTICLE IX. THE BONDOWNERS 37
Section 901. Action by Bondowners 37
ARTICLE X. AMENDMENTS AND MISCELLANEOUS 39
Section 1001. Amendments 39
-ii-
(a) Without Bondowners' Consent 39
(b) With Bondowners' Consent 39
Section 1002. Notices 40
Section 1003. Agreement Not for the Benefit of Other Parties 40
Section 1004. Severability 40
Section 1005. Counterparts 40
Section 1006. Captions 40
Section 1007. Governing Law 40
Section 1008. Payment Date Not a Business Day 41
EXHIBIT A THE PROJECT FACILITIES A-1
EXHIBIT B SERIES C SEABROOK POLLUTION CONTROL FACILITIES AGREEMENT B-1
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ARTICLE I. INTRODUCTION AND DEFINITIONS
Section 101. Description of the Agreement and the Parties. This SERIES C
LOAN AND TRUST AGREEMENT (the "Agreement") is entered into as of October 1, 2001
by the Business Finance Authority of the State of New Hampshire (with its
successors, the "Authority" and formerly The Industrial Development Authority of
the State of New Hampshire), a body corporate and politic created under New
Hampshire RSA 162-A:3; Public Service Company of New Hampshire (with its
successors, the "Company"), a New Hampshire corporation; and State Street Bank
and Trust Company, a Massachusetts trust company, as Trustee (with its
successors, the "Trustee"). This Agreement is a financing document combined with
a security document as one instrument in accordance with New Hampshire RSA
Chapter 162-I (the "Act") and relates to industrial facilities as defined in
Paragraphs 2, VII(d) and (e) of the Act and located in the Town of Seabrook,
Rockingham County, New Hampshire.
This Agreement provides for the following transactions:
(a) the Authority's issue of the Bonds;
(b) the Authority's loan of the proceeds of the Bonds to the Company to
refund the outstanding balance of the Authority's $108,985,000 7 1/2%Pollution
Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991
Tax-Exempt Series B) (the "1991 Series B Bonds") which in turn were issued to
refund a portion of (i) the Authority's $100,000,000 Pollution Control Revenue
Bonds 1986 Series A (Public Service Company of New Hampshire Project) (the "1986
Bonds") and (ii) the Authority's $20,000,000 Pollution Control Revenue Bonds,
1983 Series A (Public Service Company of New Hampshire Project) (the "1983
Bonds"), which 1986 Bonds and 1983 Bonds were originally issued for the purpose
of financing the acquisition, construction and installation of the Project
Facilities;
(c) the Company's repayment of the loan of Bond proceeds from the
Authority through payment to the Trustee of all amounts necessary to pay the
Bonds issued by the Authority;
(d) the Company's agreement to evidence and secure its repayment
obligations hereunder by the issuance of the Series K First Mortgage Bonds; and
(e) the Authority's assignment to the Trustee in trust for the benefit and
security of the Bondowners of the Authority's rights in respect of the loan to
the Company hereunder, including repayment of the loan to be received from the
Company.
In consideration of the mutual promises contained in this Agreement, the
rights conferred and the obligations assumed hereby, and other good and valuable
consideration, the receipt of which is hereby acknowledged, each of the Company,
the Authority and the Trustee agree, assign, covenant, grant, pledge, promise,
represent and warrant as set forth herein for their own benefit and for the
benefit of the Bondowners.
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Section 102. Definitions.
(a) Words. In addition to terms defined elsewhere herein, the following
terms have the following meanings in this Agreement, unless the context
otherwise requires:
(i) "Act" has the meaning set forth in Section 101.
(ii) "Authority's Service Charge" means payment to the Authority for
its own use of .375% of the principal amount of the Bonds payable on the
date of the issue of the Bonds and an additional .375% of the then
Outstanding principal balance of the Bonds payable on the date which is
three years from the date of the issue of the Bonds.
(iii) "Bond Counsel" means Palmer & Dodge LLP or such other
nationally recognized bond counsel selected by the Company and reasonably
satisfactory to the Trustee and the Bond Insurer.
(iv) "Bond Fund" means the fund established under Section 303.
(v) "Bond Insurance Agreement" means the Reimbursement and Indemnity
Agreement dated as of December 19, 2001, between the Company and the Bond
Insurer.
(vi) "Bond Insurance Policy" means the financial guaranty insurance
policy issued by the Bond Insurer insuring the payment when due of the
principal of and interest on the Bonds as provided therein.
(vii) "Bond Insurer" means MBIA Insurance Corporation, a New York
stock insurance company.
(viii) "Bond Insurer Default" has the meaning defined in Section
608(b).
(ix) "Bond Insurer Event of Insolvency" means the institution of a
proceeding in a court having jurisdiction in the premises seeking an order
for relief, rehabilitation, reorganization, conservation, liquidation or
dissolution in respect of the Bond Insurer and the continuance of such
proceeding for a period of sixty (60) consecutive days or such court
enters an order granting the relief sought in such proceeding and such
order is not reversed or action thereunder stayed within sixty (60) days
of such entry.
(x) "Bondowners", "owners" or words of similar import means the
registered owners of the Bonds from time to time as shown in the books
kept by the Trustee as bond registrar, except that wherever appropriate
the term "owners" shall mean the owners of the Bonds for federal income
tax purposes.
(xi) "Bonds" means the 5.45% $108,985,000 principal amount of the
Business Finance Authority of the State of New Hampshire Pollution Control
Revenue Bonds (Public Service Company of New Hampshire Project - 2001
Tax-Exempt Series C) dated
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as of December 1, 2001 substantially in the form set forth in Subsection
301(a) and any bond or bonds duly issued in exchange or replacement
therefor.
(xii) "Book-Entry Only System" means the system of registration of
the Bonds described in Subsection 301(e).
(xiii) "Company Representative" means the person or persons at the
time designated to act on behalf of the Company in a written certificate
(or any alternate or alternates at the time so designated) furnished to
the Trustee, containing the specimen signature of such person or persons
and signed on behalf of the Company by its Chairman, Vice Chairman,
President, Chief Financial Officer, Treasurer, any Assistant Treasurer, or
any Vice President.
(xiv) "Continuing Disclosure Agreement" means the Continuing
Disclosure Agreement between the Company and the Trustee dated the date of
issuance and delivery of the Bonds as originally executed and as it may be
amended from time to time in accordance with its terms.
(xv) "Debt Service" means all money payable to the Bondowners in
accordance with the terms hereof and of the Bonds including (i) principal,
(ii) interest and (iii) any premium.
(xvi) "Default" has the meaning given such term in Section 601.
(xvii) "Event of Default" has the meaning given such term in Section
601.
(xviii) "Facilities Agreement" has the meaning given to it in
Section 405.
(xix) "Federal Tax Statement" means the Statement as to Tax Exempt
Status of Bonds executed by the Company in connection with the original
issuance of the Bonds and delivered to the Trustee.
(xx) "First Mortgage Bond Indenture" means the First Mortgage
Indenture dated as of August 15, 1978, as amended, and the Twelfth
Supplemental Indenture thereto dated as of December 1, 2001 between the
Company and First Union National Bank, successor to First Fidelity Bank,
National Association, New Jersey, as Trustee, as amended and supplemented
from time to time.
(xxi) "First Mortgage Bond Trustee" means the trustee under the
First Mortgage Bond Indenture.
(xxii) "IRC" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
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(xxiii) "Loan" has the meaning given such term in Section 201.
(xxiv) "MBIA" means MBIA Insurance Corporation, the principal
operating subsidiary of MBIA Inc., a New York Stock Exchange listed
company, as Bond Insurer.
(xxv) "1954 Code" means the Internal Revenue Code of 1954, as
amended, as applicable to the Bonds and the Project Facilities.
(xxvi) "NAEC" means North Atlantic Energy Corporation, a New
Hampshire corporation and an affiliate of the Company.
(xxvii) "Outstanding", when used to modify Bonds, refers to Bonds
issued, authenticated, and delivered under this Agreement, excluding: (i)
Bonds which have been exchanged or replaced; (ii) Bonds which have been
paid; (iii) Bonds which have become due and for the payment of which
moneys have been duly provided; and (iv) Bonds with respect to which this
Agreement has been defeased pursuant to Section 204.
(xxviii) "Paying Agent" means State Street Bank and Trust Company,
as Paying Agent under this Agreement, and its successors in such capacity.
(xxix) "Permitted Investments" has the meaning given such term in
Section 308.
(xxx) The word "person" means any individual or entity so recognized
by law.
(xxxi) "Project Costs" means the Company's cost of acquisition or
construction and installation of the Project Facilities which are "project
costs" within the meaning of Paragraph 2, IX of the Act, including, but
not limited to, the cost of issuing the Bonds, obtaining professional and
advisory services, and certain interest on the Bonds, which may be paid
from Bond proceeds pursuant to the Act.
(xxxii) "Project Facilities" means the Company's former ownership
share of the sewage or solid waste disposal and air or water pollution
control facilities at the Station as of the date of issuance of the Bonds
described generally in the attached Exhibit A.
(xxxiii) "Refunding Trust Agreement" means the Refunding Trust
Agreement among the Authority, the Company and State Street Bank and Trust
Company, as trustee for the 1991 Series B Bonds, dated as of October 1,
2001.
(xxxiv) "Seabrook Transfer" means each of the transfer by the
Company of its interest in the Station (including the Project Facilities)
to NAEC as of June 5, 1992, the proposed transfer of such interest to an
unaffiliated party pursuant to an order of the New Hampshire Public
Utilities Commission and any subsequent transfer of such interest.
(xxxv) "Seabrook Transferee" means each of NAEC, any subsequent
owner or owners of the Project Facilities pursuant to a Seabrook Transfer,
and its or their
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successors.
(xxxvi) "Series K First Mortgage Bonds" means the $108,985,000 in
aggregate principal amount 5.45% First Mortgage Bonds, Series K issued by
the Company and delivered to the Trustee pursuant to Section 201 of this
Agreement and the First Mortgage Bond Indenture to evidence and secure the
Company's obligation to repay the Loan.
(xxxvii) "Station" means Unit No. 1 of the nuclear electric
generating plant located in Seabrook, New Hampshire, of which the Company
is a joint owner.
(xxxviii) "Trustee" means the State Street Bank and Trust Company,
as trustee under this Agreement and its successors in such capacity.
(xxxix) "UCC" means the New Hampshire Uniform Commercial Code (New
Hampshire Revised Statutes Annotated Chapter 382-A).
Except in the Bonds, "here" in such words as "hereby," "herein," "hereof"
or "hereunder" means this Agreement as a whole rather than the particular
section, subsection, paragraph, subparagraph, clause or subclause in which the
word appears; and in the Bonds it refers thereto.
(b) Number and Gender. Wherever appropriate (1) the singular and plural
forms of words and (2) words of different gender shall, within those respective
classifications, be deemed interchangeable.
(c) Use of Examples. When a condition, class, category, circumstance or
other concept is described in general terms herein and a list of possible
examples or components of what has been described generally is associated with
that description, and regardless of whether the words "include" or "including"
or the like are also used, the listing shall be deemed illustrative only and
shall not be construed as excluding other possible examples or components or as
otherwise limiting the generality of the description in any way.
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ARTICLE II. LOAN OF BOND PROCEEDS; THE ASSIGNMENT AND PLEDGE
Section 201. Loan of Bond Proceeds; Issue of First Mortgage Bonds. The
Authority shall issue the Bonds pursuant to the Act in the amount, in the form,
and with the terms provided herein, and shall loan to the Company such amount
(the "Loan") to refinance Project Costs as hereinafter provided. The Company
agrees to repay the Loan of the aggregate principal amount of the Bonds in the
amounts and at the times necessary to pay principal of, premium, if any, and
interest on the Bonds by making the payments required under Section 305, and to
evidence and secure the Company's obligation to do so, the Company shall issue
and deliver to the Trustee a like aggregate principal amount of its Series K
First Mortgage Bonds in the form set forth in the First Mortgage Bond Indenture.
Upon payment of the principal of and premium, if any, on any of the Bonds and
payment of all accrued interest in connection therewith, whether at maturity or
prior to maturity by redemption or otherwise, or upon provision for the payment
thereof having been made in accordance with Section 204, Series K First Mortgage
Bonds in an aggregate principal amount equal to the aggregate principal amount
of the Bonds so paid, or for the payment of which such provision has been made,
shall be deemed fully paid and the obligations of the Company thereunder
terminated as provided in the First Mortgage Indenture and shall be surrendered
by the Trustee to the First Mortgage Bond Trustee for cancellation. The Trustee
shall promptly notify the First Mortgage Bond Trustee by telephone, confirmed in
writing, of any default in the payment of principal of, and premium, if any, and
interest on the Bonds, and shall promptly notify the First Mortgage Bond Trustee
by telephone, confirmed in writing of any payment of principal of and premium,
if any, and interest (other than payment of regularly scheduled interest) on the
Bonds, or if the Bonds have been paid or deemed paid, defeased, redeemed,
retired, surrendered or canceled. In accordance with the terms thereof, the
Series K First Mortgage Bonds shall be issued to and registered in the name of
the Trustee and shall not be sold, assigned, pledged or transferred, except to
effect transfer to any successor Trustee hereunder. The Series K First Mortgage
Bonds shall have a principal amount, an interest rate, a maturity date and
redemption provisions corresponding to the Bonds. Payments of principal of and
premium, if any, and interest on the Series K First Mortgage Bonds shall upon
receipt by the Trustee be deemed to constitute payments of corresponding amounts
by the Company in respect of the Bonds pursuant to Subsection 305(a).
Section 202. Assignment and Pledge of the Authority. The Authority, for
consideration paid as hereinabove acknowledged, hereby irrevocably assigns and
pledges to the Trustee in trust for the security of the Bondowners upon the
terms hereof all of the Authority's right, title and interest in (i) respect of
the Loan and all payments thereon, (ii) all moneys and securities held by the
Trustee for deposit in, or deposited in, the Bond Fund and investment earnings
thereon, (iii) the Series K First Mortgage Bonds, all bonds issued in
replacement thereof or in exchange or substitution therefor and all payments on,
and proceeds of, the foregoing, and (iv) any collateral security for, and all
proceeds of, any of the foregoing. The Trustee shall hold (a) all the rights,
title and interest received under this section and (b) all payments (exclusive
of funds to which the Trustee is entitled in its own right as fees,
reimbursement, indemnity or otherwise) received from the Company or derived from
the exercise of the Authority's powers hereunder (which shall include all
payments under Subsection 305(a)) and in respect of the Series K First Mortgage
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Bonds in trust for the security of the Bondowners in accordance with the
provisions hereof.
Section 203. Further Assurance. The Company and the Authority shall from
time to time execute, deliver and record and file such instruments as may be
necessary to perfect or to maintain or continue the perfection of, or as the
Trustee may reasonably require to confirm, perfect or maintain, the security
created hereby and the assignment and pledge of rights hereunder.
Section 204. Defeasance. When there are in the Bond Fund sufficient funds,
or non-callable and non-prepayable obligations issued by, or the full and timely
payment of which are guaranteed by, the United States, in such principal amount,
bearing interest at such rates and with such maturities as will provide, without
reinvestment, sufficient amounts to pay principal of, premium, if any, and
interest on the Bonds in full as and when such amounts become due, as determined
through a verification report or computation, which may be prepared by the
Company, and when all the rights hereunder of the Authority and the Trustee have
been provided for (1) the Bondowners will cease to be entitled to any right,
benefit or security under this Agreement except the right to receive payment of
the funds deposited and held for payment and other rights set forth below or
which by their nature cannot be satisfied prior to or simultaneously with
termination of the lien hereof, (2) the security interests created by this
Agreement (except in such funds and investments) shall terminate, and (3) the
Authority and the Trustee shall execute and deliver such instruments as may be
necessary to discharge the lien and security interests created hereunder;
provided, however, that, if within ninety (90) days of such deposit, the Bonds
are not to be redeemed in full prior to maturity or paid in full at maturity,
the Trustee and the Bond Insurer shall have received on the date of the deposit
an opinion of Bond Counsel to the effect that such deposit and the investment
thereof will not affect the exclusion of interest on the Bonds from gross income
of the owners thereof for federal income tax purposes; and provided further that
if any Bonds are to be redeemed prior to the maturity thereof, such Bonds shall
have been duly called for redemption or irrevocable instructions for such a call
shall have been given to the Trustee. Upon such defeasance, the funds and
investments required to pay or redeem the Bonds in full shall be irrevocably set
aside for such purpose. The Trustee shall cause to be mailed to all Bondowners
within fifteen (15) days of the conditions of this section being met in the
manner herein specified for redemption of Bonds a notice stating that such
conditions have been met and that the lien of this Agreement has been
discharged, and, if the Bonds are to be redeemed prior to maturity, specifying
the date of redemption and the redemption price. Any funds or property held by
the Trustee for payment of the Bonds under this section and not required for
such payment shall (unless there is an Event of Default hereunder, in which case
they shall be applied as provided in Section 604), after satisfaction of all the
rights of the Authority and the Trustee, and payment of the rebate, if any, due
to the United States under IRC ss.148(f), and upon such indemnification, if any,
as the Authority or the Trustee may reasonably require, be distributed to the
Company. If Bonds are not presented for final payment when due and moneys are
available in the hands of the Trustee therefor, the Trustee shall, without
liability for interest thereon, continue to hold the moneys held for that
purpose subject to Subsection 305(c), and interest shall cease to accrue on the
principal amount represented thereby.
When there are in the Bond Fund funds or securities as described in the
preceding
7
paragraph as are sufficient to pay principal of, premium, if any, and interest
on, some but not all of the Bonds in full as and when such amounts become due
and all of the other conditions in the preceding paragraph have been met with
respect to such Bonds, the particular Bonds (or portions thereof) for which such
provision for payment shall have been considered made shall be selected by lot
by the Trustee (or, if the Bonds are then registered to CEDE & CO. and the
Book-Entry Only System is then in effect, by The Depository Trust Company) and
thereupon the Trustee and the Authority shall take similar action to release the
security interests created by this Agreement in respect of such Bonds (except in
such funds or securities and investments thereon), subject however to compliance
with the applicable conditions set forth in the provisos above.
Notwithstanding the foregoing, those provisions relating to the maturity
of Bonds, interest payments and dates thereof and the Trustee's remedies with
respect thereto, and provisions relating to exchange, transfer and registration
of Bonds, replacement and cancellation of Bonds, the holding of moneys in trust
and the duties of the Trustee in connection with all of the foregoing and the
fees, expenses and indemnities of the Trustee and the Authority, shall remain in
full force and effect and shall be binding upon the Trustee, the Authority, the
Company and the Bondowners notwithstanding the release and discharge of this
Agreement and the lien on the Series K First Mortgage Bonds until the Bonds have
been actually paid in full.
Notwithstanding anything herein to the contrary, if moneys or governmental
obligations have been deposited or set aside with the Trustee pursuant to the
provisions of this Section 204 and the principal of, premium, if any, and
interest on the Bonds shall not, in fact, have been actually paid in full, no
amendment to the provisions of this Section 204 will be made without the consent
of the owner of each of the Bonds affected thereby.
Subject to Subsection 608(b), the prior written consent of the Bond
Insurer, which consent shall not be unreasonably withheld, shall be required for
defeasance of the Bonds.
Notwithstanding anything herein to the contrary, in the event that the
principal and/or interest due on the Bonds shall be paid by the Bond Insurer
pursuant to the Bond Insurance Policy, the Bonds shall remain Outstanding for
all purposes, not be defeased or otherwise satisfied and not be considered paid
by the Company, and the assignment and pledge hereunder and all covenants,
agreements and other obligations of the Company to the registered owners of the
Bonds shall continue to exist and shall run to the benefit of the Bond Insurer,
and the Bond Insurer shall be subrogated to the rights of such Bondowners.
ARTICLE III. THE BORROWING
Section 301. The Bonds.
(a) Issue, Authentication and Form of Bonds. Upon written direction of the
Authority, the Trustee will authenticate and deliver the Bonds in substantially
the following form:
$ No. R-
8
United States of America
State of New Hampshire
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
5.45% Pollution Control Revenue Bond
(Public Service Company of New Hampshire Project
2001 Tax-Exempt Series C)
DATE OF THIS BOND: December 1, 2001
(date as of which bonds of this series were initially issued)
REGISTERED OWNER: CEDE & CO.
INTEREST RATE: 5.45% per annum
MATURITY DATE: May 1, 2021
PRINCIPAL AMOUNT: DOLLARS
INTEREST PAYMENT DATES: (May 1 and November 1 commencing May 1, 2002)
CUSIP: 64468C AV 6
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW
HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW HAMPSHIRE
RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY FROM THE SOURCES
PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW, AND NO PUBLIC FUNDS
MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the
"Authority"), for value received, promises to pay to the REGISTERED OWNER, or
registered assigns, but solely from the moneys to be provided under the
Agreement mentioned below, upon presentation and surrender hereof, in lawful
money of the United States of America, the PRINCIPAL AMOUNT on the MATURITY
DATE, unless paid earlier as provided below, with interest (computed on the
basis of a 360-day year consisting of twelve 30-day months) from the most recent
INTEREST PAYMENT DATE to which interest has been paid or duly provided for or,
if no interest has been paid, from the DATE OF THIS BOND, at the INTEREST RATE
per annum, payable semiannually on the INTEREST PAYMENT DATES, until the date on
which this bond becomes due, whether at maturity, upon redemption, by
acceleration or otherwise. From and after that date, any unpaid principal will
bear interest at the same rate until paid or duly provided for. The
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principal of and premium, if any, on this bond are payable upon presentation and
surrender of this bond at the corporate trust office of State Street Bank and
Trust Company, as Trustee (with its successors, the "Trustee") in Boston,
Massachusetts, or such other address as the Trustee may designate in writing to
the REGISTERED OWNER, unless this bond is in the Book-Entry Only System (as
defined in the Agreement) in which case payment shall be by wire or bank
transfer of immediately available funds within the continental United States.
Interest is payable by check or draft mailed on the INTEREST PAYMENT DATE by the
Trustee to the REGISTERED OWNER of this bond, determined as of the close of
business on the applicable record date, at its address as shown on the
registration books kept by the Trustee unless this bond is in the Book-Entry
Only System, in which case interest is payable by wire or bank transfer of
immediately available funds within the continental United States. If any
payment, redemption or maturity date for principal, premium or interest shall be
(i) a Sunday or a legal holiday, or (ii) a day on which banking institutions are
authorized pursuant to law to close and on which the corporate trust office of
the Trustee or the First Mortgage Bond Trustee is not open for business, then
the payment thereof may be made on the next succeeding day not a day specified
in (i) or (ii) with the same force and effect as if made on the specified
payment date and no interest shall accrue for the period after the specified
payment date.
The record date for payment of interest is the fifteenth day of the month
preceding the date on which the interest is to be paid, provided that, with
respect to payment of overdue interest or interest payable on redemption of this
bond other than on an INTEREST PAYMENT DATE or interest on any overdue amount,
the Trustee may establish a special record date. The special record date may be
not more than thirty (30) days before the date set for payment. The Trustee will
mail notice of a special record date to the registered owners of the Bonds at
least ten (10) days before the special record date. A certificate of the Trustee
shall conclusively establish the mailing of such notice for all purposes.
This bond is one of a series of 5.45% Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 2001 Tax-Exempt Series C)
(the "Bonds") in the aggregate principal amount of $108,985,000 issued under New
Hampshire Chapter RSA 162-I (the "Act"). The proceeds of the Bonds are being
loaned to Public Service Company of New Hampshire (the "Company"), a New
Hampshire corporation, pursuant to a Series C Loan and Trust Agreement (the
"Agreement") dated as of October 1, 2001 among the Company, the Authority and
the Trustee to refinance certain costs associated with the Company's prior
ownership interest in air or water pollution control and sewage or solid waste
disposal facilities installed for use by Unit No. 1 at the nuclear electric
generating station (the "Station") in Seabrook, New Hampshire (the "Project
Facilities"). Pursuant to the Agreement, the Company has unconditionally agreed
to repay such loan in the amounts and at the times necessary to pay the
principal of, premium, if any, and interest on the Bonds when due. To evidence
and secure such loan the Company has issued and delivered to the Trustee its
First Mortgage Bonds, Series K (the "Series K First Mortgage Bonds") issued
under the First Mortgage Indenture dated as of August 15, 1978, as amended, and
the Twelfth Supplemental Indenture thereto dated as of December 1, 2001 between
the Company and First Union National Bank, successor to First Fidelity Bank,
National Association, New Jersey, as Trustee (as amended and supplemented from
time to time, the "First Mortgage Bond Indenture") in an aggregate principal
amount and with an
10
interest rate, maturity date and redemption provisions corresponding to those of
the Bonds. As provided in the Agreement, payments of principal of, and premium,
if any, and interest on the Series K First Mortgage Bonds shall, upon receipt by
the Trustee, be deemed to constitute payments in corresponding amounts by the
Company in respect of the Bonds. Reference is hereby made to the Agreement for
the provisions thereof with respect to the rights, limitations of rights,
duties, obligations and immunities of the Company, the Authority, the Trustee
and the Bondowners, including the order of payments in the event of insufficient
funds, the disposition of unclaimed moneys held by the Trustee and restrictions
on the rights of owners of the Bonds to bring suit. The Agreement may be amended
to the extent and in the manner provided therein. Copies of the Agreement are
available for inspection at the corporate trust office of the Trustee. Unless
otherwise defined herein, capitalized terms shall have the meanings given them
in the Agreement.
If an Event of Default (as defined in the Agreement) occurs and is
continuing, the Trustee may, and upon the written request of Bondowners of at
least 25% in principal amount of the Bonds outstanding shall, declare the
principal of all Bonds then outstanding and the interest accrued thereon
immediately due and payable in accordance with the Agreement. The Bondowners
shall have no right to institute any proceeding or pursue any other remedy to
enforce the Bonds or the covenants of the Company under the Agreement except as
provided therein.
The Bonds are subject to optional redemption prior to maturity on or after
May 1, 2012 at the option of the Company, as a whole or in part at any time, at
the following prices expressed as percentages of their principal amounts, plus
accrued interest to the redemption date:
Period During Which Redeemed Redemption Price
---------------------------- ----------------
May 1, 2012 through April 30, 2013 101%
May 1, 2013 and thereafter 100
The Bonds are subject to mandatory redemption at any time at a redemption
price of 100% of the principal amount of the Bonds so redeemed plus accrued
interest to the redemption date in the event (i) the Company delivers to the
Trustee an opinion of nationally recognized bond counsel selected by the Company
and reasonably satisfactory to the Trustee ("Bond Counsel") stating that
interest on the Bonds is or will become includable in gross income of the owners
thereof for federal income tax purposes, or (ii) it is finally determined by the
Internal Revenue Service or a court of competent jurisdiction, as a result of
(A) a proceeding in which the Company has participated or been given notice and
an opportunity to participate, and (B) either a failure by the Company or the
Seabrook Transferee (as defined in the Agreement) to observe any covenant or
agreement undertaken in or pursuant to the Agreement or a Seabrook Transfer (as
defined in the Agreement), or the inaccuracy of any representation made by the
Company or the Seabrook Transferee in or pursuant to the Agreement or a Seabrook
Transfer, that interest payable on the Bonds is includable for federal income
tax purposes in the gross income of any owner thereof (other than an owner which
is a "substantial user" or a "related person" within the meaning of Section
147(a) of the Internal Revenue Code of 1986). Any determination under
11
clause (ii) above will not be considered final for this purpose until the
earliest of the conclusion of any appellate review, the denial of appellate
review or the expiration of the period for seeking appellate review. Redemption
under this paragraph shall be in whole unless not later than forty-five (45)
days prior to the redemption date the Company delivers to the Trustee an opinion
of Bond Counsel reasonably satisfactory to the Trustee to the effect that a
redemption of less than all of the Bonds will preserve the tax-exempt status of
interest on the remaining Bonds outstanding subsequent to such redemption. Any
such redemption shall be made on the 60th day after the date on which the
opinion described in clause (i) is delivered or the determination described in
clause (ii) becomes final or on such earlier date as the Company may designate
by notice given to the Trustee at least forty-five (45) days prior to such
designated date. If such redemption shall occur in accordance with the terms of
the Agreement, then such failure by the Company or the Seabrook Transferee to
observe such covenant or agreement, or the inaccuracy of any such representation
will not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that (i)
such Bondowner has been notified in writing by the Internal Revenue Service that
it proposes to include the interest on the Bonds in the gross income of such
owner for federal income tax purposes, or any other proceeding has been
instituted against such owner which may lead to a like determination, and (ii)
such owner will afford the Company the opportunity to participate at its own
expense in the proceeding, either directly or in the name of such owner, until
the conclusion of any appellate review, and the Trustee has examined such
written notice and it appears to be accurate on its face, then the Trustee shall
promptly give notice thereof to the Company, the Authority, and each Bondowner
whose Bonds may be affected. The Trustee shall thereafter keep itself reasonably
informed of the progress of any administrative proceedings or litigation
relating to such notice. Under the Agreement the Company is required to give the
Trustee written notice of such a final determination within forty-five (45) days
of such final determination.
If less than all of the outstanding Bonds are to be called for redemption,
the Bonds or portions thereof to be redeemed will be selected by the Trustee by
lot or in any customary manner as determined by the Trustee in units of $5,000,
provided that for so long as CEDE & CO., as nominee of the Depository Trust
Company ("DTC"), is the REGISTERED OWNER and the Book-Entry Only System (as
defined in the Agreement) is in effect, the particular Bonds or portions thereof
to be redeemed shall be selected by DTC, in such manner as DTC may determine.
Notice of redemption of this bond will be given by first class mail,
postage prepaid, not more than forty-five (45) nor less than thirty (30) days
prior to the redemption date to the REGISTERED OWNER at its registered address.
Failure to mail notice to the owner of any other Bond or any defect in the
notice to such other owner shall not affect the redemption of this bond.
If the denomination of this bond exceeds five thousand dollars ($5,000),
portions of the principal sum in the amount of five thousand dollars ($5,000) or
any multiple thereof may be redeemed. If less than all of the principal amount
is to be redeemed, upon surrender of this bond
12
to the Trustee, there will be issued to the REGISTERED OWNER, without charge, a
new bond or bonds, at the option of the owner, for the unredeemed principal
amount.
Notice of redemption having been duly mailed, this bond, or the portion
called for redemption, will become due and payable on the redemption date at the
applicable redemption price and, moneys for the redemption having been deposited
with the Trustee, from and after the date fixed for redemption interest on this
bond (or such portion) will no longer accrue.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the corporate trust office of the
Trustee upon surrender of this bond to the Trustee for cancellation. Upon
transfer, a new bond or bonds of the same aggregate principal amount will be
issued to the transferee at the same office. This bond may also be exchanged at
the corporate trust office of the Trustee for a new bond or bonds in authorized
denominations of the same aggregate principal amount. Exchanges and transfers
will be without expense to the owner except for applicable taxes or other
governmental charges, if any. The Trustee will not be required to make an
exchange or transfer of this bond during the fifteen (15) days preceding any
date fixed for selection for redemption if this bond (or any part thereof) is
eligible to be selected or has been selected for such redemption.
The Bonds are issuable only in fully registered form in the denomination
of five thousand dollars ($5,000) or any multiple thereof.
The Authority, the Trustee and the Company may treat the REGISTERED OWNER
as the absolute owner of this bond for all purposes, notwithstanding any notice
to the contrary.
No director, officer, employee or agent of the Authority nor any person
executing this bond (by facsimile signature or otherwise) shall be personally
liable, either jointly or severally, hereon or be subject to any personal
liability or accountability by reason of the issuance hereof.
This bond shall not be valid until the Certificate of Authentication has
been signed by the Trustee.
BUSINESS FINANCE AUTHORITY OF
THE STATE OF NEW HAMPSHIRE
By:
Chairman
(Seal)
By:
Executive Director
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Certificate Of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: ____________________________________
Authorized Signer
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a policy containing
the following provisions, such policy being on file at the principal corporate
trust office of the Trustee (which on the date of this Bond is State Street Bank
and Trust Company, Boston, Massachusetts).
The Insurer, in consideration of the payment of the premium and subject to
the terms of this policy, hereby unconditionally and irrevocably guarantees to
any owner, as hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of the Issuer to
State Street Bank and Trust Company, or its successor, as Paying Agent for the
Bonds (the "Paying Agent") of an amount equal to (i) the principal of (either at
the stated maturity or by any advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on, the Obligations (as that term is defined
below) as such payments shall become due but shall not be so paid (except that
in the event of any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from default or
otherwise, other than any advancement of maturity pursuant to a mandatory
sinking fund payment, the payments guaranteed hereby shall be made in such
amounts and at such times as such payments of principal would have been due had
there not been any such acceleration); and (ii) the reimbursement of any such
payment which is subsequently recovered from any owner pursuant to a final
judgment by a court of competent jurisdiction that such payment constitutes an
avoidable preference to such owner within the meaning of any applicable
bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured Amounts."
"Obligations" shall mean:
$108,985,000
Business Finance Authority of the State of New Hampshire
5.45% Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 2001 Tax-Exempt Series C)
Upon receipt of telephonic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by
registered or certified mail, by the Insurer from the Paying Agent or any owner
of an Obligation the payment of an Insured Amount
14
for which is then due, that such required payment has not been made, the Insurer
on the due date of such payment or within one business day after receipt of
notice of such nonpayment, whichever is later, will make a deposit of funds, in
an account with State Street Bank and Trust Company, N.A., in New York, New
York, or its successor, sufficient for the payment of any such Insured Amounts
which are then due. Upon presentment and surrender of such Obligations or
presentment of such other proof of ownership of the Obligations, together with
any appropriate instruments of assignment to evidence the assignment of the
Insured Amounts due on the Obligations as are paid by the Insurer, and
appropriate instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to payment of
Insured Amounts on the Obligations, such instruments being in a form
satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and
Trust Company, N.A. shall disburse to such owners or the Paying Agent payment of
the Insured Amounts due on such Obligations, less any amount held by the Paying
Agent for the payment of such Insured Amounts and legally available therefor.
This policy does not insure against loss of any prepayment premium which may at
any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the Issuer,
or any designee of the Authority for such purpose. The term owner shall not
include the Issuer or any party whose agreement with the Issuer constitutes the
underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its
offices located at 113 King Street, Armonk, New York 10504 and such service of
process shall be valid and binding.
This policy is non-cancelable for any reason. The premium on this policy
is not refundable for any reason including the payment prior to maturity of the
Obligations.
This policy has been endorsed as follows:
It is further understood that this policy shall guarantee to the
owner or holder, as defined in the policy, the full and complete payments
required to be made by or on behalf of the Issuer if there occurs pursuant to
the terms of the Obligations an event which results in the loss of the tax
exempt status of the interest on the Obligations, including any principal,
interest or premium payments payable thereon, if any, as and when thereby
required.
This endorsement forms a part of the policy to which it is attached,
effective on the inception date of the policy.
MBIA INSURANCE CORPORATION
15
Assignment
For value received the undersigned sells, assigns and transfers this bond
to
(Name and Address of Assignee)
Social Security or Other Identifying Number of Assignee
and irrevocably appoints
attorney-in-fact to transfer it on the books kept for registration of the bond,
with full power of substitution.
NOTE: The signature to this assignment must
correspond with the name as written on the face of
the bond without alteration or enlargement or
other change and must be guaranteed by a
Participant in a Recognized Signature Guaranty
Medallion Program.
Dated:
Signature Guaranteed:
Participant in a Recognized Signature
Guaranty Medallion Program
By:
Authorized Signature
(b) Details of the Bonds. The Bonds shall mature on May 1, 2021 in the
principal amount of $108,985,000 and shall bear interest at 5.45% per annum. The
Bonds shall be issued in fully registered form and shall be numbered from R-1
upwards in the order of their issuance, or in any other manner determined by the
Trustee. Each Bond shall be in the denomination of five thousand dollars
($5,000) or any multiple thereof. The Bonds shall be dated as of December 1,
2001. The interest on the Bonds shall be payable on May 1 and November 1 of each
year commencing on May 1, 2002. Interest payments shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months. No Bond shall be
issued except in compliance with this Section 301.
16
Bonds shall be signed on behalf of the Authority by the manual or
facsimile signatures of any two of the Chairman, Vice Chairman, Treasurer, and
Executive Director and the corporate seal of the Authority or a facsimile
thereof shall be engraved or otherwise reproduced thereon. The Certificate of
Authentication of the Trustee shall be manually signed on behalf of the Trustee.
No bonds shall be issued under this Agreement other than the Bonds.
In case any officer whose signature or facsimile signature shall appear on
any Bond shall cease to be such officer before the delivery thereof, such manual
or facsimile signature shall nevertheless be valid and sufficient for all
purposes as if he or she had remained in office to the date of such delivery,
and any Bond may be signed by the persons who at the time of the execution
thereof shall be the proper officers to sign such Bond although at the date of
such Bond such persons may not have been such officers.
(c) Cancellation and Destruction of Bonds. All Bonds paid or redeemed in
full, either at or before maturity, shall be delivered to the Trustee when such
payment or redemption is made, and such Bonds, and all Bonds surrendered in any
exchanges or transfers, shall thereupon be promptly canceled. All Bonds acquired
and owned by the Company and delivered to the Trustee for cancellation shall be
deemed paid and shall be promptly canceled. Bonds so canceled may at any time be
cremated or otherwise destroyed by the Trustee, which shall execute a
certificate of cremation or destruction in duplicate by the signature of one of
its authorized officers describing the Bonds so cremated or otherwise destroyed,
and one executed certificate shall be filed with the Authority and the other
executed certificate shall be retained by the Trustee.
(d) Replacement Bonds. Replacement Bonds shall be issued pursuant to
applicable law as a result of the destruction, loss, wrongful taking or
mutilation of the Bonds. The costs of a replacement bond shall be paid or
reimbursed by the applicant, who shall indemnify the Authority, the Trustee and
the Company in such manner as they may require against all liability and expense
in connection therewith.
(e) Registration of Bonds in the Book-Entry Only System.
(i) Notwithstanding any provision herein to the contrary, the
provisions of this Subsection 301(e) and the Representation Letter
(as defined below) shall apply with respect to any Bond registered
to CEDE & CO. or any other nominee of The Depository Trust Company
("DTC") while the Book-Entry Only System (meaning the system of
registration described in paragraph (ii) of this Subsection 301(e))
is in effect.
(ii) The Bonds shall be issued in the form of a separate
single authenticated fully registered Bond for each stated maturity
in substantially the form set forth in Subsection 301(a). Any legend
required to be on the Bonds by DTC may be added by the Trustee. On
the date of original delivery thereof, the Bonds shall be registered
in the registration books of the Trustee in the name of CEDE & CO.,
as nominee of DTC as agent for the Authority in maintaining the
17
Book-Entry Only System. With respect to Bonds registered in the
registration books kept by the Trustee in the name of CEDE & CO., as
nominee of DTC, the Authority, the Company and the Trustee shall
have no responsibility or obligation to any Participant (which means
securities brokers and dealers, banks, trust companies, clearing
corporations and various other entities, some of whom or their
representatives own DTC) or to any Beneficial Owner (which means,
when used with reference to the Book-Entry Only System, the person
who is considered the beneficial owner of the Bonds pursuant to the
arrangements for book entry determination of ownership applicable to
DTC) with respect to the following: (A) the accuracy of the records
of DTC, CEDE & CO. or any Participant with respect to any ownership
interest in the Bonds, (B) the delivery to or from any Participant,
any Beneficial Owner or any other person, other than DTC, of any
notice with respect to the Bonds, including any notice of
redemption, or (C) the payment to any Participant, any Beneficial
Owner or any other person, other than DTC, of any amount with
respect to the principal of or premium, if any, or interest on the
Bonds. The Trustee shall pay all principal of and premium, if any,
and interest on the Bonds only to or upon the order of DTC, and all
such payments shall be valid and effective fully to satisfy and
discharge the Authority's obligations with respect to the principal
of and premium, if any, and interest on such Bonds to the extent of
the sum or sums so paid. No person other than DTC shall receive an
authenticated Bond evidencing the obligation of the Authority to
make payments of principal of and premium, if any, and interest
pursuant to this Agreement. Upon delivery by DTC to the Trustee of
written notice to the effect that DTC has determined to substitute a
new nominee in place of CEDE & CO., the words "CEDE & CO." in this
Agreement shall refer to such new nominee of DTC.
(iii) Upon receipt by the Trustee of written notice from DTC
to the effect that DTC is unable or unwilling to discharge its
responsibilities, the Trustee shall issue, transfer and exchange
Bond certificates as requested by DTC in appropriate amounts and in
authorized denominations, and whenever DTC requests the Authority
and the Trustee to do so, the Trustee and the Authority will
cooperate with DTC in taking appropriate action after reasonable
notice (A) to arrange for a substitute bond depository willing and
able upon reasonable and customary terms to maintain custody of the
Bonds or, if no such substitute bond depository is available, (B) to
make available Bond certificates registered in whatever name or
names DTC shall designate.
(iv) In the event the Company desires to permit Beneficial
Owners to be able to obtain Bond certificates, the Company may so
notify DTC, the Authority and the Trustee, whereupon the Trustee
shall issue, transfer and exchange Bond certificates as requested by
DTC in appropriate amounts and in authorized denominations and DTC
will notify the Participants of the availability through DTC of Bond
certificates. Following such notice, the Company, the Trustee and
the Authority will cooperate with DTC in taking appropriate action
after reasonable notice to make available Bonds registered in
whatever name or
18
names DTC shall designate.
(v) Notwithstanding any other provision of this Agreement to
the contrary, so long as any Bond is registered in the name of CEDE
& CO., as nominee of DTC, all payments with respect to the principal
of and premium, if any, and interest on such Bond and all notices
with respect to such Bond shall be made and given, respectively, to
DTC as provided in the Letter of Representation (the "Representation
Letter"), from the Authority to DTC as in effect from time to time.
(vi) Notwithstanding any provision in Section 307 to the
contrary, so long as all of the Bonds Outstanding are held in the
Book-Entry Only System, if less than all of such Bonds are to be
redeemed upon any redemption of Bonds hereunder, the particular
Bonds or portions of Bonds to be redeemed shall be selected by DTC
in such manner as DTC may determine.
(f) Paying Agent. At the direction of the Company, the Authority may
appoint one or more paying agents, each of which will execute and deliver to the
Trustee an instrument in which such paying agent shall agree with the Trustee
that such paying agent shall hold in trust, for the benefit of the Bondowners,
all sums held by such paying agent for the payment of the principal of, premium,
if any, and interest on the Bonds.
(g) Interest on Overdue Principal. Any overdue principal of any Bond shall
bear interest after its maturity or acceleration at the interest rate of the
Bonds.
Section 302. Application of Bond Proceeds. The Authority shall loan the
proceeds of the Bonds to the Company by promptly causing (A) the accrued
interest, if any, to be deposited in the Bond Fund and (B) $108,985,000 to State
Street Bank and Trust Company, as trustee under the Refunding Trust Agreement,
to refund the 1991 Series B Bonds on a current basis. The Company represents and
warrants that (i) substantially all of the proceeds (within the meaning of the
1954 Code) of the 1983 Bonds and the 1986 Bonds were spent to pay directly or to
reimburse the Company for Project Costs; (ii) such Project Costs were incurred
by and were chargeable to the capital account of the Company; (iii) such Project
Costs are costs of "sewage or solid waste disposal facilities" or "air or water
pollution control facilities" within the meaning of Section 103(b)(4)(E) or (F)
of the 1954 Code incurred and paid after January 14, 1976; and (iv) such Project
Costs were for an "industrial facility" within the meaning of Paragraphs 2, VII
(d) and (e) of the Act. The Company shall pay expenses and costs of issuance of
the Bonds from its own funds.
Section 303. Bond Fund. A Bond Fund is hereby established with the Trustee
for the account of the Company, and moneys shall be deposited therein as
provided in this Agreement. The Company hereby grants to the Trustee for the
benefit of the Bondowners a lien on and security interest in all deposits in the
Bond Fund. The moneys in the Bond Fund and any investments held as part of such
Fund shall be held in trust and, except as otherwise provided in Sections 304,
604 and 703, shall be applied by the Trustee solely to the payment of principal
of,
19
premium, if any, and interest on the Bonds. If at any time the amount in the
Bond Fund exceeds the amount necessary to pay or redeem the Bonds in full, and
all amounts owing or to be owing under this Agreement to the Authority and the
Trustee have been paid or provided for to the reasonable satisfaction of the
Trustee and the Authority, then the excess shall be paid to the Company except
as otherwise may be required by applicable law. When moneys in the Bond Fund are
to be applied to the payment of the Bonds, such moneys shall be transferred by
the Trustee to itself for the account of the Authority and shall then be so
applied. The Trustee shall pay out of the Bond Fund on each payment date the
amount required for the payment of principal of, premium, if any, and interest
on the Bonds payable on such date (whether at maturity, upon redemption, by
acceleration or otherwise).
Section 304. Application of Moneys. If available moneys in the Bond Fund
are not sufficient on any day to pay all principal of, premium, if any, and
interest on the Outstanding Bonds then due or overdue, such moneys shall, after
payment of all amounts owing to the Trustee and the Authority under this
Agreement, be applied first to the payment of interest, including interest on
overdue principal, in the order in which the same became due (pro rata with
respect to interest which became due at the same time) and second to the pro
rata payment of principal and premium, if any, without regard to the order in
which the same became due, in each case pro rata among Bondowners. For this
purpose interest on overdue principal shall be treated as coming due on the
first day of each month. Whenever moneys are applied pursuant to this section,
such moneys shall be applied by the Trustee at such times, and from time to
time, as the Trustee in its discretion shall determine, having due regard to the
amount of such moneys available and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall
exercise such discretion it shall fix the date (which shall be the first day of
a month unless the Trustee shall deem another date more suitable) upon which
such application is to be made, and upon such date interest on the amounts of
principal paid on such date shall cease to accrue. The Trustee shall give such
notice as it may deem appropriate of the fixing of any such date. When interest
or a portion of the principal is to be paid on an overdue Bond, the Trustee may
require presentation of the Bond for endorsement of the payment.
Section 305. Payments by the Company.
(a) Debt Service. The Company shall pay to the Trustee for deposit in the
Bond Fund not later than 12:00 noon, New York City time, on the second Business
Day preceding each date on which payment of Debt Service shall become due on any
interest payment date, at maturity, upon redemption, by acceleration or
otherwise, an amount in immediately available funds on such date equal to the
payment then coming due less the amount, if any, then in the Bond Fund and
available to pay Debt Service. At any time when any principal of the Bonds is
overdue, the Company shall also have a continuing obligation to pay to the
Trustee for deposit in the Bond Fund an amount equal to interest on the overdue
principal, but the payments required under this section shall not otherwise bear
interest. The Company may make payments to the Bond Fund earlier than required
by this section, but such payments shall not affect the accrual of interest. If
any moneys are invested in accordance with this Agreement and a loss results
therefrom so that there are insufficient funds to pay principal of, premium, if
any, and interest on the Bonds when
20
due, the Company shall supply the deficiency.
(b) Additional Payments.
(i) The Company shall pay when due the Authority's Service
Charge and other expenses as provided in Section 803.
(ii) Within thirty (30) days after notice from the Trustee,
the Company shall pay to the Trustee the reasonable fees and
expenses of the Trustee as set forth in Section 703 and other
indemnified or reimbursable amounts.
(c) Unclaimed Moneys. Except as may otherwise be required by applicable
law, in case any moneys deposited with the Trustee for the payment of the
principal of, premium, if any, or interest on any Bond remain unclaimed for
three years after such principal, premium, if any, or interest has become due
and payable, the Trustee may, and upon receipt of a written request of the
Company Representative shall, pay over to the Company the amount so deposited
and thereupon the Trustee and the Authority shall be released from any further
liability with respect to the payment of such principal, premium or interest,
and the owner of such Bond shall be entitled (subject to any applicable statute
of limitations) to look only to the Company as an unsecured creditor for the
payment thereof.
(d) Rebate. The Company shall pay to the United States when due any rebate
with respect to the Bonds pursuant to IRC ss.148(f).
Section 306. Unconditional Obligation. The obligation of the Company to
make payments under this Agreement shall be absolute and unconditional, shall be
binding and enforceable in all circumstances whatsoever as provided in the Act
and shall not be subject to set-off, recoupment or counterclaim, and shall be a
general obligation of the Company to which the full faith and credit of the
Company are pledged. The Company shall be obligated to make such payments
whether or not the Project Facilities have ceased to exist or be functional to
any extent from any cause whatsoever. The Company shall be obligated to make
such payments regardless of whether it is in possession or entitled to be in
possession of the Project Facilities.
Section 307. Redemption of the Bonds. The Bonds shall be subject to
redemption prior to maturity under the circumstances, in the manner and subject
to the conditions provided in this section and in the form of Bonds. Whenever
Bonds are called for redemption, the accrued interest thereon shall become due
on the redemption date. Transfers and payments for the purpose of redeeming
Bonds under this Agreement shall be made on behalf of the Authority, and the
Authority hereby consents to any redemption of Bonds in accordance herewith.
Except as otherwise provided in Subsection 301(e), if less than all of the Bonds
are to be redeemed, the Bonds to be redeemed shall be selected by the Trustee by
lot or in any customary manner as determined by the Trustee. For this purpose
each $5,000 portion of a Bond shall be treated as a separate Bond.
(a) Optional Redemption. The Outstanding Bonds are subject to redemption
prior to
21
maturity on or after May 1, 2012, at the option of the Company, as a whole or in
part at any time, at the following prices expressed as percentages of their
principal amount, plus accrued interest to the redemption date:
Period During Which Redeemed Redemption Price
---------------------------- ----------------
May 1, 2012 through April 30, 2013 101%
May 1, 2013 and thereafter 100
(b) Mandatory Taxability Redemption. The Outstanding Bonds are subject to
mandatory redemption at any time at a redemption price of 100% of the principal
amount of the Bonds so redeemed plus accrued interest to the date of redemption
in the event (i) the Company delivers to the Trustee and the Bond Insurer an
opinion of Bond Counsel stating that interest on the Bonds is or will become
includable in gross income of the owners thereof for federal income tax
purposes, or (ii) it is finally determined by the Internal Revenue Service or a
court of competent jurisdiction, as a result of (A) a proceeding in which the
Company has participated or been given notice and an opportunity to participate,
and (B) either a failure by the Company or the Seabrook Transferee to observe
any covenant or agreement undertaken in or pursuant to this Agreement or a
Seabrook Transfer, or the inaccuracy of any representation made by the Company
or the Seabrook Transferee in or pursuant to this Agreement or a Seabrook
Transfer, that interest payable on the Bonds is includable for federal income
tax purposes in the gross income of any owner thereof (other than an owner which
is a "substantial user" or a "related person" within the meaning of IRC Section
147(a)). Any determination under clause (ii) above will not be considered final
for this purpose until the earliest of the conclusion of any appellate review,
the denial of appellate review or the expiration of the period for seeking
appellate review. Redemption under this Subsection 307(b) shall be in whole
unless, not later than forty-five (45) days prior to the redemption date, the
Company delivers to the Trustee an opinion of Bond Counsel to the effect that a
redemption of less than all of the Bonds will preserve the tax-exempt status of
interest on the remaining Bonds outstanding subsequent to such redemption. Any
redemption under this Subsection 307(b) shall be made on the 60th day after the
date on which the opinion described in clause (i) is delivered or the
determination described in clause (ii) becomes final or on such earlier date as
the Company may designate by notice given to the Trustee at least forty-five
(45) days prior to such designated date. If such redemption shall occur in
accordance with the terms of this Agreement, then such failure by the Company or
the Seabrook Transferee to observe such covenant or agreement, or the inaccuracy
of any such representations will not, in and of itself, constitute a Default
hereunder.
If the Trustee receives written notice from any Bondowner stating that (I)
such Bondowner has been notified in writing by the Internal Revenue Service that
it proposes to include the interest on the Bonds in the gross income of such
owner for federal income tax purposes, or any other proceeding has been
instituted against such owner which may lead to a like determination, and (II)
such owner will afford the Company the opportunity to participate at its own
expense in the proceeding, either directly or in the name of such owner, until
the conclusion of any appellate review, and the Trustee has examined such
written notice and it
22
appears to be accurate on its face, then the Trustee shall promptly give notice
thereof to the Company, the Authority, and each Bondowner whose Bonds may be
affected. The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice.
(c) Notice to the Trustee. The Company shall exercise its option to have
Bonds redeemed under Subsection 307(a) by giving written notice to the Trustee
at least forty-five (45) days before the redemption date. The Company shall keep
the Trustee informed of the progress of any proceeding referred to in Subclause
307(b)(ii)(A) and shall give written notice to the Trustee within forty-five
(45) days after it has actual knowledge of a final determination as described in
Clause 307(b)(ii).
(d) Payment of Redemption Price and Accrued Interest. Whenever Bonds are
called for redemption, the accrued interest thereon shall become due on the
redemption date and shall be paid from the Bond Fund to the extent available
therein. To the extent not otherwise provided, the Company shall deposit with
the Trustee on the second Business Day preceding the redemption date a
sufficient sum to pay the redemption price and accrued interest.
(e) Notice of Redemption. When Bonds are to be redeemed, the Trustee shall
give notice to Bondowners in the name of the Authority as provided in the form
of Bond and this Subsection 307(e), which notice shall identify the Bonds or
portions thereof to be redeemed and state the date fixed for redemption and the
place or places of payment of the redemption price. The notice shall further
state that on such date there shall become due and payable upon each Bond or
portion thereof to be redeemed the redemption price thereof, together with
interest accrued to the redemption date, that money available therefor having
been deposited with the Trustee, from and after such date, interest thereon
shall cease to accrue and that the Bonds or portions thereof called for
redemption shall cease to be entitled to any benefit under this Agreement except
the right to receive payment of the redemption price. Failure to mail notice to
a particular Bondowner, or any defect in the notice to such Bondowner, shall not
affect the redemption of any other Bond.
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Section 308. Investments.
(a) Pending their use under this Agreement, moneys in the Bond Fund may be
invested or reinvested by the Trustee at the written direction of the Company
Representative (upon which the Trustee may conclusively rely) in Permitted
Investments, as defined below, with maturities at or before the time when such
moneys are required to be available and shall be so invested upon and pursuant
to written direction of the Company if no Default known to the Trustee then
exists under this Agreement; provided that the Company shall not request,
authorize or permit any investment which would cause any of the Bonds to be
classified as "arbitrage bonds" as defined in IRC ss.148(a). Any investments and
proceeds thereof shall be held by the Trustee as part of the Bond Fund and shall
be sold or redeemed at the direction of the Company to the extent necessary to
make payments or transfers or anticipated payments or transfers from such Fund.
(b) Any interest or dividends realized from an investment and any profit
realized upon the sale or disposition thereof shall be credited to the Bond Fund
and any loss shall be charged thereto.
(c) (1) The term "Permitted Investments" means (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, and CATS and TIGRS) 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 (stripped securities are only permitted
if they have been stripped by the agency itself):
(i) U.S. Export-Import Bank (Eximbank) - Direct obligations or
fully guaranteed certificates of beneficial ownership;
(ii) Farmers Home Administration (FmHA) - Certificates of
beneficial ownership;
(iii) Federal Financing Bank
(iv) Federal Housing Administration Debentures (FHA)
(v) General Services Administration - Participation
certificates
(vi) Government National Mortgage Association (GNMA or "Ginnie
Mae") - GNMA - guaranteed mortgage-backed bonds and GNMA -
guaranteed pass-through obligations
(vii) U.S. Maritime Administration - Guaranteed Title XI
financing
24
(viii) U.S. Department of Housing and Urban Development (HUD)
- Project Notes, Local Authority Bonds, New Communities Debentures -
U.S. government guaranteed debentures, U.S. Public Housing Notes and
Bonds - U.S. government guaranteed public housing notes and bonds;
(C) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S. government
agencies (stripped securities are only permitted if they have been stripped by
the agency itself):
(i) Federal Home Loan Bank System - Senior debt obligations
(ix) Federal Home Loan Mortgage Corporation (FHLMC or "Freddie
Mac") - Participation Certificates and Senior debt obligations
(x) Federal National Mortgage Association (FNMA or "Fannie
Mae") - Mortgage-backed securities and senior debt obligations
(xi) Student Loan Marketing Association (SLMA or "Sallie Mae")
- Senior debt obligations
(xii) Resolution Funding Corp. (REFCORP) obligations, and
(xiii) Farm Credit System - Consolidated systemwide bonds and
notes;
(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 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
bondholders 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 FDIC, including BIF and SAIF; (G) Investment
Agreements, including GIC's, acceptable to the Bond Insurer; (H) Commercial
paper rated, at the time of purchase, "Prime - 1" by 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 and S&P in one of the two highest rating categories assigned by such
agencies; (J) Federal funds or bankers acceptances with a maximum term of one
year of any bank which has an unsecured, uninsured and unguaranteed obligation
rating of "Prime - 1" or "A3" or better by Moody's and "A-1" or "A" or better by
S&P; and (K) Repurchase agreements acceptable to the Bond Insurer.
(2) Notwithstanding the immediately preceding paragraph Permitted
Investments shall not include the following:
(i) obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America,
certificates of
25
deposit and bankers' acceptances, in each case with yields lower
than the yield available on comparable obligations of the United
States Treasury; or
(xiv) any demand deposit or similar account with a bank, trust
company or broker, unless the account is used for holding funds for
a short period of time until such funds are reinvested or spent.
Any of the requirements of this paragraph (2) shall not apply to moneys as
to which the Trustee and the Authority shall have received an opinion of
nationally recognized bond counsel to the effect that such requirements are not
necessary to preserve the exclusion of interest on Bonds from the gross income
of the owner thereof for federal income tax purposes. Any such Permitted
Investments obtained from or through or issued by the Trustee in its commercial
banking capacity, or from or by any of its affiliates, shall be permitted
(provided that such investment otherwise qualifies in accordance with the
definition of "Permitted Investments").
Section 309. Tax Status of Bonds. The Company will perform its obligations
and agreements contained in the Federal Tax Statement as if they were set forth
herein. All representations of the Company in the Federal Tax Statement shall be
treated as if they were set forth herein. Any covenants, agreements or
representations made by the Company or any transferee of the Project Facilities
(or any successor to such a transferee) in connection with such a transfer shall
be performed and treated as if set forth herein. The Authority will cooperate
with the Bondowners and the Company to the extent deemed necessary or permitted
by law in the opinion of bond counsel to the Authority in order to preserve the
exclusion of interest on the Bonds from the gross income of the owners thereof
for federal income tax purposes.
Section 310. Payment Procedure Pursuant to Bond Insurance Policy. In the
event that, on the second Business Day, and again on the Business Day, prior to
the payment date on the Bonds, the Trustee has not received sufficient moneys to
pay all principal of and interest on the Bonds due on the second following or
following, as the case may be, Business Day, the Trustee shall immediately
notify the Bond Insurer or its designee on the same Business Day by telephone,
facsimile or telegraph, confirmed in writing by registered or certified mail, of
the amount of the deficiency.
(a) If the deficiency is made up in whole or in part prior to or on the
payment date, the Trustee shall so notify the Bond Insurer or its designee.
(b) In addition, if the Trustee has actual notice that any Bondowner has
been required to disgorge payments of principal or interest on the Bond to a
trustee in bankruptcy or creditors or others pursuant to a final judgment by a
court of competent jurisdiction that such payment constitutes an avoidable
preference to such Bondowner within the meaning of any applicable bankruptcy
laws, then the Trustee shall notify the Bond Insurer or its designee of such
fact by telephone, facsimile or telegraphic notice, confirmed in writing by
registered or certified mail.
(c) The Trustee is hereby irrevocably designated, appointed, directed and
authorized
26
to act as attorney-in-fact for Bondowners as follows:
(i) If and to the extent there is a deficiency in amounts required
to pay interest on the Bonds, the Trustee shall (a) execute and deliver to
State Street Bank and Trust Company, N.A., or its successors under the
Bond Insurance Policy (the "Insurance Paying Agent"), in form reasonably
satisfactory to the Insurance Paying Agent, an instrument appointing the
Bond Insurer as agent for such Bondowners in any legal proceeding related
to the payment of such interest and an assignment to the Bond Insurer of
the claims for interest to which such deficiency relates and which are
paid by the Bond Insurer, (b) receive as designee of the respective
Bondowners (and not as Trustee) in accordance with the tenor of the Bond
Insurance Policy payment from the Insurance Paying Agent with respect to
the claims for interest so assigned, and (c) disburse the same to such
respective Bondowners ; and
(ii) If and to the extent of a deficiency in amounts required to pay
principal of the Bonds, the Trustee shall (a) execute and deliver to the
Insurance Paying Agent in form reasonably satisfactory to the Insurance
Paying Agent an instrument appointing the Bond Insurer as agent for such
Bondowners in any legal proceeding relating to the payment of such
principal and an assignment to the Bond Insurer of any of the Bonds
surrendered to the Insurance Paying Agent of so much of the principal
amount thereof as has not previously been paid or for which moneys are not
held by the Trustee and available for such payment (but such assignment
shall be delivered only if payment from the Insurance Paying Agent is
received), (b) receive as designee of the respective Bondowners (and not
as Trustee) in accordance with the tenor of the Bond Insurance Policy
payment therefor from the Insurance Paying Agent, and (c) disburse the
same to such Bondowners.
(d) Payments with respect to claims for interest on and principal of Bonds
disbursed by the Trustee from proceeds of the Bond Insurance Policy shall not be
considered to discharge the obligation of the Authority with respect to such
Bonds, and the Bond Insurer shall become the owner of such unpaid Bonds and
claims for the interest in accordance with the tenor of the assignment made to
it under the provisions of this section or otherwise.
(e) Irrespective of whether any such assignment is executed and delivered,
the Authority and the Trustee hereby agree for the benefit of the Bond Insurer
that:
(i) They recognize that to the extent the Bond Insurer makes
payments, directly or indirectly (as by paying through the Trustee), on
account of principal of or interest on the Bonds, the Bond Insurer will be
subrogated to the rights of such Owners to receive the amount of such
principal and interest from the Authority, with interest thereon as
provided and solely from the sources stated in this Agreement and the
Bonds; and
(ii) They will accordingly pay to the Bond Insurer the amount of
such principal
27
and interest (including principal and interest recovered under
subparagraph (ii) of the first paragraph of the Bond Insurance Policy,
which principal and interest shall be deemed past due and not to have been
paid), with interest thereon as provided in this Agreement and the Bonds,
but only from the sources and in the manner provided herein for the
payment of principal of and interest on the Bonds to Bondowners, and will
otherwise treat the Bond Insurer as the owner of such rights to the amount
of such principal and interest.
(f) Copies of any amendments made to the documents executed in connection
with the issuance of the Bonds which are consented to by the Bond Insurer shall
be sent to S&P.
(g) The Bond Insurer shall receive notice of the resignation or removal of
the Trustee and the appointment of a successor thereto.
(h) The Bond Insurer shall receive copies of all notices required to be
delivered to Bondowners and, on an annual basis, the Company shall provide to
the Bond Insurer copies of the Company's audited financial statements and annual
budget.
(i) Any notice that is required to be given to an owner of the Bonds or to
the Trustee or by any party pursuant to this Agreement shall also be provided to
the Bond Insurer. All notices required to be given to the Bond Insurer under
this Agreement shall be in writing and shall be sent by registered or certified
mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, NY 10504,
Attention: Surveillance.
Section 311. The Bond Insurer. Except as provided in Subsection 608(b),
anything in this Agreement to the contrary notwithstanding, the Bond Insurer
shall be deemed to be the owner of the Bonds for purposes of giving consents
(including consent to amendments to this Agreement other than those requiring
unanimous consent of the affected Bondowners), notices, directions and waivers
to the Company, the Authority and the Trustee under this Agreement.
(j) Except as provided in Subsection 608(b), the Bond Insurer, acting
alone, shall have the right to direct all remedies pursuant to Section 602(b) in
an Event of Default, subject to the terms of the Agreement.
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ARTICLE IV. THE PROJECT
Section 401. Company not to Impair Tax Status; Use of Project Facilities.
Notwithstanding any provision herein to the contrary, the Company did not and
will not use any of the proceeds of the 1983 Bonds, the 1986 Bonds, the 1991
Series B Bonds or the Loan (or the income earned through the investment thereof,
if any) and did not take or omit any action or permit any action to be taken or
omitted with the result that interest on the Bonds is included in the gross
income of the owners thereof for federal income tax purposes. The use of the
Project Facilities (or facilities replacing the same) is in furtherance of the
purpose of air or water pollution control or sewage or solid waste disposal and
in compliance with the Act.
Section 402. Qualification of Project Facilities. Notwithstanding any
provision herein to the contrary, the Company did not permit the Project
Facilities to fail to qualify as (a) "industrial facilities" under the Act, and
(b) a facility described in Section 1312(a) of the Tax Reform Act of 1986, or
(c) "sewage or solid waste disposal facilities" or "air or water pollution
control facilities" within the meaning of Section 103(b)(4)(E) or (F) of the
1954 Code. No funds of the Authority, other than the proceeds of the Bonds,
shall be available to pay Project Costs. The Company acknowledges that it is not
relying on any representation of any kind by the Authority or the Trustee
concerning the nature or condition of the Project Facilities. Neither the
Authority nor the Trustee shall be liable to the Company or any other person for
any latent or patent defect in the Project Facilities.
Section 403. Reserved .
Section 404. Reserved.
Section 405. Disposition and Use of Project Facilities. The Company has
transferred its interest in the Project Facilities to NAEC. NAEC is expected to
transfer the Project Facilities to an unaffiliated party pursuant to an order of
the New Hampshire Public Utilities Commission. No Bonds shall be issued under
this Agreement until the Authority, the Company, the Trustee and NAEC have
executed and delivered a Series C Seabrook Pollution Control Facilities
Agreement substantially in the form attached hereto as Exhibit B (such Agreement
and each subsequent agreement providing for a Seabrook Transfer, a "Facilities
Agreement"). No sale, lease, transfer or other disposition of the Project
Facilities or the Station shall relieve the Company of any of its obligations
under this Agreement.
29
ARTICLE V. ADDITIONAL COVENANTS OF THE COMPANY
Section 501. Existence and Good Standing; Merger; Consolidation; Notice to
Trustee. The Company will maintain its corporate existence, qualification to do
business and good standing under the laws of the State of New Hampshire and will
maintain itself as a foreign corporation duly qualified to do business and in
good standing, where applicable, in each jurisdiction in which the failure to so
qualify would have a material adverse effect upon its business or properties.
The Company shall not merge or consolidate with or sell all or substantially all
of its assets to another entity, except that the Company may so merge or
consolidate with or sell all or substantially all of its assets to another
corporation if (i) the surviving or transferee corporation is qualified to do
business in New Hampshire, (ii) the surviving or transferee corporation (if not
the Company) has assumed in writing all of the Company's obligations hereunder
and under the Series K First Mortgage Bonds, and (iii) upon such assumption
there will not be a Default hereunder or under the First Mortgage Indenture
(disregarding any required passage of time or giving of notice thereunder). The
Company shall not change its name or reorganize or change its legal structure,
or merge or consolidate with or sell all or substantially all its assets to
another entity, without at least thirty (30) days prior written notice to the
Trustee (unless the Trustee agrees to a shorter period).
Section 502. Indemnification by the Company. The Company, regardless of
any agreement to maintain insurance, shall and does hereby indemnify the
Authority and the Trustee against (a) any and all claims by any person related
to the participation of the Authority or the Trustee in the transactions
contemplated by this Agreement, including without limitation claims arising out
of any condition of the Project Facilities or Station or the construction, use,
occupancy or management thereof; any accident, injury or damage to any person
occurring in or about the Station; any breach by the Company of its obligations
under this Agreement; any act or omission of the Company or any of its agents,
contractors, servants, employees or licensees; or the offering, issuance, sale
or any resale of the Bonds to the extent permitted by law, and (b) all costs,
counsel fees, expenses or liabilities reasonably incurred in connection with any
such claim or any action or proceeding brought thereon. In case any action or
proceeding is brought against the Authority or the Trustee by reason of any such
claim, the Company will defend the same at its expense upon notice from the
Authority or the Trustee, and the Authority or the Trustee, as the case may be,
will cooperate with the Company, at the expense of the Company, in connection
therewith.
Section 503. Continuing Disclosure. The Company and the Trustee hereby
covenant and agree that each will comply with and carry out all of the
provisions of the Continuing Disclosure Agreement applicable to it and this
Section 503 of this Agreement. The Authority shall have no liability to the
owners of the Bonds or any other person with respect to such disclosure matters.
Notwithstanding any other provision of this Agreement, failure of the Company or
the Trustee to comply with the Continuing Disclosure Agreement shall not be
considered an Event of Default; however, the Trustee may (and, at the request of
the owners of at least 25% aggregate principal amount of Outstanding Bonds,
shall) or any owner (including a beneficial owner) of Bonds may seek specific
performance of the Company's or the Trustee's obligations to comply with the
Continuing Disclosure Agreement or this Section 503 and not for
30
money damages in any amount.
ARTICLE VI. DEFAULT AND REMEDIES
Section 601. Default.
(a) Events of Default; Default. "Event of Default" in this Agreement means
any one of the events set forth below and "Default" means any Event of Default
without regard to any lapse of time or notice.
(i) Debt Service on Bonds. Any payment of interest, principal
or premium on the Bonds shall not be paid when the same becomes due
and payable.
(ii) Other Obligations. The Company shall fail to observe or
perform any of its other covenants or agreements contained herein,
or the Seabrook Transferee shall fail to observe or perform any of
its covenants or agreements related to the Project Facilities
contained in the Facilities Agreement, and such failure shall
continue for a period of sixty (60) days after written notice given
to the Company by the Trustee, the Bond Insurer or the Bondowners of
at least 25% in principal amount of the Bonds Outstanding; provided,
however, that if such Default cannot be cured by the Company or the
Seabrook Transferee within such sixty-day period, it shall not
constitute an Event of Default if, with the written consent of the
Bond Insurer (which shall not be unreasonably withheld), curative
action is instituted by the Company or the Seabrook Transferee
within such sixty-day period and thereafter is diligently pursued
until such Default is cured.
(iii) First Mortgage Bond Default. The occurrence of any
"event of default" as defined in the First Mortgage Bond Indenture.
(iv) Bond Insurance Agreement Default. The Trustee shall have
received written notice from the Bond Insurer of the occurrence of
any "Event of Default" as defined in the Bond Insurance Agreement.
The Company agrees to notify the Authority, the Trustee and the Bond
Insurer promptly in writing of the occurrence of any Default or Event of Default
of which it has knowledge. Immediately after becoming aware of an Event of
Default under (i) above, or within five (5) days or the next Business Day if
such fifth day is not a Business Day after becoming aware of a Default or an
Event of Default under (ii), (iii), or (iv) above, the Trustee will give notice
to the Bondowners and, in the case of an Event of Default under (i), (ii) or
(iv) above, to the First Mortgage Bond Trustee.
Notwithstanding anything in this section to the contrary, no action or
failure to act by the Company or the Seabrook Transferee which results in
interest on the Bonds becoming includable in gross income of the owners thereof
for federal income tax purposes shall constitute a Default or Event of Default
under this Agreement so long as (I) the Company shall have delivered the
31
opinion described in clause (i) of Subsection 307(b) or shall have complied with
the second sentence of Subsection 307(c) and (II) the redemption provided by
Subsection 307(b) occurs. In such event, no Bondowner shall be entitled to any
claim for monetary damages hereunder and the redemption of the Bonds as provided
under Subsection 307(b) shall be the exclusive recourse of Bondowners.
(b) Waiver. At any time before an acceleration pursuant to Section 602,
the Trustee may waive a Default (other than a Default in the payment of
principal of, premium, if any, or interest on the Bonds) and its consequences,
with the written consent of the Bond Insurer, by written notice to the Company,
and in the absence of any inconsistent instructions from Bondowners pursuant to
Sections 605 or 901 shall do so, with the written consent of the Bond Insurer,
upon written instruction of the owners of at least twenty-five per cent (25%) in
principal amount of the Outstanding Bonds. No waiver under this section shall
affect the right of the Trustee or the Authority to enforce the payment of any
amounts owing to it.
Any cure or waiver of any "event of default" under the First Mortgage Bond
Indenture and a rescission and annulment of its consequences shall constitute a
cure or waiver of the corresponding Event of Default under Paragraph 601(a)(iii)
and a rescission and annulment of the consequences thereof, and the Trustee,
upon obtaining knowledge thereof, shall give written notice of such cure or
waiver, rescission or annulment to the Authority and the Company, and shall give
notice thereof by mail to all Bondowners; but no such cure or waiver, rescission
and annulment shall extend to or affect any subsequent Event of Default or
impair any right or remedy consequent thereon.
Section 602. Remedies for Events of Default. If an Event of Default occurs
and is continuing:
(a) Acceleration. With the written consent of the Bond Insurer, the
Trustee may, and upon the written request of the Bondowners of at least 25% in
principal amount of the Bonds Outstanding shall, by written notice to the
Authority and the Company, declare immediately due and payable the principal
amount of the Outstanding Bonds and accrued interest thereon, whereupon the same
shall become immediately due and payable without any further action or notice.
If at any time after such acceleration and before any judgment or decree
for the payment of moneys with respect thereto has been entered all amounts
payable hereunder except principal of and interest on the Bonds which are due
solely by reason of such acceleration shall have been paid or provided for by
deposit with the Trustee and all existing Defaults shall have been cured or
waived, then the Bondowners representing a majority in principal amount of the
Bonds Outstanding may annul such acceleration and its consequences by written
notice to the Authority, the Trustee and the Company. Such annulment shall be
binding upon the Authority, the Trustee and all of the Bondowners, but no such
annulment shall extend to or affect any subsequent Default or impair any right
or remedy consequent thereto.
(b) Rights as a Secured Party. The Trustee may, with the written consent
of the Bond
32
Insurer and shall at the written direction of the Bond Insurer, exercise all of
the rights and remedies of a secured party under the UCC, subject to the terms
of this Agreement. Notice sent by registered or certified mail, postage prepaid,
or delivered during business hours, to the Company at least seven (7) days
before an event under UCC Section 9-611(b) or any successor provision of law
shall constitute reasonable notification of such event.
Section 603. Court Proceedings. The Trustee and the Bond Insurer may
enforce the provisions of this Agreement by appropriate legal proceedings for
the specific performance of any covenant, obligation or agreement contained
herein whether or not a Default or an Event of Default exists, or for the
enforcement of any other appropriate legal or equitable remedy, and may recover
damages caused by any breach by the Company of the provisions of this Agreement,
including (to the extent this Agreement may lawfully provide) court costs,
reasonable attorney's fees and other costs and expenses incurred in enforcing
the obligations of the Company hereunder. The Authority may likewise enforce
obligations owed to it hereunder which it has not assigned to the Trustee. All
rights under this Agreement and the Bonds may be enforced by the Trustee without
the possession of any Bonds or the production thereof at the trial or other
proceedings relative thereto, and any proceeding instituted by the Trustee shall
be brought in its name for the ratable benefit of the Bondowners.
Section 604. Revenues after Default. After the occurrence of an Event of
Default, any funds pledged as security hereunder and any other moneys received
by the Trustee (other than amounts irrevocably set aside to pay particular
Bonds), after payment or reimbursement of the reasonable expenses of the Trustee
and the Authority in connection therewith shall be applied, first, to any other
amounts owing to the Trustee; second, to any other amounts owing to the
Authority other than the Authority's Service Charge; third, to amounts due under
Section 305(a), which amounts shall be applied to the payment of principal of,
premium, if any, and interest on the Bonds in the order specified in Section
304; fourth, to the Authority's Service Charge; and fifth, to other obligations
of the Company hereunder in such order as determined by the Trustee. Any amounts
remaining after the satisfaction of all obligations of the Company hereunder
shall be paid to the Company.
Section 605. Rights of Bondowners. If an Event of Default occurs and is
continuing, and if the Bondowners representing not less than 25% in principal
amount of the Bonds Outstanding shall have requested the Trustee in writing to
exercise one or more of the rights and remedies provided hereunder and offered
it indemnity as provided in Subsection 702(e), the Trustee shall be required to
exercise such one or more of the rights and remedies hereunder as the Trustee
shall determine to be in the best interest of the Bondowners and not
inconsistent with any directions given in accordance with Section 901. No
Bondowner shall have any right to institute an action in law or equity or to
pursue any other remedy hereunder with respect to any Bond unless (i) an Event
of Default of which the Trustee has been notified has occurred and Bondowners
representing not less than 25% in principal amount of the Bonds Outstanding
shall have requested the Trustee in writing to exercise its rights and remedies
with respect thereto and shall have offered the Trustee reasonable opportunity
to do so and indemnity as provided in Subsection 702(e), and (ii) the Trustee
shall within a reasonable time thereafter fail to exercise any of such rights or
remedies. No Bondowner shall have any right to institute any action or
33
pursue any other remedy if and to the extent that the surrender, impairment,
waiver, or loss of the lien of this Agreement would, under applicable law,
result. Notwithstanding the foregoing, each Bondowner shall have a right of
action to enforce payment of the Bonds at and after the due date thereof at the
place, from the sources and in the manner expressed in the Bonds.
Section 606. Performance of Company's Obligations. If the Company shall
fail to observe or perform any of its agreements or obligations hereunder, the
Authority or the Trustee may perform the same in its own name or in the
Company's name and each is hereby irrevocably appointed the Company's
attorney-in-fact for such purpose. Unless an Event of Default exists, the
Authority or the Trustee, as the case may be, shall give at least five (5) days
notice to the Company before taking action under this section, except that in
case of emergency as reasonably determined by the acting party, it may act on
lesser notice or give the notice promptly after rather than before taking the
action. The reasonable cost of any such action performed by the Trustee or the
Authority shall be paid or reimbursed by the Company within thirty (30) days
after the Trustee or the Authority notify the Company of such cost.
Section 607. Remedies Cumulative; No Waiver. The rights and remedies under
this Agreement shall be cumulative and shall not exclude any other rights and
remedies allowed by law, provided there is no duplication of recovery. Neither
the failure to insist upon a strict performance of any of the obligations of the
Company, nor the failure to exercise any remedy for any violation thereof, shall
be taken as a waiver for the future of the right to insist upon strict
performance of the obligation or to exercise any remedy for the violation.
Section 608. Rights of Bond Insurer.
(a) Anything in this Agreement to the contrary notwithstanding, except as
provided in subsection (b), upon the occurrence and continuance of an Event of
Default, the Bond Insurer shall be entitled to control and direct the
enforcement of all rights and remedies granted to the Bondowners or the Trustee
for the benefit of the Bondowners under this Agreement, including, without
limitation, acceleration of the principal of the Bonds as described in this
Agreement and the right to annul any declaration of acceleration, and the Bond
Insurer shall also be entitled to approve all waivers of Events of Default with
respect to the Bonds.
(b) Anything in this Agreement to the contrary notwithstanding, the
provisions contained in this Section 608 and all other rights and remedies
granted to the Bond Insurer under this Agreement shall be null and void upon the
happening and during the continuance of any of the following (a "Bond Insurer
Default"): (1) a Bond Insurer Event of Insolvency, except to the extent of
payments made by the Bond Insurer under the Bond Insurance Policy which are not
voidable preferences; or (2) failure of the Bond Insurer to pay in accordance
with the Bond Insurance Policy, except to the extent of prior payments made by
the Bond Insurer under the Bond Insurance Policy which are not voidable
preferences.
34
ARTICLE VII. THE TRUSTEE
Section 701. Corporate Organization, Authorization and Capacity. The
Trustee represents and warrants that it is a trust company duly organized and
validly existing under the laws of The Commonwealth of Massachusetts and duly
licensed in Massachusetts, with the capacity to exercise the powers and duties
of the Trustee hereunder, and that by proper corporate action it has duly
authorized the execution and delivery of this Agreement.
Section 702. Rights and Duties of the Trustee.
(a) Moneys to be Held in Trust. All moneys deposited with the Trustee
under this Agreement (other than amounts received for its own use) shall be held
by the Trustee in trust and applied subject to the provisions of this Agreement,
but need not be segregated from other funds except as required herein or by law.
(b) Accounts. The Trustee shall keep proper accounts of its transactions
hereunder (separate from its other accounts), which shall be open to inspection
at reasonable times and upon reasonable advance written request by the
Authority, the Company, the Bond Insurer and the Bondowners and their
representatives duly authorized in writing.
(c) Performance of the Authority's Obligations. If the Authority shall
fail to observe or perform any agreement or obligation contained in this
Agreement, the Trustee may take whatever legal proceedings may be required to
compel full performance by the Authority of its obligations, and in addition,
the Trustee may, to whatever extent it deems appropriate for the protection of
the Bondowners, itself or the Company, perform any such obligation in the name
of the Authority and on its behalf.
(d) Responsibility. The Trustee shall be entitled to the advice of counsel
(who may be the Trustee's counsel, counsel for the Authority, the Company or any
Bondowner) and shall be wholly protected as to any action taken or omitted to be
taken in good faith in reliance on such advice. The Trustee may rely
conclusively on any notice, certificate or other document furnished to it
hereunder and reasonably believed by it to be genuine. The Trustee shall not be
liable for any action taken by it in good faith and reasonably believed by it to
be within the discretion or powers conferred upon it, in good faith omitted to
be taken by it and reasonably believed to be beyond the discretion or powers
conferred upon it, taken by it pursuant to any direction or instruction by which
it is governed hereunder, or omitted to be taken by it by reason of the lack of
direction or instruction required hereby for such action; nor shall it be
responsible for the consequences of any error of judgment reasonably made by it.
The duties of the Trustee are those expressly set forth in this Agreement, and
no additional duties shall be implied. When any payment, consent or other action
by it is called for hereby, it may defer such action pending receipt of such
evidence, if any, as it may require in support thereof. The Trustee shall in no
event be liable for the application or misapplication of funds, or for other
acts or defaults by any person, firm, or corporation, except its own directors,
officers, and employees. No recourse shall be had by the Company, the Authority
or any Bondowner for any claim based on this Agreement or any Bond against any
director, officer, employee, or agent of the Trustee alleging personal
35
liability on the part of such person, unless such claim is based upon the bad
faith, negligence, fraud or deceit of such person. The Trustee has no
responsibility for the validity or sufficiency of this Agreement or the Bonds or
any security therefor.
(e) Limitations on Actions. The Trustee shall not be required to monitor
the financial condition of the Company or the physical condition of the Project
Facilities and, unless otherwise expressly provided, shall not have any
responsibility with respect to notices, certificates or other documents filed
with it hereunder, except to make them available for inspection by the
Bondowners. The Trustee shall not be deemed to have knowledge of and shall not
be required to take notice of any Default or Event of Default, except for a
Default or Event of Default described in Paragraph 601(a)(i) relating to the
payment of principal of, premium, if any, and interest on the Bonds, unless the
Trustee shall be specifically notified in writing by the Company, the Authority
or Bondowners representing not less than 25% in principal amount of the Bonds
Outstanding, or in the case of a Default or Event of Default described in
Paragraph 601(a)(iii), the Trustee shall be notified in writing by the First
Mortgage Bond Trustee. The Trustee shall not be required to take any remedial
action (other than the giving of notice) unless indemnity reasonably
satisfactory to it is furnished for any expense or liability to be incurred
therein, other than liability for failure to meet the standards set forth in
this section. The Trustee shall be entitled to reimbursement from the Company
for its expenses reasonably incurred or advances reasonably made, which
reimbursement shall be due and payable thirty (30) days after notifying the
Company of such expenses or advances, in the exercise of its rights or the
performance of its obligations hereunder, whether or not it acts without
previously obtaining indemnity.
A permissive right or power to act shall not be construed as a requirement
to act. Upon receipt of written notice, direction, instruction, and indemnity as
provided above and, after making such investigation, if any, as it deems
appropriate to verify the occurrence of any Default of which it is notified by
the Bondowners, the Trustee shall pursue such remedies hereunder (not contrary
to such direction) as it deems appropriate for the protection of the Bondowners;
and in its actions under this provision, the Trustee shall be required to act
for the protection of the Bondowners with the same prudence as would be expected
of a prudent person in the conduct of such person's affairs.
(f) Financial Obligations. Nothing contained in this Agreement shall in
any way obligate the Trustee to pay any debt or meet any financial obligations
to any person in relation to the Project Facilities except from moneys received
under the provisions of this Agreement (including from the exercise of its
rights and remedies hereunder) other than moneys received for its own purposes.
(g) Registration Books. The Trustee will keep books for the registration
of the Bonds and transfers thereof as provided in this Agreement. The Trustee
shall furnish a list of the Bondowners to the Authority, the Bond Insurer or
Company at any time upon its request, and to Bondowners representing at least
15% in principal amount of the Outstanding Bonds, at any time upon their
request.
(h) Ownership of Bonds. The Trustee or any affiliate of the Trustee may be
or
36
become the owner of Bonds with the same rights as if it were not Trustee.
(i) No Surety Bond. The Trustee shall not be required to furnish any bond
or surety.
(j) Requests by the Company. Upon any request by the Company to the
Trustee to take any action under this Agreement (including but not limited to
any proposed amendment pursuant to Section 1001) the Trustee shall be entitled
to receive from the Company prior to taking such action, and to rely upon, a
certificate of a Company Representative and an opinion of counsel reasonably
satisfactory to the Trustee (who may be counsel to the Company), and, if
applicable in the reasonable judgment of the Trustee, a certificate of an
accountant satisfactory to the Company (who may be an employee of the Company),
each to the effect that in the signer's opinion all conditions precedent
applicable to such action under this Agreement, if any, have been satisfied
(and, in the case of the certificate of the Company Representative, including
but not limited to the absence of any Default or Event of Default) and such
action is permitted by this Agreement.
(k) Trustee as Holder of Series K First Mortgage Bonds. So long as no
Default has occurred and is continuing, the Trustee may, but shall have no
obligation to, take any action in its capacity as the registered holder of the
Series K First Mortgage Bonds (other than the duty to exercise reasonable care
in the safekeeping thereof and the giving of notices set forth below), unless
and except to the extent the Trustee is directed in writing by the Bondowners as
provided in Section 901 of this Agreement. The Trustee shall promptly notify the
Bondowners of the receipt of and contents of any notice it receives under the
First Mortgage Bond Indenture (other than notices solely of payments being made
on the Series K First Mortgage Bonds).
Section 703. Fees and Expenses of the Trustee. The Company shall pay to
the Trustee reasonable compensation for its services and prepay or reimburse the
Trustee for its reasonable expenses and disbursements, including attorney's
fees, hereunder. The Company shall indemnify and save the Trustee harmless
against any and all (a) claims as set forth in Section 502 above, (b) costs,
counsel fees, expenses and liabilities reasonably incurred in connection with
such claims, and (c) costs, counsel fees, expenses and liabilities which it may
incur in or arising from the administration, performance or exercise of its
duties, rights, powers or responsibilities hereunder and which are not due to
the bad faith, negligence, fraud or deceit of any director, officer, employee or
agent of the Trustee. Any fees, expenses, reimbursements, or other charges which
the Trustee may be entitled to receive from the Company hereunder shall be due
and payable thirty (30) days after a request for payment has been made by the
Trustee, and if not otherwise paid, shall be a first lien upon any funds or
other property then or thereafter held hereunder by the Trustee. If any such
moneys are so applied, the Company shall be immediately obligated to restore the
moneys so applied.
Section 704. Resignation or Removal of Trustee. The Trustee may resign on
not less than sixty (60) days' notice given in writing to the Authority, the
Bondowners, the Bond Insurer and the Company, but such resignation shall not
take effect until a successor, approved by the Bond Insurer (which approval
shall not be unreasonably withheld), has been appointed and has assumed the
duties hereunder. The Trustee will promptly certify to the other parties that it
has
37
mailed such notice to all Bondowners and such certificate shall be conclusive
evidence that such notice was given in the manner required hereby. The Trustee
may be removed by written notice to the parties from the Bondowners representing
a majority in principal amount of the Bonds Outstanding (upon not less than
thirty (30) days written notice unless such removal is for cause), but no such
removal shall take effect until a successor has been appointed and assumed the
duties hereunder. A petition in a court of competent jurisdiction for removal of
the Trustee and the appointment of a successor may be filed by the Bondowners
representing not less than 25% in principal amount of the Bonds Outstanding.
Section 705. Successor Trustee. Any corporation or association which
succeeds to the corporate trust business of the Trustee as a whole, or
substantially as a whole, whether by sale, merger, consolidation or otherwise,
shall become vested with all the property, rights and powers of the Trustee
hereunder, without any further act or conveyance.
In case the Trustee resigns or is removed or becomes incapable of acting,
or becomes bankrupt or insolvent, or if a receiver, liquidator or conservator of
the Trustee or of its property is appointed, or if a public officer takes charge
or control of the Trustee, or of its property or affairs, a successor shall be
appointed by written notice from the Company to the Bond Insurer and the
Authority. The Company shall notify the Bondowners of the appointment in writing
within twenty (20) days from the appointment. The Company will promptly certify
to the successor Trustee that it has mailed such notice to all Bondowners and
such certificate will be conclusive evidence that such notice was given in the
manner required hereby. If no appointment of a successor is made within twenty
(20) days after the giving of written notice in accordance with Section 704 or
after the occurrence of any other event requiring or authorizing such
appointment, the outgoing Trustee or any Bondowner may apply to any court of
competent jurisdiction for the appointment of such a successor, and such court
may thereupon, after such notice, if any, as such court may deem proper, appoint
such successor. Any successor Trustee appointed under this section shall be a
trust company or a bank having the powers of a trust company that meets the
requirements of the Act and has a capital and surplus of not less than
$50,000,000. Any such successor Trustee shall notify the Authority and the
Company of its acceptance of the appointment and, upon giving such notice, shall
become Trustee, vested with all the property, rights and powers of the Trustee
hereunder, without any further act or conveyance. Such successor Trustee shall
execute, deliver, record and file such instruments as are required to confirm or
perfect its succession hereunder and any predecessor Trustee shall from time to
time execute, deliver, record and file such instruments as the incumbent Trustee
may reasonably require to confirm or perfect any succession hereunder.
38
ARTICLE VIII. THE AUTHORITY
Section 801. Limited Obligation. Under no circumstances shall the
Authority be obligated directly or indirectly to pay Project Costs, principal of
or premium, if any, and interest on the Bonds, or expenses of operation,
maintenance and upkeep of the Project Facilities except from Bond proceeds or
from funds received under this Agreement, exclusive of funds received hereunder
by the Authority for its own use. This Agreement does not create any debt of the
State of New Hampshire with respect to the Project Facilities other than a
special obligation of the Authority acting on behalf of the State of New
Hampshire pursuant to the Act. Nothing contained herein shall in any way
obligate the State of New Hampshire to raise any money by taxation or use other
public funds for any purpose in relation to the Project Facilities. Neither the
State of New Hampshire nor the Authority shall pay or promise to pay any debt or
meet any financial obligation to any person at any time in relation to the
Project Facilities except (i) from moneys received or to be received under the
provisions hereof or derived from the exercise of the Authority's right
hereunder, other than moneys received for its own purposes, or (ii) as may be
required by law other than the provisions of the Act. Nothing contained in this
Agreement shall be construed to require or authorize the Authority to operate
the Project Facilities itself or to conduct any business enterprise in
connection therewith.
Section 802. Rights and Duties of the Authority.
(a) Remedies of the Authority. Notwithstanding any contrary provision in
this Agreement, the Authority shall have the right to take any action or make
any decision with respect to proceedings for indemnity against the liability of
the Authority and for collection or reimbursement from sources other than moneys
or property held under this Agreement or subject to the lien hereof. The
Authority may enforce its rights under this Agreement which have not been
assigned to the Trustee by legal proceedings for the specific performance of any
obligation contained herein or for the enforcement of any other appropriate
legal or equitable remedy, and may recover damages caused by any breach by the
Company of its obligations to the Authority under this Agreement, including
court costs, reasonable attorney's fees and other costs and expenses incurred in
enforcing such obligations.
(b) Limitations on Actions. The Authority shall not be required to monitor
the financial condition of the Company or the physical condition of the Project
Facilities and, unless otherwise expressly provided, shall not have any
responsibility with respect to notices, certificates or other documents filed
with it hereunder. The Authority shall not be required to take notice of any
breach or default except when given notice thereof by the Trustee. The Authority
shall not be responsible for the payment of any rebate to the United States
under IRC ss.148(f). The Authority shall not be required to take any action
unless indemnity reasonably satisfactory to it is furnished for expenses or
liability to be incurred therein (other than the giving of notice). The
Authority, upon written request of the Bondowners or the Trustee, and upon
receipt of reasonable indemnity for expenses or liability, shall cooperate to
the extent reasonably necessary to enable the Trustee to exercise any power
granted to the Trustee by this Agreement. The Authority shall be entitled to
reimbursement pursuant to Section 803 to the extent that it acts
39
without previously obtaining full indemnity.
(c) Responsibility. The Authority shall be entitled to the advice of
counsel (who may be counsel for any party or for any Bondowner) and shall be
wholly protected as to any action taken or omitted to be taken in good faith in
reliance on such advice. The Authority may rely conclusively on any notice,
certificate or other document furnished to it under this Agreement and
reasonably believed by it to be genuine. The Authority shall not be liable for
any action taken by it in good faith and reasonably believed by it to be within
the discretion or power conferred upon it, or in good faith omitted to be taken
by it and reasonably believed to be beyond such discretion or power, or taken by
it pursuant to any direction or instruction by which it is governed under this
Agreement or omitted to be taken by it by reason of the lack of direction or
instruction required for such action under this Agreement, or be responsible for
the consequences of any error of judgment reasonably made by it. When any
payment, consent or other action by the Authority is called for by this
Agreement, the Authority may defer such action pending such investigation or
inquiry or receipt of such evidence, if any, as it may require in support
thereof. A permissive right or power to act shall not be construed as a
requirement to act, and no delay in the exercise of a right or power shall
affect the subsequent exercise thereof. The Authority shall in no event be
liable for the application or misapplication of funds, or for other acts or
defaults by any person or entity except by its own directors, officers and
employees. No recourse shall be had by the Company, the Trustee or any Bondowner
for any claim based on this Agreement or the Bonds against any director,
officer, employee or agent of the Authority unless such claim is based upon the
bad faith, fraud or deceit of such person. No covenant, obligation or agreement
of the Authority contained in this Agreement shall be deemed to be a covenant,
obligation or agreement of any present or future director, officer, employee or
agent of the Authority in his individual capacity, and no person executing a
Bond shall be liable personally thereon or be subject to any personal liability
or accountability by reason of the issuance thereof.
Section 803. Expenses of the Authority. The Company shall pay when due the
Authority's Service Charge and shall prepay or reimburse the Authority within
thirty (30) days after notice for all expenses (including reasonable attorney's
fees) incurred by the Authority in connection with the issuance and carrying of
the Bonds and all expenses reasonably incurred or advances reasonably made in
the exercise of the Authority's rights or the performance of its obligations
hereunder. Any fees, expenses, reimbursements or other charges which the
Authority may be entitled to receive from the Company hereunder, if not paid
within ten (10) days of when they are due, shall bear a late charge equal to 5%
of the amount overdue, and if not paid within sixty (60) days, shall bear
interest at 12% per annum.
Section 804. Matters to be Considered by Authority. In approving,
concurring in or consenting to action or in exercising any discretion or in
making any determination under this Agreement, the Authority may consider the
interests of the public, which shall include the anticipated effect of any
transaction on tax revenues and employment, as well as the interests of the
other parties hereto and the Bondowners; provided, however, nothing herein shall
be construed as conferring on any person other than the other parties and the
Bondowners any right to notice, hearing or participation in the Authority's
consideration, and nothing in this section shall be construed as conferring on
any of them any right additional to those conferred elsewhere
40
herein. Subject to the foregoing, the Authority will not unreasonably withhold
any approval or consent to be given by it hereunder.
Section 805. Actions by Authority. Any action which may be taken by the
Authority hereunder shall be deemed sufficiently taken if taken on its behalf by
its Chairman, its Vice Chairman or its Executive Director or by any other
director, officer or agent whom it may designate from time to time.
ARTICLE IX. THE BONDOWNERS
Section 901. Action by Bondowners. Subject to Subsections 311, 601(b),
602(a) and Section 1001 (as to the waivers and consents granted thereby),
Bondowners representing a majority in principal amount of the Bonds Outstanding
shall have the right at any time, by written notice to the Trustee and upon
offering it indemnity as provided in Subsection 702(e), to direct the Trustee
(i) in the granting of any consents, waivers or similar actions pertaining to
the Bonds, (ii) in the time, method and place of conducting all proceedings,
(iii) in the exercise of any rights or remedies available to the Trustee
hereunder, or (iv) in the exercise of any other right or power conferred upon
the Trustee for the protection of the Bondowners, provided that such direction
shall be in accordance with the provisions of law and this Agreement, and the
Trustee may take any other action determined proper by the Trustee which is not
inconsistent with such direction.
Except with respect to the matters provided below, Bondowners
representing a majority in principal amount of the Bonds Outstanding shall have
the right, at any time, by written notice to the Trustee and the offering of
indemnity as provided in Subsection 702(e), to direct the Trustee, as holder of
all of the Series K First Mortgage Bonds, to exercise the rights available to it
as holder of such bonds under the First Mortgage Bond Indenture, including,
without limitation, as to rendering notice to the First Mortgage Bond Trustee of
the occurrence of a default thereunder, the institution of any suit, action or
proceeding to enforce payments on the Series K First Mortgage Bonds which were
not paid when due or other proceeding in respect of the First Mortgage Bond
Indenture which the Trustee, as holder of the Series K First Mortgage Bonds, is
entitled to institute, and as to the time, place and method of any such
proceeding for any remedy available to the Trustee, as holder of the Series K
First Mortgage Bonds, subject however to compliance with the applicable
provisions of the First Mortgage Bond Indenture.
Where the First Mortgage Bond Trustee is required or permitted to take any
action under the First Mortgage Bond Indenture upon the direction,
authorization, consent, notice or request of the holders of a specified
percentage of principal amount of bonds outstanding thereunder or of outstanding
bonds thereunder which would be adversely affected by such action, including
with respect to acceleration of the maturity of such bonds under Section 10.1 of
the First Mortgage Bond Indenture, the time, method and place of proceedings and
waivers of events of default, as provided in Section 10.12 of the First Mortgage
Bond Indenture and amendments of the First Mortgage Bond Indenture under Article
15 thereof, each Bondowner shall be deemed the holder of its pro-rata portion of
the principal amount of Series K First Mortgage Bonds and shall have the right
to direct the Trustee whether or not to render such direction, authorization,
consent, notice or request under the First Mortgage Bond Indenture in respect of
such Bondowner's
41
pro-rata portion, whereupon the Trustee shall notify the First Mortgage Bond
Trustee of the action to be taken in respect of the applicable principal amount
of Series K First Mortgage Bonds.
Any request, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by Bondowners may be
contained in and evidenced by one or more writings of substantially the same
tenor signed by the Bondowners of the requisite percentage of principal amount
of Bonds Outstanding or their attorneys duly appointed in writing. Proof of the
execution of any such instrument, or of any instrument appointing any such
attorney, shall be sufficient for any purpose of this Agreement (except as
otherwise herein expressly provided) if made in the following manner, but the
Authority or the Trustee may nevertheless in its discretion require further or
other proof in cases where it deems the same desirable:
The fact and date of the execution by any Bondowner or his or her attorney
of such instrument may be proved by the certificate, which need not be
acknowledged or verified, of an officer of a bank or trust company satisfactory
to the Authority or to the Trustee or of any notary public or other officer
authorized to take acknowledgements of the deeds to be recorded in the state in
which he purports to act, that the person signing such request or other
instrument acknowledged to him or her the execution thereof, or by an affidavit
of a witness of such execution, duly sworn to before such notary public or other
officer. The authority of the person or persons executing any such instrument on
behalf of a corporate Bondowner may be established without further proof if such
instrument is signed by a person purporting to be the president or a vice
president of such corporation with a corporate seal affixed and attested by a
person purporting to be its clerk or secretary or an assistant clerk or
assistant secretary.
The ownership of Bonds and the amount, numbers and other identification,
and date of holding the same shall be proved by the registry books for the Bonds
maintained by the Trustee.
Any request, consent or vote of the owner of any Bond shall bind all
future owners of such Bond. Bonds owned or held by or for the account of the
Authority, the Company, or any related person to the Company within the meaning
of Section 147(a) of the IRC shall not be deemed Outstanding Bonds for the
purpose of any consent or other action by Bondowners.
42
ARTICLE X. AMENDMENTS AND MISCELLANEOUS
Section 1001. Amendments.
(a) Without Bondowners' Consent. The parties may from time to time, with
the consent of the Bond Insurer but without the consent of any Bondowner, amend
this Agreement in order to (i) cure any ambiguity, defect or omission in the
Agreement that does not materially adversely affect the interests of the
Bondowners, (ii) grant additional rights or security to the Trustee for the
benefit of the Bondowners, (iii) add additional Events of Default as shall not
be inconsistent with the provisions of this Agreement and which shall not
materially adversely affect the interests of the Bondowners, (iv) qualify this
Agreement under the Trust Indenture Act of 1939, as amended, or corresponding
provisions of federal laws from time to time in effect, or (v) make such other
provisions in regard to matters or questions arising under this Agreement as
shall not be inconsistent with the provisions of this Agreement and which shall
not materially adversely affect the interests of the Bondowners.
(b) With Bondowners' Consent. Except as set forth in Subsection 1001(a),
the parties may from time to time amend this Agreement with the consent of the
Bond Insurer and the owners of more than 50% in aggregate principal amount of
the Bonds Outstanding; provided, that no amendment shall be made which adversely
affects the rights of some but less than all the Bonds Outstanding without the
consent of the owners of more than 50% in aggregate principal amount of the
Bonds so affected; and provided further, that no amendment of this Agreement
shall be effective to (i) change the principal, premium or interest on any
Bonds, (ii) change the interest payment dates, maturity dates or redemption
provisions of any Bonds, (iii) reduce the percentage of Bondowners whose consent
is required for the amendment of this Agreement or (iv) modify the lien upon or
pledge of the payments and other revenues assigned and pledged hereunder,
without the consent, in each case, of the owner of each Bond which would be
affected by the action proposed to be taken. Any amendment of this Agreement
made under this or the preceding Subsection shall be accompanied by an opinion
of Bond Counsel reasonably satisfactory to the Trustee to the effect that the
amendment is permitted by this Agreement and that it will not affect the
exclusion of interest on the Bonds from gross income of the owners thereof for
federal income tax purposes. When the Trustee determines that the requisite
number of consents have been obtained for an amendment which requires Bondowner
consent, it shall, within ninety (90) days, file a certificate to that effect in
its records and give notice thereof to the Bondowners. No action or proceeding
to invalidate the amendment shall be instituted or maintained unless it is
commenced within sixty (60) days after such notice. The validity of the
amendment shall not be adversely affected by any failure to give notice or any
defect in the notice. A consent to an amendment may be revoked by a notice given
by the Bondowner and received by the Trustee prior to the Trustee's
certification that the requisite consents have been obtained.
Section 1002. Notices. All notices to the Authority, the Trustee, the Bond
Insurer, the Company, or the Bondowners unless otherwise specified shall be in
writing and shall be deemed sufficiently given if delivered by registered or
certified mail, postage prepaid, or delivered during business hours as follows:
(i) to the Authority at 14 Dixon Avenue, Suite 101, Concord, New
43
Hampshire 03301, attention of the Executive Director, (ii) to the Trustee at 225
Asylum Street, 23rd Floor, Hartford, Connecticut 06103, attention of Corporate
Trust Department, (iii) to the Company at 1000 Elm Street, Manchester, New
Hampshire 03105, attention of Assistant Treasurer - Finance, with a copy to
Northeast Utilities Service Company, P.O. Box 270, Hartford, Connecticut
06141-0270 (if by U.S. Mail) and 107 Selden Street, Berlin, Connecticut 06037
(if by courier), attention of Assistant Treasurer - Finance, (iv) to the Bond
Insurer at 113 King Street, Arrmonk, New York 10504, Attention: IPM-PCF, or, as
to all of the foregoing, to such other address as the addressee shall have
indicated by prior written notice to the one giving notice. All notices to a
Bondowner shall be in writing and shall be deemed sufficiently given if sent by
first class mail, postage prepaid, to the Bondowner at the address shown on the
registration books for the Bonds maintained by the Trustee. A Bondowner may
direct the Trustee to change its address as shown on the registration books by
written notice to the Trustee. All notices to Bondowners shall identify the
Bonds by name, CUSIP number, date of original issuance, maturity date, and such
other descriptive information as may be needed to identify accurately the Bonds.
All notices sent to Bondowners by the Trustee shall simultaneously be sent
by registered or certified mail, postage prepaid, to all registered securities
depositories that are registered owners of the Bonds, provided that the failure
to give such notice shall not affect the validity of any notice given to
Bondowners.
Notice hereunder may be waived prospectively or retroactively by the
person entitled to the notice, but no waiver shall affect any notice requirement
as to other persons.
Section 1003. Agreement Not for the Benefit of Other Parties. This
Agreement is not intended for the benefit of and shall not be construed to
create rights in parties other than the Authority, the Company, the Trustee, the
Bond Insurer, the Bondowners and the respective directors, members, officers,
employees and agents of the Authority and the Trustee to the extent specified in
Sections 702 and 802.
Section 1004. Severability. In the event that any provision of this
Agreement shall be held to be invalid in any circumstance, such invalidity shall
not affect any other provisions or circumstances.
Section 1005. Counterparts. This Agreement may be executed and delivered
in any number of counterparts, each of which shall be deemed to be an original;
but such counterparts together shall constitute one and the same instrument.
Section 1006. Captions. The captions and table of contents of this
Agreement are for convenience only and shall not affect the construction hereof.
Section 1007. Governing Law. This Agreement shall be governed by the laws
of the State of New Hampshire.
Section 1008. Payment Date Not a Business Day. If any payment, redemption
or maturity
44
date for principal, premium or interest shall be (i) a Sunday or a legal
holiday, or (ii) a day on which banking institutions are authorized pursuant to
law to close and on which the corporate trust office of the Trustee or the First
Mortgage Bond Trustee is not open for business, then the payment thereof may be
made on the next succeeding day not a day specified in (i) or (ii) with the same
force and effect as if made on the specified payment date and no interest shall
accrue for the period after the specified payment date.
45
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed under seal all as of the date first above written.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal)
By:_____________________________________
Jack Donovan
Executive Director
PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE
(Seal)
By:_____________________________________
Name: Randy A. Shoop
Title: Assistant Treasurer -
Finance
STATE STREET BANK AND TRUST
COMPANY, as Trustee
(Seal)
By:_____________________________________
Name:
Title:
46
EXHIBIT A
THE PROJECT FACILITIES
The Project Facilities to be refinanced by the Bonds consist of certain
air or water pollution control and sewage or solid waste disposal facilities at
the Seabrook Station Plant, Unit No. 1, in which Public Service Company of New
Hampshire had, at the time of issue of the 1991 Series B Bonds, a 35.56942
percent ownership interest. The Project Facilities include the following:
Waste Water Run-Off System
The Waste Water Run-Off System collects and treats yard area drainage to
remove pollutants. The System includes catch basins, yard waste water drain
pipes, and a site settling pond.
Chemical and Oily Waste Treatment System
The Chemical and Oily Waste Treatment System collects, stores, processes,
treats and disposes of non-radioactive chemical and oily wastes. The wastes
result from construction, start-up and operation of the Seabrook Station Plant.
The wastes are collected and treated to remove pollutants. The System includes
tanks, an acid and caustic handling system, waste lagoons, system flush piping,
and oil separator, curbs and drains, pipes, valves, transfer pumps, controls and
instrumentation and related support equipment.
Sanitary Waste System
Sanitary waste is collected, treated and disposed of by the Sanitary Waste
System. The System includes sanitary drains, sumps and pumps, a holding tank, a
pump station, a sewage treatment plant, piping, transfer pumps and related
support equipment.
Radioactive Gaseous Waste System
The Radioactive Gaseous Waste System collects, processes, stores and
treats radioactive gaseous waste produced during normal operations. The System
includes the following components: a main gas collection header, a waste gas
condenser with associated primary cooling water components, gas chiller
compressor units, iodine guard beds, a regeneration subsystem for dryers, waste
gas dryers, a waste gas compressor package, ambient carbon delay beds,
particulate filters, an after cooler, a hydrogen surge tank, a waste gas
radiation monitor, an equipment vent system, a hydrogenated vent header, and
associated piping, valves, controls and instrumentation.
Exhaust Filtration System
The Exhaust Filtration System collects, filters and discharges exhaust
containing low level radioactive contamination resulting from normal operations.
The System includes exhaust filters, exhaust fans, exhaust ducts, plenums,
dampers, piping, flow control valves, and controls and instrumentation.
A-1
Liquid Radwaste System
The Liquid Radwaste System collects, processes, treats, recycles and
disposes of low level radioactive liquid waste resulting from normal operations.
The System includes tanks, filters, strainers, pumps, a reboiler, an evaporator,
an evaporator distillate condenser, an evaporator distillate accumulator, an
evaporator distillate cooler, an evaporator bottoms cooler, a waste
demineralizer and filter, equipment drains, chemical drains, a radiation
monitor, and associated controls and instrumentation.
Boron Recycle System
The Boron Recycle System collects, stores, treats, recycles and disposes
of reactor coolant letdown during normal operations. This System is required to
maintain reactor coolant letdown in accordance with federal pollution control
standards as to radioactivity. The System includes the following components:
Drain tanks, a degasifier, a preheater, a degasifier regenerative heat
exchanger, trim coolers, a degasifier prefilter, cesium removal ion exchangers,
recovery filters, waste storage tanks, recovery evaporator packages, recovery
test tanks, recovery demineralizers, recovery demineralizer filters, a letdown
rehead heat exchanger, a letdown chiller heat exchanger, a letdown moderating
heat exchanger, a chiller surge tank, a chiller, thermal regenerative
demineralizers, radiation monitors, associated pumps, piping and valves, and
controls and instrumentation.
Steam Generator Blowdown Treatment System
The Steam Generator Blowdown Treatment System collects, processes, stores
and treats steam generator blowdown for discharge or recycle during normal
operation. This is necessary in compliance with pollution control requirements
which limit the discharge of untreated steam generator blowdown. The System
includes the following components: Blowdown evaporators, an evaporator
distillate condenser, an evaporator condensate accumulator, an evaporator
distillate pump, an evaporator condensate cooler, an evaporator bottoms pump, an
evaporator bottoms cooler, blowdown demineralizers, acid and caustic systems,
blowdown heat exchangers, and associated piping, controls and instrumentation.
Solid Radwaste System
The Solid Radwaste System collects, stores, packages and prepares solid
radioactive waste for disposal. Radioactive solid wastes processed by this
System include spent demineralizer resins, expended filter cartridges,
evaporator concentrates as well as dry active waste consisting of rags,
clothing, paper and other trash. The System includes the following components: A
spent resin storage tank, an evaporator bottoms storage tank, associated
collection piping, pumps and valves, a dry waste compactor, a filter transfer
vehicle, and associated controls and instrumentation.
A-2
Waste Processing Building
The Waste Processing Building is a reinforced concrete structure which
houses equipment used for exempt facilities. The purpose of this building is to
house the air and water pollution control facilities and the solid waste
disposal facilities.
Auxiliary Building
The Auxiliary Building is a reinforced concrete structure which houses
both pollution control and production related equipment. Pollution control
facilities located in the Auxiliary Building include portions of the liquid
radwaste and gaseous radwaste systems. The cost of the Auxiliary Building and
general support equipment has been allocated to the exempt facilities according
to the ratio of space used for qualified equipment to the total space used in
the building for all equipment.
Spent Nuclear Fuel Facility
The Spent Nuclear Fuel Facility is located in a separate building with
enclosed fuel handling equipment for production functions and for spent fuel
storage. The fuel handling facility includes a Seismic Category 1 structure
containing a spent fuel pool with racks, spent fuel cooling and purification
systems, a new fuel storage area, a spent fuel cask loading pit, and a cask
washdown area. Also included are cranes and equipment supporting the fuel
handling operations as well as the transfer canal leading the reactor
containment. The cost of the Spent Nuclear Fuel Facility is determined through
an allocation of the cost of the overall fuel facility between spent fuel
facilities and production facilities.
Circulating Water System
The Circulating Water System will provide cooling water to the main
condensers of Seabrook Station. The Circulating Water System is a once-through
system using sea water from the Atlantic Ocean to remove the heat of
condensation from the steam cycle and to dispose of that heat in an
environmentally acceptable manner. The points of inlet and discharge of the
cooling water are offshore, east of Hampton Beach, New Hampshire.
The System includes the following structures: Two 19-foot inside diameter
tunnels, lined with reinforced concrete, which connect the plant with the
offshore inlet and outlet structures; a pumphouse, located at the plant site
which encloses traveling screens and pumps for the circulating water and service
water systems; and a piping system at the plant site, for the most part
underground, interconnecting the tunnels, the pumphouse, and the condensers.
The tunnels extend through the underlying rock in an east-west direction
at an elevation between 200 and 250 feet below sea level. They end at the plant
site with two 19-foot diameter vertical shafts, which reach above grade
transforming at the top into two transition boxes open to the atmosphere. At the
offshore end, the intake tunnel terminates with three 9-foot inside diameter
vertical shafts connecting to three submerged inlet heads. The discharge tunnel
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terminates with eleven 5-foot inside diameter vertical shafts, each connecting
to a submerged bifurcated diffuser head.
Service Water Cooling Tower System
The Service Water Cooling Tower System disposes of waste heat from the
plant service water system. Waste heat from equipment throughout the plant is
collected by the service water cooling system piping. The service water
transfers waste heat to the service water cooling tower, which discharges heat
to the atmosphere, thereby controlling discharge of waste heat to the natural
water resources adjacent to the station. The Service Water Cooling Tower System
components include the service water cooling tower, service water piping, pumps
and associated electrical service, mechanical equipment, controls and
instrumentation.
Screen Wash System
The Screen Wash System collects, stores and disposes of debris removed
from the circulating and service water systems. This debris is solid waste with
no market or other value. After removal, the debris is transferred to a landfill
for final disposal. The components of the Screen Wash System include the screen
wash pumps, trash trough, trash container, piping and valves, associated
electrical service, mechanical equipment, controls and instrumentation
A-4
EXHIBIT B
SERIES C SEABROOK POLLUTION CONTROL FACILITIES AGREEMENT
This Series C Seabrook Pollution Control Facilities Agreement (this
"Facilities Agreement") is entered into as of December 19, 2001 by the Business
Finance Authority of the State of New Hampshire (with its successors, the
"Authority"), a body corporate and politic created under New Hampshire Revised
Statutes Annotated 162-A:3; Public Service Company of New Hampshire (with its
successors, the "Company"), a New Hampshire corporation; North Atlantic Energy
Corporation (with its successors, "NAEC"), a New Hampshire corporation; and
State Street Bank and Trust Company, a Massachusetts trust company, as Trustee
(with its successors, the "Trustee"), under a Series C Loan and Trust Agreement
dated as of October 1, 2001 (the "LTA") among the Authority, the Company and the
Trustee, which secures the Authority's 5.45% $108,985,000 in aggregate principal
amount Pollution Control Revenue Bonds (Public Service Company of New Hampshire
Project - 2001 Tax-Exempt Series C) (the "Bonds"). Capitalized terms not
otherwise defined herein shall have the meaning given them in the LTA.
This Facilities Agreement is entered into pursuant to Section 405 of the
LTA in connection with the issuance of the Bonds by the Authority on behalf of
the Company and the proposed transfer by NAEC of its interest in the Station
(including the Project Facilities) to an unaffiliated party. The purpose of this
Facilities Agreement is to ensure the continued exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes
and to satisfy certain requirements of the Authority with respect to facilities
financed under the Act. This Facilities Agreement shall remain in effect so long
as NAEC owns the Project Facilities and until no Bonds remain Outstanding.
In consideration of the mutual promises contained in this Facilities
Agreement, the rights conferred and the obligations assumed hereby, and other
good and valuable consideration, the receipt of which is hereby acknowledged,
each of the Company, NAEC, the Authority and the Trustee agree, assign,
covenant, grant, pledge, promise, represent and warrant as set forth herein for
their own benefit and for the benefit of the Bondowners.
Section 1. Representations and Covenants of the Company. The Company
represents, warrants, covenants and agrees as follows:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Hampshire; is duly qualified to
do business and in good standing in each jurisdiction in which the failure so to
qualify would have a material adverse affect on its business or properties; and
has full corporate power to enter into this Facilities Agreement.
(b) This Facilities Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company as provided herein and in the LTA,
subject to bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights and to the exercise of judicial discretion in
appropriate cases.
B-1
(c) No Default or Event of Default exists under the LTA.
(d) The Company has obtained all regulatory approvals necessary to enter
into this Facilities Agreement and all such approvals have become final.
(e) The Company's execution and delivery of this Facilities Agreement does
not violate or constitute a default under the Company's charter or by-laws, any
applicable law, any order or decree of any court or governmental authority
having jurisdiction over the Company, or any agreement or instrument binding on
the Company or its properties.
Section 2. Representations and Covenants of NAEC. NAEC represents,
warrants, covenants and agrees as follows:
(a) NAEC is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Hampshire; is duly qualified to do
business and in good standing in the State of New Hampshire and in each
jurisdiction in which the failure so to qualify would have a material adverse
affect on its business or properties; and has full corporate power to enter into
this Facilities Agreement.
(b) This Facilities Agreement has been duly authorized, executed and
delivered by NAEC and constitutes a valid and binding obligation of NAEC
enforceable against NAEC as provided herein, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
and to the exercise of judicial discretion in appropriate cases.
(c) NAEC has obtained all regulatory approvals necessary to enter into
this Facilities Agreement and all such approvals have become final.
(d) NAEC's execution and delivery of this Facilities Agreement does not
violate or constitute a default under NAEC's charter or by-laws, any applicable
law, any order or decree of any court or governmental authority having
jurisdiction over NAEC, or any agreement or instrument binding on NAEC or its
properties.
(e) NAEC will maintain its corporate existence and its qualification to do
business and good standing under the laws of the State of New Hampshire and will
maintain itself as a foreign corporation duly qualified to do business and in
good standing, where applicable, in each jurisdiction in which the failure to so
qualify would have a material adverse effect upon its business or properties.
NAEC shall not merge or consolidate with or sell all or substantially all of its
assets to another entity, except that the NAEC may so merge or consolidate with
or sell all or substantially all of its assets to another corporation if (i) the
surviving or transferee corporation is qualified to do business in New
Hampshire, and (ii) the surviving or transferee corporation (if not NAEC) has
assumed in writing all of NAEC's obligations hereunder.
Section 3. Use of the Project. (a) Notwithstanding any provision herein or
in the LTA to the contrary, NAEC will not operate the Project Facilities in any
manner, and will not take or omit any action or permit any action to be taken or
omitted with the result that interest on the
B-2
Bonds is included in the gross income of the owners thereof for federal income
tax purposes. NAEC's use of the Project Facilities (or facilities replacing the
same) shall be in furtherance of the purpose of air or water pollution control
or sewage or solid waste disposal and in compliance with the Act.
(b) Notwithstanding any provision herein or in the LTA to the contrary,
NAEC shall not permit the Project Facilities to fail to qualify as (1)
"industrial facilities" under the Act, (2) a facility described in Section
1312(a) of the Tax Reform Act of 1986, or (3) "sewage or solid waste disposal
facilities" or "air or water pollution control facilities" within the meaning of
Section 103(b)(4)(E) or (F) of the 1954 Code. NAEC acknowledges that it is fully
familiar with the physical condition of the Project Facilities and that it is
not relying on any representation of any kind by the Authority or the Trustee
concerning the nature or condition thereof. Neither the Authority nor the
Trustee shall be liable to NAEC or any other person for any latent or patent
defect in the Project Facilities.
(c) In the maintenance, improvement and operation of the Project
Facilities, NAEC will comply in all material respects with all applicable
building, subdivision, zoning and land use, environmental protection, sanitary
and safety and other laws, rules and regulations, and will not permit any
nuisance thereat and will, to the extent of its ownership and control, permit no
nuisance to be committed thereat by others while NAEC is, or is entitled to be,
in possession thereof. It shall not be a breach of this section if NAEC fails to
comply with such laws, rules and regulations during any period in which NAEC
shall in good faith be diligently contesting the validity thereof.
(d) NAEC shall pay in a timely manner all costs of maintaining and
operating the Project Facilities, including without limitation all taxes,
excises and other governmental charges lawfully levied thereon or with respect
to its interests therein or use thereof to the extent of NAEC's interest
therein. It shall not be a breach of this section if NAEC fails to pay any such
costs, taxes or charges during any period in which NAEC shall in good faith be
contesting the validity or amount thereof and no foreclosure proceedings have
been commenced, unless the procedures applicable to such contest require payment
thereof and proceedings for their refund or abatement.
(e) NAEC shall not sell, lease, transfer or otherwise dispose of the
Project Facilities (other than the grant of a mortgage pursuant to a financing
transaction) unless (i) it obtains the consent of the Authority, which consent
shall not be unreasonably withheld, provided, however, that no such consent
shall be required if such transaction has been approved by or consented to by
the New Hampshire Public Utilities Commission; (ii) it obtains an opinion of
Bond Counsel addressed to and reasonably satisfactory to the Trustee and the
Authority that such sale, lease, transfer or other disposition will not affect
the exclusion of the interest on the Bonds from the gross income of the owners
thereof for federal income tax purposes; and (iii) the sale, lease, transfer or
other disposition is made pursuant to a written agreement executed and delivered
by NAEC and the transferee, under which agreement the transferee agrees to be
bound by covenants substantially similar in all material respects to the
covenants set forth in Attachment 1 hereto.
NAEC shall not make any material change in the purposes for which the
Project Facilities
B-3
are used without the consent of the Authority, which consent shall not be
unreasonably withheld. NAEC at its own expense may alter, remodel or improve the
Project Facilities and construct other facilities at the site of the Project
Facilities, provided such action shall not result in any substantial change in
the Project Facilities or the character of the activities conducted by NAEC at
the Project Facilities site without the consent of the Authority, which consent
shall not be unreasonably withheld.
(f) The Authority and the Trustee and their respective duly authorized
agents shall have the right at all reasonable times and upon the furnishing of
reasonable notice under the circumstances to examine the books and records of
NAEC relating to the Project Facilities.
(g) The undertakings of NAEC contained in Subsections 3(b), (c), (d) and
(e) are limited to those consistent with NAEC's undivided percentage interest in
the facilities of which the Project Facilities are a part.
Section 4. Indemnification by NAEC. NAEC, regardless of any agreement to
maintain insurance, shall and does hereby indemnify the Authority and the
Trustee against (a) any and all claims by any person related to the
participation of the Authority or the Trustee in the financing of the Project
Facilities, including without limitation claims arising out of any condition of
the Project Facilities or Station or the construction, use, occupancy or
management thereof; any accident, injury or damage to any person occurring in or
about the Station; any breach by NAEC of its obligations under this Facilities
Agreement; any act or omission of NAEC or any of its agents, contractors,
servants, employees or licensees; and (b) all costs, counsel fees, expenses or
liabilities reasonably incurred in connection with any such claim or any action
or proceeding brought thereon. In case any action or proceeding is brought
against the Authority or the Trustee by reason of any such claim, NAEC will
defend the same at its expense upon notice from the Authority or the Trustee,
and the Authority or the Trustee, as the case may be, will cooperate with NAEC,
at the expense of NAEC, in connection therewith.
Section 5. Failure to Comply. NAEC shall immediately notify the Authority,
the Company and the Trustee of any failure to observe or perform any of its
covenants or agreements contained herein, and thereafter shall keep the
Authority, the Company and the Trustee informed with respect to any curative
action instituted by NAEC in order to cure such failure.
Section 6. Amendment. This Facilities Agreement may be amended by the
parties hereto, provided, however, that in connection with any amendment the
Company or NAEC shall furnish the Authority and the Trustee with an opinion of
Bond Counsel stating that the amendment will not impair the exclusion of
interest on the Bonds from gross income of the owners thereof for federal income
tax purposes.
Section 7. Agreement Not for the Benefit of Other Parties. This Facilities
Agreement is not intended for the benefit of and shall not be construed to
create rights in parties other than the Authority, the Company, NAEC, the
Trustee and the Bondowners.
Section 8. Severability. In the event that any provision of this
Facilities Agreement shall
B-4
be held to be invalid in any circumstance, such invalidity shall not affect any
other provisions or circumstances.
Section 9. Counterparts. This Facilities Agreement may be executed and
delivered in any number of counterparts, each of which shall be deemed to be an
original; but such counterparts together shall constitute one and the same
instrument.
Section 10. Governing Law. This Facilities Agreement shall be governed by
the laws of the State of New Hampshire.
IN WITNESS WHEREOF, the parties have caused this Facilities Agreement to
be duly executed as of the date first above written.
BUSINESS FINANCE AUTHORITY OF
THE STATE OF NEW HAMPSHIRE
By:_____________________________________
Jack Donovan
Executive Director
PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE
By:_____________________________________
Randy A. Shoop
Assistant Treasurer-Finance
NORTH ATLANTIC ENERGY CORPORATION
By:_____________________________________
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:_____________________________________
B-5
ATTACHMENT 1 TO
SERIES C SEABROOK POLLUTION CONTROL FACILITIES AGREEMENT
COVENANTS (SUBSTANTIALLY SIMILAR IN ALL MATERIAL RESPECTS) TO BE INCLUDED IN
PURCHASE AND SALE AGREEMENT
Section 1.1. [Caption]
(a) Pollution Control Revenue Bonds.
(i) The Buyer acknowledges that:
(A) The Pollution Control Facilities have been financed, and
refinanced, in whole or in part, with proceeds of the issuance and sale of
the Pollution Control Bonds;
(B) The Company is the economic obligor and conduit borrower in
respect of certain of the Pollution Control Bonds, as specified in
Schedule _____;
(C) The interest paid or accrued on the Pollution Control Bonds is
not included in the gross income of the holders of the Pollution Control
Bonds (the "PC Bondholders") for purposes of federal income taxation;
(D) Pursuant to the Internal Revenue Code of 1954, as amended, and
the Code, the basis for the federal income tax exclusion for interest
payable to the PC Bondholders is the use of the Pollution Control
Facilities for certain qualified purposes which include (I) the abatement
or control of air or atmospheric pollution or contamination, (II) the
abatement or control of water pollution or contamination, (III) sewage
disposal and/or (IV) the disposal of solid waste;
(E) The use of all or part of the Pollution Control Facilities for a
purpose other than the qualifying purpose or purposes described in
subclause (D) above for which the Pollution Control Bonds that financed or
refinanced them were issued may cause (I) the interest payable on all or
part of the Pollution Control Bonds to be includable in the federal gross
income of the PC Bondholders possibly with retroactive effect, unless
remedial action is promptly taken to redeem or defease the Pollution
Control Bonds or a portion thereof, and/or (II) the deductibility of the
interest payable by the Company on all or part of the Pollution Control
Bonds to be disallowed by Section 150(b) of the Code; and
(F) Any breach by the Buyer or any subsequent transferee of all or
any part of the Pollution Control Facilities of its obligations under this
Section 1.1(a) could result in the incurrence by the Company of additional
costs and expenses, including, but not limited to, an increase in the rate
of interest required to be paid to the PC Bondholders, liability to
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some or all of the PC Bondholders for their failure to include interest
payable on the Pollution Control Bonds in their respective federal gross
income in the event of a final determination of taxability by the IRS,
loss of the interest deduction to the Company under Section 150(b) of the
Code and transaction costs relating to any refinancing, redemption and/or
defeasance of all or part of the Pollution Control Bonds.
(ii) In order to avoid any or all of the consequences described in clauses
(E) and (F) above, the Buyer agrees that it will not use, or permit the use of,
all or part of the Pollution Control Facilities for any purpose except (x) the
current use of such Pollution Control Facilities or (y) as sewage or solid waste
disposal facilities or air or water pollution control facilities within the
meaning of Section 103(b)(4)(E) or (F) of the Internal Revenue Code of 1954, as
amended, as contemplated by the tax compliance documents or non-arbitrage
certificates for the Pollution Control Bonds that financed or refinanced such
Pollution Control Facilities (copies of which with respect to all of the
Pollution Control Facilities have been provided to the Buyer by NAEC or the
Company), unless the Buyer shall have obtained at its own expense an opinion of
nationally recognized bond counsel reasonably acceptable to NAEC or the Company
("Bond Counsel") addressed to and reasonably satisfactory to NAEC and the
Company that such proposed change in use of the Pollution Control Facilities or
part thereof will not impair (x) the exclusion from gross income of the interest
on any Pollution Control Bonds for federal income tax purposes or (y) the
deductibility of the interest payable on any Pollution Control Bonds by the
Company under Section 150(b) of the Code.
(iii) The provisions of Section 1.1(a)(ii) shall not prohibit the Buyer
from ceasing to operate, maintain or repair any element or item of the Pollution
Control Facilities, suspending the operation of the Pollution Control Facilities
on a temporary basis, or terminating the operation of the Pollution Control
Facilities on a permanent basis and shutting down the Pollution Control
Facilities; provided, however, that the Pollution Control Facilities, in whole
or in part, shall not be maintained in such a manner as to prevent their being
reactivated and used for a purpose permitted by Section 1.1(a)(ii), nor be
retired and/or decommissioned, dismantled or sold as scrap, unless the Buyer has
obtained at its own expense an opinion of Bond Counsel addressed to and
reasonably satisfactory to NAEC and the Company that this action will not impair
either (x) the exclusion from gross income of the interest on any Pollution
Control Bonds for federal income tax purposes or (y) the deductibility of the
interest payable with respect to any Pollution Control Bonds by the Company
under Section 150(b) of the Code. The Buyer shall provide to NAEC and the
Company written notice at least thirty (30) days in advance of any permanent
shut-down, retirement, abandonment or decommissioning of Seabrook or the
Pollution Control Facilities in whole or in part and shall in good faith by
written notice to NAEC and the Company describe the affected property so that
NAEC and the Company can determine which issue or issues of Pollution Control
Bonds financed or refinanced such affected property.
(iv) It is expressly understood and agreed that this Section 1.1(a) shall
not prohibit the use by the Buyer of tax-exempt bonds to finance or refinance
any improvements to the Pollution Control Facilities made on or after the
Closing Date or any assets other than the Pollution Control Facilities, provided
that no breach by the Buyer of its covenants in this Section 1.1(a) shall result
from such improvements.
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(v) The Buyer shall indemnify NAEC and the Company for any costs and
expenses incurred by NAEC or the Company, respectively, solely as a result of
any breach by the Buyer of its covenants in this Section 1.1(a).
(vi) NAEC shall, or shall cause the Company to, notify the Buyer in
writing of the maturity or redemption of any issue of the Pollution Control
Bonds.
(vii) If NAEC or the Company to shall have notified the Buyer that it has
refinanced any of the Pollution Control Bonds with new bonds, the provisions of
this Section 1.1(a), if applicable, shall apply with respect to such new bonds
as though they were the Pollution Control Bonds.
(viii) The Buyer and any transferee or subsequent transferee will not sell
or otherwise transfer all or part of the Pollution Control Facilities unless its
transferee covenants in writing for the benefit of NAEC and the Company to
comply with and to satisfy the covenants of this Section 1.1(a) (including
without limitation the covenants of this clause (viii)) with respect to its
ownership and use of such Pollution Control Facilities.
(ix) The covenants of this Section 1.1(a) shall survive Closing and shall
continue in effect and bind the Buyer and any transferee or subsequent
transferee of all or part of the Pollution Control Facilities so long as any of
the Pollution Control Bonds remain outstanding.
RELATED DEFINITIONS
"Agreement" means this [Purchase and Sale Agreement], together with
Schedules and Exhibits hereto, as the same may be amended from time to time.
"Bond Counsel" has the meaning set forth in Section 1.1(a)(ii).
"Buyer" [define as the buyer under the Purchase and Sale Agreement].
"Closing" means the closing of the transactions contemplated by this
Agreement.
"Closing Date" means the date on which the Closing takes place.
"Company" [define to mean the Company, as defined in the Facilities
Agreement].
"Code" means the Internal Revenue Code of 1986, as amended.
"Exhibit" means an exhibit to this Agreement.
"Facilities Agreement" means the Series C Seabrook Pollution Control
Facilities Agreement to which this Attachment 1 is attached.
"IRS" means the Internal Revenue Service or any successor agency.
B-8
"LTA" means the LTA, as defined in the Facilities Agreement.
"NAEC" [define to mean NAEC, as defined in the Facilities Agreement].
"PC Bondholders" has the meaning set forth in Section 1.1(a)(i)(C).
"Pollution Control Bonds" [define to include the Bonds, as defined in the
LTA.].
"Pollution Control Facilities" [define to include the Project Facilities,
as defined in the LTA.].
"Schedule" means a schedule to this Agreement.
"Seabrook" [define to mean the Station, as defined in the LTA].
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Table of Contents
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