Exhibit 4.2.21
Connecticut Development Authority
and
The Connecticut Light and Power Company
LOAN AGREEMENT
Dated as of September 1, 1993
Connecticut Development Authority
$245,500,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993A Series)
TABLE OF CONTENTS
Page
PREAMBLE ................................................ 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 5
Section 1.2. Interpretation....................... 13
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... 15
Section 2.2. Limitation of Control by Borrower.... 16
Section 2.3. Representations by the Borrower...... 17
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 20
Section 3.2. Other Amounts Payable................ 21
Section 3.3. Manner of Payment.................... 22
Section 3.4. Obligation Unconditional............. 22
Section 3.5. Security Clauses..................... 22
Section 3.6. Issuance of Bonds.................... 22
Section 3.7. Use of Priority Amounts.............. 22
Section 3.8. Effect of Drawing Under Letter
of Credit............................ 23
Section 3.9. Effective Date and Term.............. 23
Section 3.10. Borrower's Purchase of Bonds......... 23
Section 3.11. Letter of Credit..................... 24
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility........... 24
Section 3.13. Securities Laws...................... 26
Section 3.14. New York Paying Agent................ 26
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 27
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 27
Section 4.3. Taxes................................ 27
Section 4.4. Insurance............................ 28
Section 4.5. Compliance with Law.................. 28
Section 4.6. Maintenance and Repair............... 28
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 30
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 30
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 30
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 31
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 31
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 34
Section 6.4. Covenant as to Project Use........... 35
Section 6.5. Further Assurances and Corrective
Instruments.......................... 37
Section 6.6. Covenant by Borrower as to Compliance
with Indenture....................... 37
Section 6.7. Assignment of Agreement or Note...... 37
Section 6.8. Inspection........................... 37
Section 6.9. Default Notification................. 38
Section 6.10. Covenant Against Discrimination...... 38
Section 6.11. Authority Costs and Expenses......... 38
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 39
Section 7.2. Remedies on Default.................. 40
Section 7.3. Remedies Upon Project Use Default.... 41
Section 7.4. No Duty to Mitigate Damages.......... 41
Section 7.5. Remedies Cumulative.................. 42
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 43
Section 8.2. Notice by the Borrower of Optional
Prepayment........................... 45
Section 8.3. Mandatory Prepayment on Taxability... 45
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events.................... 45
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 46
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 46
Section 9.3. Force Majeure........................ 46
Section 9.4. Amendments........................... 47
Section 9.5. Notices.............................. 47
Section 9.6. Prior Agreements Superseded.......... 47
Section 9.7. Execution of Counterparts............ 48
Section 9.8. Time................................. 48
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project
Connecticut Development Authority
The Connecticut Light and Power Company
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1993 by and
between the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the
State of Connecticut, and The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended (the "Act"), declares
that there is a continuing need in the State (1) for economic development
and activity to provide and maintain employment and tax revenues and to
control, abate and prevent pollution to protect the public health and
safety and (2) for assistance to public service businesses providing
transportation and utility services in the State, and that the availability
of financial assistance and suitable facilities are important inducements
to industrial and commercial enterprises to remain or locate in the State
and to provide industrial, recreation, urban and public service projects;
and
WHEREAS, the Act provides that (1) the term "project" as used therein
means any facility, plant, works, system, building, structure, utility,
fixture or other real property improvement located in the State, and the
land on which it is located or which is reasonably necessary in connection
therewith, which is of a nature or which is to be used or occupied by any
person for purposes which would constitute it as an economic development
project, recreation project, urban project, public service project or
health care project, and any real property improvement reasonably related
thereto, and (2) that a project may also include or consist exclusively of
machinery, equipment or fixtures; and
WHEREAS, the Act defines economic development project to include
"any project which is to be used or occupied by any person for . . . (2)
controlling, abating, preventing or disposing of land, water, air or other
environmental pollution . . . or (3) the conservation of energy or the
utilization of cogeneration technology or solar, wind, hydro, biomass or
other renewable sources to produce energy for any industrial or commercial
application."
WHEREAS, the Act provides that the Authority shall have power (1) to
determine the location and character of any project to be financed under
the provisions of the Act; (2) to purchase, receive by gift or otherwise,
lease, exchange, or otherwise acquire, and construct, reconstruct, improve,
maintain, equip and furnish one or more projects, including all real and
personal property which the Authority may deem necessary therewith, and to
enter into a contract with a person therefor upon such terms and conditions
as the Authority shall determine to be reasonable, including but not
limited to reimbursement for the planning, designing, financing,
construction, reconstruction, improvement, equipping, furnishing, operation
and maintenance of reserve and insurance funds with respect to the
financing of the project; (3) to extend credit or make loans to any person
for the planning, designing, financing, acquiring, constructing,
reconstructing, improving, equipping and furnishing of a project and for
the refinancing of existing indebtedness with respect to any facility or
part thereof which would qualify as a project in order to facilitate
substantial improvements thereto, which credits or loans may be secured by
loan agreements, mortgages, contracts and all other instruments or fees and
charges, upon such terms and conditions as the Authority shall determine to
be reasonable in connection with such loans, including provision for the
establishment and maintenance of reserve and insurance funds and in the
exercise of powers granted in the the Act in connection with a project for
such person, to require the inclusion in any contract, loan agreement or
other instrument, such provisions for the construction, use, operation and
maintenance and financing of a project as the Authority may deem necessary
or desirable; (4) to issue its bonds for such purposes, subject to the
approval of the Treasurer of the State; and, (5) as security for the
payment of the principal or redemption price, if any, of and interest on
any such bonds, to pledge or assign such a loan, lease or sale agreement
and the revenues and receipts derived by the Authority from such a project;
and
WHEREAS, by resolutions adopted October 24, 1973; June 14, 1977; July
10, 1984 and March 12, 1985, the Authority has authorized the issuance of
$11,650,000 principal amount of its Pollution Control Revenue Bonds
(Millstone Point Project - 1973 Series) (of which $9,436,500 was for the
benefit of The Connecticut Light and Power Company (the "Borrower") and The
Hartford Electric Light Company, which merged with and into the Borrower in
1982); $16,000,000 principal amount of its Pollution Control Revenue Bonds
(The Connecticut Light and Power Company and The Hartford Electric Light
Company Projects - 1977 Series); $69,800,000 principal amount of its
Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and
Power Company Project - 1984 Series); $39,700,000 principal amount of its
Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and
Power Company Project - 1985 Series); and $60,700,000 principal amount of
its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light
and Power Company - 1985 Series B); and $53,500,000 principal amount of its
Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and
Power Company Project - 1985 Series C) (the "Prior Obligations") for the
purposes of providing funds for the financing of construction of and
additions to the pollution control facilities of the Borrower; and
WHEREAS, the Borrower currently owns certain individual interests
in existing facilities within certain municipalities in the State and, by
resolution adopted in furtherance of the purposes of the Act, the Authority
has accepted the application of the Borrower for assistance in the
financing of facilities for the control, abatement or prevention of
environmental pollution deriving from the operation of certain nuclear and
fossil fuel electric generating facilities (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted September
8, 1993, authorized the issuance of $245,500,000 principal amount of its
Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power
Company Project - 1993A Series) for the purposes of providing funds for the
refunding of the Prior Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter
defined) are to be secured by an Indenture of Trust of even date herewith,
by and between the Authority and Shawmut Bank Connecticut, National
Association, as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower
concurrently with the execution hereof has arranged the delivery to the
Paying Agent of an irrevocable Letter of Credit, dated the date of delivery
of the Bonds, issued by Deutsche Bank AG, New York Branch, for the account
of the Borrower in favor of the Paying Agent as beneficiary on behalf of
the owners of the Bonds; and
WHEREAS, the Borrower and Deutsche Bank AG, New York Branch, entered
into a Letter of Credit and Reimbursement Agreement dated as of September
1, 1993 obligating the Borrower inter alia to repay all amounts drawn under
the Letter of Credit together with interest, if any, thereon; and
WHEREAS, the Bonds shall be special obligations of the Authority,
payable solely from the revenues or other receipts, funds or monies to be
derived by the Authority under this Agreement or the Indenture and from any
amounts otherwise available under the Indenture for the payment of the
Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the
premises have certified that the portion of the Project that constitutes
pollution control Facilities, as designed, is in furtherance of the purpose
of controlling, abating or preventing such pollution at the Project; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to
make a loan to the Borrower and the Borrower proposes to borrow such
proceeds from the Authority for the purpose of refunding the Prior
Obligations issued by the Authority to finance and refinance a portion of
the cost of undertaking and completing the Project; and
WHEREAS, the Borrower acknowledges that the Authority is providing
financing for the Project in furtherance of the Authority's corporate
purposes under the Act, that the accomplishment of these purposes is
dependent upon the compliance of the Borrower with its covenants contained
in this Agreement, that the Authority has a resulting beneficial interest
in the Project, and that the Borrower's use of and interest in the Project
as provided hereby are in furtherance of the discharge of a public purpose;
and
WHEREAS, the Connecticut Department of Public Utility Control has
approved the issuance of the Note;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, covenants and agreements herein set forth, the Authority
and the Borrower, each binding itself, its successors and assigns, do
mutually promise, covenant and agree as follows (provided that in the
performance of the agreements of the Authority herein contained, any
obligation it may incur for the payment of money shall not be an
obligation, debt or liability of the State or any municipality thereof and
neither the State nor any municipality thereof shall be liable on any
obligation so incurred, but any such obligation shall be payable solely out
of the revenues or other receipts, funds or monies to be derived by the
Authority under this Agreement or the Indenture and from any amounts
otherwise available under the Indenture for the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the
following words and terms shall have the respective meanings set forth as
follows, and any capitalized word or term used but not defined herein is
used as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended.
"Agreement" means this Loan Agreement and any amendments and
supplements hereto.
"Authority" means the Connecticut Development Authority, a body
corporate and politic constituting a public instrumentality and political
subdivision of the State of Connecticut duly organized and existing under
the laws of the State, and any body, board, authority, agency or other
political subdivision or instrumentality of the State which shall hereafter
succeed to the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the
Chairman or Vice Chairman, the President, the Executive Vice President or
any Senior Vice President or any Vice President thereof and, in the case of
the Borrower, the Chairman, Vice Chairman, President, any Vice President,
Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary thereof and, when used with reference to the
performance of any act, the discharge of any duty or the execution of any
certificate or other document, any officer, employee or other person
authorized to perform such act, discharge such duty or execute such
certificate or other document.
"Bank" means Deutsche Bank AG, New York Branch, in its capacity as
issuer of the Letter of Credit and any other issuer of a Credit Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F)
of the Indenture. If any person claims to the Trustee to be a Beneficial
Owner, for purposes of Section 2.4(C) of the Indenture, such person shall
prove such claim to the satisfaction of the Trustee with such documentation
and signature guaranties as the Trustee may request.
"Bonds" means the $245,500,000 Pollution Control Revenue Refunding
Bonds (The Connecticut Light and Power Company Project - 1993A Series)
authorized and issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman & Ransom or such other nationally
recognized bond counsel selected by the Authority and reasonably
satisfactory to the Borrower and the Trustee.
"Borrower" means (i) The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut, and its successors and assigns and (ii) any surviving
resulting or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday,
(ii) that is a day on which banks located in Hartford, Connecticut and New
York, New York are not required or authorized to remain closed, (iii) that
is a day on which banking institutions in all of the cities in which the
principal offices of the Trustee and the Paying Agent and, if applicable,
the Remarketing Agent and the Bank are located and are not required or
authorized to remain closed and (iv) that is a day on which the New York
Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and
regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes
effective with respect to a Bond, and with respect to a Bond in the
Multiannual Mode, the date on which a new Rate Period becomes effective.
"Credit Facility" means the Letter of Credit and any substitute
irrevocable transferable letter of credit delivered to the Paying Agent
pursuant to the Indenture and this Agreement and then in effect. More than
one Credit Facility may be in effect from time to time.
"Debt Service Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the
limited-purpose trust company organized under the laws of the State of New
York which shall act as securities depository for the Bonds, and any
successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with
Section 6.3(H) of this Agreement and proceedings pursuant to such section
are continuing, (2)(a)(i) a private ruling specifically applicable to the
Bonds or (ii) the receipt by any Bondowner of a notice of assessment and
demand for payment from the Internal Revenue Service and (b)(i) the
expiration of the appeal period provided therein if no appeal is taken or
(ii) if an appeal is taken, a final unappealable decision by a court of
competent jurisdiction; provided that in the case of an event described in
clause (2) that the Authority or the Bondowner, as the case may be, has
given the Borrower and the Trustee prompt written notice of any application
for such a private ruling or, as the case may be, any proposed assertion of
taxability by the Internal Revenue Service and, if the Borrower agrees to
pay all expenses in connection therewith, permits the Borrower to contest
such action, either directly or in the name of the registered owner,
through any level of appeal determined by the Borrower, or (3) the
admission in writing by the Borrower, in the case of clause (1), (2) and
(3) to the effect that the interest on the Bonds is includable in the gross
income for federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch profits tax)
of an owner or former owner thereof, other than for a period during which
such owner or former owner is or was a "Substantial User" of the Project or
a "Related Person" as such terms are defined in the Code. For purposes of
this definition, the term owner or Bondowner means the Beneficial Owner of
the Bonds so long as the Book-Entry Only System (as defined in Section
23(F) of the Indenture) is in effect.
"Event of Default" means an Event of Default as defined in Section
7.1 hereof.
"Financing Documents" means this Agreement, the Tax Regulatory
Agreement and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by
and between the Authority and the Trustee, together with all indentures
supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is
payable on the Bonds as provided in the forms of the Bonds.
"Letter of Credit" means the $249,133,000 irrevocable letter of
credit dated the date of the initial delivery of the Bonds and issued by
Deutsche Bank AG, New York Branch, for the benefit of the Paying Agent.
"Mortgage Indentures" means (i) that certain Indenture of Mortgage
and Deed of Trust dated as of May 1, 1921, by and between the Borrower and
Bankers Trust Company, as trustee, as amended and supplemented, (ii) that
certain First Mortgage Indenture and Deed of Trust dated as of January 1,
1958, by and between The Hartford Electric Light Company (which merged with
and into the Borrower as of June 30, 1982) and Old Colony Trust Company
(which merged into First National Bank of Boston by merger effective
January 4, 1971), as trustee, as amended and supplemented, and (iii) any
other mortgage indenture which may hereafter be created so long as such
mortgage indenture covers the property pledged under the indentures named
in (i) and (ii) above or otherwise covers substantially all of the property
of the Borrower.
"Moody's" means Moody's Investors Services, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Authority, at the
direction of the Borrower, by notice to the Trustee and the
Borrower.
"Net Proceeds" when used with respect to any insurance or
condemnation award, means the gross proceeds from such award less all
expenses (including attorney's fees and expenses and any extraordinary
expenses) incurred in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as
in effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority,
dated the initial date of delivery of the Bonds in the form attached as an
Appendix to this Agreement, and any amendments or supplements made in
conformity with this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any
particular date, means all Bonds which have been authenticated and
delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or
redemption prior to maturity or surrendered to the Trustee for
cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for
the payment or redemption of which there has been separately set
aside and held in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of
the principal or applicable Redemption Price thereof, together with accrued
interest on such Bond to the payment or redemption date, which payment or
redemption date shall be specified in irrevocable instructions given to the
Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in subsection
12.1(A) of the Indenture in such principal amounts, of such maturities,
bearing such interest and otherwise having such terms and qualifications as
shall be necessary to provide monies in an amount sufficient to effect
payment of the principal or applicable Redemption Price of such Bond,
together with accrued interest on such Bond to the payment or redemption
date, which payment or redemption date shall be specified in irrevocable
instructions given to the Trustee to apply such obligations to such payment
on the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to
the Paying Agent on the Purchase Date, provided sufficient funds for
payment of the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds
shall have been authenticated and delivered under Article III of the
Indenture; and
(5) any Bond deemed to have been paid as provided in subsection
12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed
pursuant to Section 9.10 of the Indenture (and may include the Trustee),
and its successor or successors and any other corporation which may at any
time be substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the
lien of the Mortgage Indentures, (ii) liens and encumbrances permitted by
the Mortgage Indentures, (iii) liens for taxes not yet due and payable,
(iv) any lien created by this Agreement and the Indenture, (v) utility,
access and other easements and rights-of-way, that will not interfere with
or impair the value or use of the Project as herein provided, (vi) any
mechanic's, laborer's, materialman's, supplier's or vendor's lien or right
in respect thereof if payment is not yet due and payable and for which
statutory lien rights exist, and (vii) such minor defects, irregularities,
easements, and, rights-of-way (including agreements with any railroad the
purpose of which is to service the railroad siding) as normally exist with
respect to property similar in character to the Project and which do not
materially impair the value or use of the property affected thereby for the
purpose for which it was acquired hereunder.
"Plants" means, collectively, the nuclear or fossil fuel electric
generating plants at which the various portions of the Project are located,
including the Millstone 1, Millstone 2, and Millstone 3 nuclear electric
generating plants in Waterford, Connecticut, the Devon fossil fuel electric
generating plant in Milford, Connecticut, the Montville fossil fuel
electric generating plant in Uncasville, Connecticut, the Norwalk Harbor
fossil fuel electric generating plant in Norwalk, Connecticut, and the
Middletown fossil fuel electric generating plant in Middletown,
Connecticut, and as used in the singular form shall mean any one of them.
"Principal User" means any principal user of the Project within the
meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954
Code, as applicable, including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who holds the
largest ownership interest in the Project), lessee or user of more than 10%
of the Project measured either by occupiable space or fair rental value
under any formal or informal agreement or, under the particular facts and
circumstances, anyone who is a principal customer of the Project. The term
"principal customer" means any person, who purchases output of the Project
under a contract if the percentage of output taken or to be taken by such
person, multiplied by a fraction the numerator of which is the term of such
contract and the denominator of which is the economic life of the Project,
exceeds 10%. In the case of a person who purchases output of an electric
or thermal energy, gas, water or other similar facility, such person is a
principal customer if the total output purchased by such person during any
one-year period beginning with the date the facility is placed in service
is more than 10 percent of the facility's output during each such period.
Co-owners or co-lessees who are shareholders in a corporation or who are
collectively treated as a partnership subject to subchapter K under section
761(a) of the Code are not treated as Principal Users merely by reason of
their ownership of corporate or partnership interests.
"Prior Obligations" means the Authority's $11,650,000 principal
amount of Pollution Control Revenue Bonds (Millstone Point Project - 1973
Series) (of which $9,436,500 was for the benefit of The Connecticut Light
and Power Company (the "Borrower") and The Hartford Electric Light Company,
which merged with and into the Borrower in 1982); $16,000,000 principal
amount of Pollution Control Revenue Bonds (The Connecticut Light and Power
Company and The Hartford Electric Company Projects - 1977 Series);
$69,800,000 principal amount of Pollution Control Revenue Par Value Demand
Bonds (The Connecticut Light and Power Company Project - 1984 Series);
$39,700,000 principal amount of Pollution Control Revenue Par Value Demand
Bonds (The Connecticut Light and Power Company Project - 1985 Series); and
$60,700,000 principal amount of its Pollution Control Revenue Par Value
Demand Bond (The Connecticut Light and Power Company - 1985 Series B); and
$53,500,000 principal amount Pollution Control Revenue Par Value Demand
Bonds (The Connecticut Light and Power Company Project - 1985 Series C).
"Project" means the Borrower's interest in the realty and other
interests in the real property, and in all personal property, goods,
leasehold improvements, machinery, equipment, furnishings, furniture,
fixtures, tools and attachments wherever located and whether now owned or
hereafter acquired, acquired or financed in whole or in part with the
proceeds of the Prior Obligations or the proceeds of tax-exempt securities
refunded by the Prior Obligations, and any additions and accessions
thereto, substitutions therefor and replacements, improvements, extensions
and restorations thereof, described in Appendix B to this Agreement, as
amended from time to time in accordance with this Agreement.
"Redemption Price" means, when used with respect to a Bond or a
portion thereof, the principal amount of such Bond or portion thereof plus
the applicable premium, if any, payable upon redemption thereof pursuant to
the Indenture.
"Refunding Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and
Reimbursement Agreement dated as of September 1, 1993 among the Borrower,
Deutsche Bank AG, New York Branch, as agent and issuing bank thereunder,
and the participating banks referred to therein, and any other agreement
between the Borrower and a Bank under which the Borrower is obligated to
reimburse the Bank for payments made by the Bank under a Credit Facility.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut
Nuclear Unit dated as of September 1, 1973, among the Borrower and the
other participants from time to time in ownership of the Millstone 3
nuclear electric generating plant in Waterford, Connecticut, pertaining to
the ownership, construction and operation of Millstone 3, as such agreement
has been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized
and existing under the laws of the State of New York, its successors and
their assigns and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "S&P"
shall be deemed to refer to any other nationally recognized securities
rating agency designated by the Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within
the meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954
Code, as applicable.
"Supplemental Indenture" means any indenture supplemental to the
Indenture or amendatory of the Indenture, adopted by the Authority in
accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds
becomes or became includable in the gross income of the recipient thereof
(other than the Borrower or another Substantial User or Related Person) for
federal income tax purposes for any cause, as determined by a Determination
of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated
as of the date of initial issuance and delivery of the Bonds, among the
Authority, the Borrower and the Trustee, and any amendments and supplements
thereto.
"Term", when used with reference to this Agreement, means the term of
this Agreement determined as provided in Article III hereof.
"Trustee" means Shawmut Bank Connecticut, National Association, and its
successor or successors hereafter appointed in the manner provided in the
Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein",
"hereunder" and any similar terms, as used in this Agreement, refer to this
Agreement, and the term "hereafter" means after, and the term "heretofore"
means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the
singular number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations,
partnerships (including limited partnerships), trusts, corporations
and other legal entities, including public bodies, as well as natural
persons.
(4) Any headings preceding the texts of the several Articles
and Sections of this Agreement, and any table of contents appended
to copies hereof, shall be solely for convenience of reference and
shall not constitute a part of this Agreement, nor shall they affect
its meaning, construction or effect.
(5) Nothing contained in this Agreement shall be construed to
cause the Borrower to become the agent for the Authority or the Trustee for
any purpose whatsoever, nor shall the Authority or the Trustee be
responsible for any shortage, discrepancy, damage, loss or destruction of
any part of the Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be
given or made by any person or party hereunder shall be at the sole
discretion of the party whose approval, consent or acceptance is
required.
(7) All notices to be given hereunder shall be given in
writing within a reasonable time unless otherwise specifically
provided.
(8) This Agreement shall be governed by and construed in
accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid
by any court of competent jurisdiction, the invalidity of such
provision shall not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Credit
Facility in effect, upon receipt by the Trustee of a certificate from the
Bank stating that all amounts payable to the Bank under the Reimbursement
Agreement have been paid in full, all references to the Bank, the
Reimbursement Agreement or the Credit Facility in this Agreement, the Note,
the Indenture, and the Bonds shall be ineffective.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority
represents and warrants that:
(1) It is a body corporate and politic constituting a public
instrumentality and political subdivision of the State, duly organized and
existing under the laws of the State including the Act. The Authority is
authorized to issue the Bonds in accordance with the Act and to use the
proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of the Act
and has full power and authority pursuant to the Act to consummate all
transactions contemplated by the Bonds, the Indenture and the Financing
Documents.
(3) By resolution duly adopted by the Authority and still in
full force and effect, the Authority has authorized the execution, delivery
and due performance of the Bonds, the Indenture and the Financing
Documents, and the taking of any and all action as may be required on the
part of the Authority to carry out, give effect to and consummate the
transactions contemplated by this Agreement and the Indenture, and all
approvals necessary in connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed,
authenticated, issued and delivered, constitute valid and binding special
obligations of the Authority payable solely from revenues or other
receipts, funds or monies pledged therefor under the Indenture and from any
amounts otherwise available under the Indenture, and are entitled to the
benefit of the Indenture. Neither the State nor any municipality thereof
is obligated to pay the Bonds or the interest thereon. Neither the faith
and credit nor the taxing power of the State nor any municipality thereof
is pledged for the payment of the principal, and premium, if any, of and
interest on the Bonds.
(5) The execution and delivery of the Bonds, the Indenture
and the Financing Documents and compliance with the provisions thereof,
will not conflict with or constitute on the part of the Authority a
violation of, breach of or default under its by-laws or any statute,
indenture, mortgage, deed of trust, note agreement or other agreement or
instrument to which the Authority is a party or by which the Authority is
bound, or, to the knowledge of the Authority, any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Authority or any of its activities or properties, and all consents,
approvals, authorizations and orders of governmental or regulatory
authorities which are required for the consummation by the Authority of the
transactions contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the
Indenture, the Authority will apply the proceeds of the Bonds to the
purposes specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at
law or in equity before or by any court, public board or body pending or
threatened against or affecting the Authority, or to the best knowledge of
the Authority, any basis therefor, wherein an unfavorable decision, ruling
or finding would adversely affect the transactions contemplated hereby or
by the Indenture, or which, in any way, would adversely affect the validity
of the Bonds, or the validity of or enforceability of the Indenture or the
Financing Documents, or any agreement or instrument to which the Authority
is a party and which is used or contemplated for use in consummation of the
transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action which
will result in a valid claim for any finders or similar fees or commitments
in respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax
Regulatory Agreement are by this reference incorporated in this
Agreement as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the
Sharing Agreement, the Borrower is the owner of a 52.933% undivided
interest in the Millstone 3 nuclear electric generating plant in Waterford,
Connecticut, at which a portion of the Project is located. The Sharing
Agreement designates the Borrower as one of two lead participants and,
together with such other lead participant, the Borrower has sole
responsibility for operation and maintenance of Millstone 3, subject to the
provisions of the Sharing Agreement. Every obligation of the Borrower
hereunder with respect to that portion of the Project located at Millstone
3 (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations
set forth in this Section, to exercise all rights granted to it pursuant to
the Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower
represents and warrants that:
(1) The Borrower has been duly incorporated and validly exists
as a corporation in good standing under the laws of the State of
Connecticut, is not in violation of any provision of its certificate of
incorporation or its by-laws, has corporate power to enter into and perform
the Financing Documents, and by proper corporate action has duly authorized
the execution and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally
binding obligations of the Borrower, enforceable in accordance with
their respective terms, except to the extent that such enforceability may
be limited by bankruptcy or insolvency or other laws affecting creditors'
rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing
Documents, the consummation of the transactions contemplated thereby, nor
the fulfillment by the Borrower of or compliance by the Borrower with the
terms and conditions thereof is prevented or limited by or conflicts with
or results in a breach of, or default under the terms, conditions or
provisions of any contractual or other restriction of the Borrower,
evidence of its indebtedness or agreement or instrument of whatever nature
to which the Borrower is now a party or by which it is bound, or
constitutes a default under any of the foregoing. No event has occurred
and no condition exists which, upon the execution and delivery of any
Financing Documents, constitutes an Event of Default hereunder or an event
of default thereunder or, but for the lapse of time or the giving of
notice, would constitute an Event of Default hereunder or an event of
default thereunder.
(4) There is no action or proceeding pending or, to the
knowledge of the Borrower, threatened against the Borrower before any
court, administrative agency or arbitration board that will materially and
adversely affect the ability of the Borrower to perform its obligations
under the Financing Documents except as disclosed in the Borrower's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992, the
Borrower's Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1993 and June 30, 1993, and the Borrower's Current Reports on
Form 8-K dated June 3, 1993, June 30, 1993 and September 10, 1993; and all
authorizations, consents and approvals of governmental bodies or agencies
required in connection with the execution and delivery of the Financing
Documents and in connection with the performance of the Borrower's
obligations hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing
Documents and any other instrument delivered by the Borrower pursuant to
the terms hereof or thereof are within the corporate powers of the Borrower
and have been duly authorized and approved by the board of directors of the
Borrower and are not in contravention of law or of the Borrower's
certificate of incorporation or by-laws, as amended to date, or of any
undertaking or agreement to which the Borrower is a party or by which it is
bound.
(6) The Borrower represents that it has not made any
commitment or taken any action which will result in a valid claim for any
finders' or similar fees or commitments in respect of the transactions
described in this Agreement other than the fees to various parties to the
transactions contemplated hereby which have been heretofore paid or
provided.
(7) The Project is included within the definition of a
"project" in the Act, and its estimated cost is equal to or in excess of
$245,500,000. The Borrower intends the Project to be and continue to be an
authorized project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory
Agreement are eligible costs of a project financed by bonds issued by the
Authority under the Act, and may be financed by amounts in the Refunding
Fund under the Indenture. None of the proceeds of the Bonds will be used
directly or indirectly as working capital or to finance inventory.
(9) The Project is in compliance with all applicable federal,
State and local laws and ordinances (including rules and regulations)
relating to zoning, building, safety and environmental quality the
non-compliance with which would materially adversely affect the performance
by the Borrower of any of its obligations hereunder.
(10) The Borrower has obtained all necessary material approvals
from any and all governmental agencies requisite to the Project, and has
also obtained all material occupancy permits and authorizations from
appropriate authorities authorizing the occupancy and use of the Project
for the purposes contemplated hereby. The Borrower further represents and
warrants that it has completed the Project in accordance with all material
federal, State and local laws, ordinances and regulations applicable
thereto.
(11) The availability of financial assistance from the Authority
as provided herein and in the Indenture has induced the Borrower to locate
the Project in the State. The Borrower does not presently intend to lease
the project.
(12) The Borrower will not take or omit to take any action which
action or omission will in any way cause the proceeds of the Bonds to be
applied in a manner contrary to that provided in the Indenture and the
Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and
knows of no action that any other person, firm or corporation has taken or
intends to take, which would cause interest on the Bonds to be includable
in the gross income of the recipients thereof for federal income tax
purposes. The representations, certifications and statements of reasonable
expectation made by the Borrower in the Tax Regulatory Agreement and
relating to Project description, composite issues, bond maturity and
average asset economic life, use of Bond proceeds, arbitrage and related
matters are hereby incorporated by this reference as though fully set forth
herein.
(14) The Borrower has good and marketable or good and
merchantable title to the Project subject only to Permitted Encumbrances
and to irregularities or defects in title which may exist which do not
materially impair the use of such properties in the Borrower's business.
(15) The Borrower will use all of the proceeds of the Bonds to
refund the Prior Obligations.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in
accordance with the terms of this Agreement, the Authority agrees to make a
loan to the Borrower from the proceeds of the Bonds in the amount of
$245,500,000 and the Borrower agrees to borrow such amount from the
Authority.
(B) The loan shall be made at the time of delivery of the Bonds
and receipt of payment therefor by the Authority against receipt by the
Authority of the Note duly executed and delivered to evidence the pecuniary
indebtedness of the Borrower hereunder. As and for the loan the Authority
shall apply the proceeds of the Bonds as provided in the Indenture on the
terms and conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than
12:00 Noon on the date on which such payment of principal (including
principal called for redemption) of, premium, if any, or interest on Bonds
shall become due in an amount equal to the payment then coming due on such
Bonds less the amounts, if any, (i) then held in the Debt Service Fund and
available to pay the same, and (ii) amounts received by the Paying Agent to
pay the same from a draw under a Credit Facility. The Borrower may make
payments to the Debt Service Fund earlier than required by this section,
but such payments shall not affect the accrual of interest. In addition,
the Borrower shall pay to the Trustee, as and when the same shall become
due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be
appropriately adjusted to reflect the date of issue of Bonds, accrued
interest deposited in the Debt Service Fund, if any, and any purchase or
redemption of Bonds so that there will be available on each payment date
the amount necessary to pay the interest and principal due or coming due on
the Bonds and so that accrued interest will be applied to the installments
of interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the
Borrower shall also have a continuing obligation to pay to the Trustee for
deposit in the Debt Service Fund an amount equal to interest on the overdue
principal but the installment payments required under this section shall
not otherwise bear interest. Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section 3.1
are subject in all respects to the provisions of Sections 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Credit Facility.
(G) In the event the Borrower should fail to make any of the
payments required under the foregoing provisions of this Section 3.1, the
item or installment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid, and the
Borrower agrees to pay or cause to be paid the same with interest thereon
at the rate determined in accordance with Article II of the Indenture until
paid in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further
expressly agrees to pay to the Trustee as and when the same shall become
due, (i) an amount equal to the initial and annual fees of the Trustee for
the ordinary services of the Trustee rendered and its ordinary expenses
incurred under the Indenture, including fees and expenses as Paying Agent
and the fees and expenses of Trustee's counsel, including fees and expenses
as registrar and in connection with preparation and delivery of new Bonds
upon exchanges or transfers, (ii) the reasonable fees and expenses of the
Trustee and any Paying Agents on the Bonds for acting as paying agents as
provided in the Indenture, including fees and expenses of the Paying Agent
as registrar and in connection with the preparation of new Bonds upon
exchanges, transfers or redemptions, (iii) the reasonable fees and expenses
of the Bank and the Remarketing Agent for the performance of their duties
as provided in the Indenture, including the reasonable fees of their
counsel and other expenses the Remarketing Agent may incur in providing for
accurate offering documents in connection therewith, (iv) the reasonable
fees and charges of the Trustee for extraordinary services rendered by it
and extraordinary expenses incurred by it under the Indenture, including
reasonable counsel fees and expenses, and (v) fees and expenses of Bond
Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by it
under the Financing Documents at the time and in the manner therein
provided.
Section 3.3. Manner of Payment. The payments provided for in
Section 3.1 hereof shall be made by any reasonable method providing
immediately available funds at the time and place of payment directly to
the Trustee for the account of the Authority and shall be deposited in the
Debt Service Fund. The additional payments provided for in Section 3.2
shall be made in the same manner directly to the entitled party or to the
Trustee for its own use or disbursement to the Paying Agents, as the case
may be.
Section 3.4. Obligation Unconditional. The obligations of the
Borrower under the Financing Documents shall be absolute and unconditional,
irrespective of any defense or any rights of setoff, recoupment or
counterclaim it might otherwise have against the Authority or the Trustee.
The Borrower will not suspend or discontinue any such payment or terminate
this Agreement (other than in the manner provided for hereunder) for any
cause, including, without limiting the generality of the foregoing, any
acts or circumstances that may constitute failure of consideration, failure
of title, or commercial frustration of purpose, or any damage to or
destruction of the Project, or the taking by eminent domain of title to or
the right of temporary use of all or any part of the Project, or any change
in the tax or other laws of the United States, the State or any political
subdivision of either thereof, or any failure of the Authority or the
Trustee to perform and observe any agreement or covenant, whether expressed
or implied, or any duty, liability or obligation arising out of or
connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the
Borrower and the Borrower acknowledges that, among other things, the
Borrower's loan payments and all of the Authority's right, title and
interest under the Financing Documents to which it is a party (except its
rights under Section 6.2 hereof) are being concurrently with the execution
and delivery hereof endorsed, pledged and assigned without recourse by the
Authority to the Trustee as security for the Bonds as provided in the
Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently
with the execution and delivery hereof sold and delivered the Bonds under
and pursuant to a resolution adopted by the Authority on September 8, 1993,
authorizing their issuance under and pursuant to the Indenture. The
proceeds of sale of the Bonds shall be applied as provided in Articles IV
and V of the Indenture.
Section 3.7. Use of Priority Amounts. The Borrower and the
Authority acknowledge their intention to minimize the risk that any payment
made to a Bondowner from amounts provided by or on behalf of the Borrower
may be determined by a bankruptcy court to constitute a preference. To
this end the parties agree that payments to Bondowners on Bonds supported
by a Credit Facility shall be made only from Priority Amounts, except when
and to the extent no Priority Amounts are available for the purpose as
provided in Section 5.8(e) of the Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The payment
of obligations of the Borrower under this Agreement and the Note with
respect to the Bonds shall be completely satisfied to the extent of all
drawings made under the Credit Facility for the purpose of satisfying such
obligations.
Section 3.9. Effective Date and Term. (A) This Agreement shall
become effective upon its execution and delivery by the parties hereto,
shall remain in full force from such date and, subject to the provisions
hereof (including particularly Articles VII and VIII), shall expire on such
date as the Indenture shall be discharged and satisfied in accordance with
the provisions of subsection 12.1(A) thereof. The Borrower's obligations
under Sections 6.2 and 6.3 hereof, however, shall survive the expiration of
this Agreement.
(B) Within 60 days of such expiration the Authority shall
deliver to the Borrower any documents and take or cause the Trustee, at the
Borrower's expense, to take any such reasonable actions as may be necessary
to effect the cancellation, release and satisfaction of the Indenture and
the Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section
5.8(F) of the Indenture, if the amount drawn on the Credit Facility and
deposited with the Paying Agent, together with all other amounts (including
remarketing proceeds) received by the Paying Agent for the purchase of
Bonds supported by a Credit Facility and tendered pursuant to Section
2.3(G)(1)(c) or 2.3(G)(2)(c) or (d) of the Indenture, is not sufficient to
pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent
shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the
Remarketing Agent and the Trustee of such deficiency by telephone promptly
confirmed in writing. The Borrower shall pay to the Paying Agent in
immediately available funds by 4:00 P.M. on the Purchase Date an amount
equal to the Purchase Price of such Bonds less the amount, if any,
available to pay the Purchase Price in accordance with Section 9.18 of the
Indenture from the proceeds of the remarketing of such Bonds or from
drawings on the Credit Facility, as reported by the Paying Agent. Bonds so
purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged,
concurrently with the original issuance and authentication of the Bonds,
for the delivery to the Paying Agent of the Letter of Credit having a term
expiring three years from the date of issuance, and providing for the
Paying Agent to be entitled to draw on or prior to the Termination Date (as
defined therein), an amount that is not less than the sum of the aggregate
principal amount (or that portion of the purchase price corresponding to
principal) of the Outstanding Bonds and the aggregate amount of interest
accrued on such Bonds (or that portion of the purchase price corresponding
to interest).
Section 3.12. Requirements for Delivery of a Substitute Credit
Facility. (A) The Borrower may, upon satisfaction of the requirements set
forth in this Section, at its option (except during the period between the
giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than
forty-five (45) days' written notice to the Authority, the Trustee, the
Paying Agent and the Remarketing Agent, and further the Paying Agent has
received the proceeds of all outstanding drawings on the Credit Facility
being replaced, (2) if any Bonds supported by the Credit Facility being
replaced are in the Weekly Mode, the Paying Agent has given not less than
(30) days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Weekly Mode and (3) if any of the
Bonds supported by the Credit Facility being replaced are in the Flexible
Mode, such Credit Facility shall in no event be terminated or released
earlier than on the second Business Day after an Effective Date for all
such Bonds or such earlier day on or after such Effective Date on which the
full Purchase Price for such Bonds is received by the Paying Agent. Any
notice given pursuant to clause (1) or (2) above shall specify the
expiration date of the Credit Facility and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit Facility
will terminate on the date stated in such notice.
(B) Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a
financial institution;
(ii) be on terms no less favorable to the Paying Agent
than the Letter of Credit and entitle the Paying Agent to draw upon or
demand payment and receive in immediately available funds an amount equal
to the sum of the principal amount of the Bonds supported by the Credit
Facility, any premium applicable thereto, and (A) forty-five (45) days'
accrued interest at the Maximum Interest Rate on the principal amount of
Bonds then Outstanding in the Weekly Mode, or (B) thirty-eight (38) days'
accrued interest at the Maximum Interest Rate on the principal amount of
Bonds then Outstanding in the Flexible Mode; and (iii) provide for a term
which may not expire in less than 360 days and which may not expire or be
terminated prior to the fifth Business Day after the mandatory tender for
purchase as provided in Section 2.3(G)(1)(c) or 2.3(G)(2)(d) of
theIndenture. The Borrower shall not enter into any Reimbursement
Agreement or agree to any amendment of a Reimbursement Agreement which in
any way limits the obligation of the Bank to provide funds under the
Credit Facility without the prior written consent of 100% of the principal
amount of the Bonds Outstanding and entitled to the benefit thereof.
(C) No substitute Credit Facility may be delivered to the Trustee for
any purpose under this Agreement or the Indenture unless accompanied by the
following documents: (i) an opinion of counsel for the issuer of the
substitute Credit Facility to the effect that it constitutes a legal, valid
and binding obligation of the issuer enforceable in accordance with its
terms; (ii) an opinion of Bond Counsel to the effect that the issuance of a
substitute Credit Facility will not adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes and
that such Credit Facility is permitted under the Indenture; (iii) an
opinion of counsel to the Borrower, satisfactory to the Trustee stating
that the delivery of such substitute Credit Facility is authorized under
this Agreement and complies with the terms hereof; (iv) a certificate of
the Bank that all amounts due under the Reimbursement Agreement have been
paid and that the Company has fulfilled all its obligations arising out of
such Agreement; (v) an executed copy of the Reimbursement Agreement entered
into with respect to the substitute Credit Facility; (vi) copies of any
other documents, agreements or arrangements entered into directly or
indirectly between the Borrower and the entity issuing the substitute
Credit Facility with respect to the transactions contemplated by the
substitute Credit Facility and related Reimbursement Agreement; and (vii)
such other documents and opinions as the Trustee or the Authority may
reasonably request. Notice of the substitution, replacement, termination
or extension of a Credit Facility shall be sent by the Paying Agent to
Moody's and S&P and shall include the new expiration date of the Credit
Facility and the name of the entity providing the substitute Credit
Facility.
The substitute Credit Facility, related Reimbursement Agreement
and other documents, agreements and arrangements entered into and delivered
with respect to the delivery of a substitute Credit Facility shall not
include any provisions less favorable to the owners of the Bonds than the
provisions of the Credit Facility and related Reimbursement Agreement,
documents, agreements and arrangements, including provisions regarding the
acceleration of the Bonds, any right of setoff of assets of the account
party by the entity issuing the substitute Credit Facility, and any direct
or indirect pledge of collateral which is not pledged on a priority or
parity basis to the owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds under
this Agreement, the Borrower shall at all times comply with applicable
federal and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if
at any time it becomes necessary or desirable to have a Paying Agent
capable of performing in New York, New York, it shall remove Shawmut Bank
Connecticut, National Association as Paying Agent and a successor shall be
appointed pursuant to Section 9.11 of the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents
and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs
and expenses in connection with the preparation of the Financing Documents
and the Indenture, the preparation and delivery of any legal instruments
and documents necessary in connection therewith and their filing and
recording, if required, and all taxes and charges payable in connection
with any of the foregoing. Such costs and all other costs of the Project
shall be paid by the Borrower or from the Refunding Fund in the manner and
to the extent provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost
of Project. Neither the Authority, nor the Trustee, nor any Bondholder
makes any warranty, either expressed or implied, as to the Project or its
condition or that it will be suitable for the Borrower's purposes or needs,
or that the insurance required hereunder will be adequate to protect the
Borrower's business or interest, or that the proceeds of the Bonds will be
sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter
be lawfully assessed or levied upon the Project or any part thereof, or
upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid
during the Term.
(B) The Borrower may, at its expense and in its own name, in
good faith contest any such taxes, assessments and other charges and
payments in lieu of taxes including assessments and, in the event of such
contest, may permit the taxes, assessments or other charges or payments in
lieu of taxes, including assessments so contested to remain unpaid,
provided prior written notice thereof has been given to the Trustee and
reserves to the extent required by the Reimbursement Agreement are
maintained, during the period of such contest and any appeal therefrom.
Nothing herein shall preclude the Borrower, at its expense and in its own
name and behalf, from applying for any tax exemption allowed by the federal
government, the State or any political or taxing subdivision thereof under
any existing or future provision of law which grants or may grant such tax
exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project
against loss or damage by fire, flood, lightning, windstorm, vandalism and
malicious mischief and other hazards, casualties, contingencies and
extended coverage risks in such amounts and in such manner as is required
by applicable federal or state law and shall pay when due the premiums
thereon.
(B) The Borrower further agrees that it will at all times carry
public liability insurance with respect to the Project to the extent
required by applicable federal or state law.
(C) As an alternative to the hazard insurance and public
liability insurance requirements of subsections (A) or (B) above the
Borrower may self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be
effected under overall blanket or excess coverage policies of the Borrower
or any affiliate and may be carried with any insurer other than an
unauthorized insurer under the Connecticut Unauthorized Insurers Act. The
Borrower shall furnish evidence satisfactory to the Authority or the
Trustee, promptly upon the request of either, that the required insurance
coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will observe and
comply with all material laws, regulations, ordinances, rules, and orders
(including without limitation those relating to zoning, land use,
environmental protection, air, water and land pollution, wetlands, health,
equal opportunity, minimum wages, worker's compensation and employment
practices) of any federal, state, municipal or other governmental authority
relating to the Project except during any period during which the Borrower
at its expense and in its name shall be in good faith contesting its
obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the
Borrower will keep and maintain or cause the Project to be kept and
maintained in accordance with sound utility operating practice and in good
condition, working order and repair, will not commit or suffer any waste
thereon, and will make all material repairs and replacements thereto which
may be required in connection therewith. Nothing in this Section 4.6 shall
(1) apply to any portion of the Project beyond its useful or economic life
or (2) apply to the use and disposition by the Borrower of any part of the
Project in the ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project
shall be damaged or either partially or totally destroyed, or if title to
or the temporary use of the whole or any part thereof shall be taken or
condemned by a competent authority for any public use or purpose, there
shall be no abatement or reduction in the amounts payable by the Borrower
hereunder and the Borrower shall continue to be obligated to make such
payments. In any such case the Borrower shall promptly give written notice
thereof to the Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or
Destruction. In the event of any such condemnation, damage or destruction
the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage
Indentures and the Sharing Agreement concerning the repair,
reconstruction or restoration of the Project or give notice to the
Authority of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its
option to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or
Condemnation. The Net Proceeds from any insurance or condemnation award
with respect to the Project shall be applied as provided in the Mortgage
Indentures, or, in the event that the Mortgage Indentures have been
discharged or are no longer in effect, shall be applied at the direction of
the Borrower with the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence;
Conditions under which Exceptions Permitted. (A) The Borrower covenants and
agrees that, during the Term of this Agreement it will maintain its
corporate existence, will continue to be a corporation either organized
under the laws of or duly qualified to do business as a foreign corporation
in the State and in all jurisdictions necessary in the operation of its
business, will not dissolve or otherwise dispose of all or substantially
all of its assets and will not consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it.
(B) The Borrower may, however, without violating the agreements
contained in this Section, consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it, or sell or otherwise transfer to another corporation all or
substantially all of its assets as an entity and thereafter liquidate or
dissolve, if (a) the Borrower is the surviving, resulting or transferee
corporation, as the case may be, or (b) in the event the Borrower is not
the surviving, resulting or transferee corporation, as the case may be,
such corporation (i) is a solvent corporation either organized under the
laws of or duly qualified to do business as a foreign corporation subject
to service of process in the State and (ii) assumes in writing all of the
obligations of the Borrower herein, and under the Note.
Section 6.2. Indemnification, Payment of Expenses, and Advances.
(A) The Borrower agrees to protect, defend and hold harmless the Trustee,
the Paying Agent, the Authority, the State, agencies of the State and the
members, servants, agents, officers, employees and directors of the
Trustee, the Paying Agent, the Authority or the State (the "Indemnified
Parties"), from any claim, demand, suit, action or other proceeding and any
liabilities, costs, and expenses whatsoever by any person or entity
whatsoever, arising or purportedly arising from or in connection with the
Financing Documents, the Indenture, the Bonds, or the transactions
contemplated thereby or actions taken thereunder by any person (including
without limitation the filing of any information, form or statement with
the Internal Revenue Service), except for any wilful and material
misrepresentation, wilful misconduct or gross negligence on the part of the
Indemnified Parties and except for any bad faith on the part of any
Indemnified Party other than the Authority.
The Borrower agrees to indemnify and hold harmless any Indemnified
Party against any and all claims, demands, suits, actions or other
proceedings and all liabilities, costs and expenses whatsoever caused by
any untrue statement or misleading statement or alleged untrue statement or
alleged misleading statement of a material fact contained in the written
information provided by the Borrower in connection with the issuance of the
Bonds or incorporated by reference therein or caused by any omission or
alleged omission from such information of any material fact required to be
stated therein or necessary in order to make the statements made therein in
the light of the circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any
damage or injury to the persons or property of the Borrower or its members,
directors, officers, agents, servants or employees, or any other person who
may be about the Project due to any act or omission of any person other
than the Authority or the Trustee or their respective members, directors,
officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees
that no Indemnified Party shall be liable for, and agrees to hold each
Indemnified Party harmless against, any attorney fees and expenses,
expenses or damages incurred because of any investigation, review or
lawsuit commenced by the Trustee or the Authority in good faith with
respect to the Financing Documents, the Indenture, the Bonds and the
Project Realty and the Project Equipment, and the Authority or the Trustee
shall promptly give written notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee contained herein shall be
deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee and not of any member,
director, officer or employee of the Authority or the Trustee in its
individual capacity, and no recourse shall be had for the payment of the
Bonds or for any claim based thereon or hereunder against any member,
director, officer or employee of the Authority or the Trustee or any
natural person executing the Bonds.
(E) In case any action shall be brought against one or more of
the Indemnified Parties based upon any of the above and in respect of which
indemnity may be sought against the Borrower, such Indemnified Party shall
promptly notify the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any such action shall
not relieve it of any liability which it may have to any Indemnified Party
otherwise than under this Section 6.2. In case any such action shall be
brought against any Indemnified Party and it shall notify the Borrower of
the commencement thereof, the Borrower shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof with
counsel satisfactory to such Indemnified Party, and after notice from the
Borrower to such Indemnified Party of the Borrower's election so to assume
the defense thereof, the Borrower shall not be liable to such Indemnified
Party for any subsequent legal or other expenses attributable to such
defense, except as set forth below, other than reasonable costs of
investigation subsequently incurred by such Indemnified Party in connection
with the defense thereof. The Indemnified Party shall have the right to
employ its own counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i)
the employment of counsel by such Indemnified Party has been authorized by
the Borrower; (ii) the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Borrower and the
Indemnified Party in the conduct of the defense of such action (in which
case the Borrower shall not have the right to direct the defense of such
action on behalf of the Indemnified Party); or (iii) the Borrower shall not
in fact have employed counsel reasonably satisfactory to the Indemnified
Party to assume defense of such action; provided, however, that Borrower
shall not be responsible for the fees and expenses of more than one such
law firm unless an Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between such Indemnified Party and any
other Indemnified Party requiring the use of separate counsel, or Borrower
has not employed counsel which is satisfactory to each Indemnified Party.
The Borrower shall not be liable for any settlement of any action or claim
effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary
out-of-pocket expenses of the Authority in connection with the issuance of
the Bonds, the administration of the Financing Documents and the
enforcement of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or
perform any act under the Financing Documents, the Trustee or the Authority
may pay the amount or perform the act, in which event the costs,
disbursements, expenses and reasonable counsel fees and expenses thereof,
together with interest thereon from the date the expense is paid or
incurred at the prime interest rate generally prevailing among banks in the
State on the date of the advance plus 1% shall be an additional obligation
hereunder payable upon demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority
against the Borrower irrespective of any action taken by or on behalf of
the owners of the Bonds.
(I) The obligations of the Borrower under this section,
notwithstanding any other provisions contained in the Financing Documents,
shall survive the termination of this Agreement and shall be recourse to
the Borrower, and for the enforcement thereof any Indemnified Party shall
have recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments
Upon Taxability. (A) For purpose of this Section, the term owner means the
Beneficial Owner of the Bonds so long as the Book-Entry System is in
effect.
(B) The representations, warranties, covenants and statements
of expectation of the Borrower set forth in the Tax Regulatory Agreement
are by this reference incorporated in this Agreement as though fully set
forth herein.
(C) If any owner of the Bonds receives from the Internal
Revenue Service a notice of assessment and demand for payment with respect
to interest on any Bond (except a notice and demand based upon the
assertion that the owner of the Bonds is a Substantial User or Related
Person), an appeal may be taken by the owner of the Bonds at the option of
the Borrower. Without limiting the generality of the foregoing, the
Borrower shall have the right to direct the Trustee to direct the owner of
the Bonds to take such appeal or not to take such appeal. In either case
all expenses of the appeal including reasonable counsel fees and expenses
shall be paid by the Borrower, and the owner of the Bonds and the Borrower
shall cooperate and consult with each other in all matters pertaining to
any such appeal, except that no owner of the Bonds shall be required to
disclose or furnish any non-publicly disclosed information, including,
without limitation, financial information and tax returns.
(D) Not later than 90 days following a Determination of
Taxability, the Borrower shall pay to the Trustee an amount sufficient,
when added to the amount then in the Debt Service Fund and available for
such purpose, to retire and redeem all Bonds then Outstanding, in
accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments
provided for in this Section shall be absolute and unconditional, and the
failure of the Authority or the Trustee to execute or deliver or cause to
be executed or delivered any documents or to take any action required under
this Agreement or otherwise shall not relieve the Borrower of its
obligation under this Section. Notwithstanding any other provision of this
Agreement or the Indenture, the Borrower's obligations under this Section
shall survive the termination of this Agreement and the Indenture.
(F) The Borrower's payment obligations under this Section are
further subject in all respects to the provisions of Section 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Letter of Credit.
(G) The occurrence of a Determination of Taxability shall not
be an Event of Default hereunder but shall require only the performance of
the obligations of the Borrower stated in this Section, the breach of which
shall constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority
shall, upon (1) the release of a published Revenue Ruling by the Internal
Revenue Service and the receipt by the Authority of an opinion of Bond
Counsel to the effect that such ruling may adversely affect the exclusion
of interest on the Bonds from gross income for federal income tax purposes,
and (2) receipt from the Borrower, within 30 days after the Authority has
mailed copies of such ruling and such opinion to the Borrower, of a written
request to proceed in accordance with this Section, proceed to apply for
and use its best efforts to obtain a ruling from the Internal Revenue
Service, pursuant to Revenue Procedure 88-33 or any other procedures
subsequently established by the Internal Revenue Service, as to the
qualification or continued qualification of interest on the Bonds for
exclusion from gross income for federal income tax purposes. The Authority
and the Borrower shall cooperate and consult with each other in all matters
pertaining to such ruling request. All expenses of the Authority in
connection with such application including reasonable counsel fees shall be
paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees
that it shall promptly notify the Authority and the Trustee upon the
occurrence of any of the following events, in each case, whether as a
result of a determination by the Borrower, the Connecticut Department of
Public Utility Control or the United States Nuclear Regulatory Commission
or its successors,
(1) Abandonment of a substantial portion of the Project
at any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's
ownership interest in the Project other than (i) to a company which is part
of Northeast Utilities, (ii) in connection with a merger, consolidation, or
sale of assets permitted by Section 6.1(B) hereof, (iii) in connection with
any form of financing (including without limitation the grant of a mortgage
or security interest or sale in connectin with a sale and lease back) by
the Borrower, (iv) in any case in which the remaining aggregate ownership
interest of Northeast Utilities is greater than 50 percent, (v) of any
portion of the Project beyond its useful or economic life, or (vi) in the
ordinary course of the Borrower's business. For purposes of this
paragraph, "Northeast Utilities" means Northeast Utilities, its
subsidiaries (whether direct or indirect) and their successors and assigns;
or (3) Any determination, following damage or destruction of all or
substantially all of the Project, not to repair, reconstruct, relocate or
replace the Project.
(B) In the event that the Authority receives notice from
the Borrower of the occurrence of any event described in subsection (A) of
this Section 6.4, the Borrower agrees that the Authority may, not later
than one year after the receipt of such notice from the Borrower, declare
that payment of all amounts due under the Financing Documents shall be
accelerated by notice to the Borrower and the Trustee stating that such
amounts are due and payable by the Borrower in full on a date selected by
the Borrower and set forth in a notice to the Trustee and the Authority,
which date shall be not later than three years from the date of mailing of
the Authority's acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the
provisions of this Section shall be subject to the provisions of Section
7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The
Authority and the Borrower agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect
description of the Project Realty or Project Equipment or for carrying out
the intention of or facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture.
The Borrower covenants and agrees that it will comply with the provisions
of the Indenture with respect to the Borrower and that the Trustee and the
Bondholders shall have the power and authority provided in the Indenture.
The Borrower further agrees to aid in the furnishing to the Authority or
the Trustee of opinions that may be required under the Indenture. The
Borrower covenants and agrees that the Trustee shall be entitled to and
shall have all the rights, including the right to enforce against the
Borrower the provisions of the Financing Documents, pertaining to the
Trustee notwithstanding the fact that the Trustee is not a party to the
Financing Documents.
Section 6.7. Assignment of Agreement or Note. (A) The Borrower may
not assign its rights, interests or obligations hereunder or under the Note
except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer
any of the Financing Documents or the revenues and other receipts, funds
and monies to be received thereunder during the Term except to the Trustee
as provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly
authorized agents shall have (1) the right at all reasonable times to enter
upon and to examine and inspect the Project and (2) such rights of access
thereto as may be reasonably necessary for the proper maintenance and
repair thereof in the event of failure by the Borrower to perform its
obligations under this Agreement, subject, in each case, to all applicable
laws, rules, regulations, orders and guidelines. The Authority and the
Trustee shall also be permitted, at all reasonable times, to examine the
books and records of the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after
becoming aware of any condition or event which constitutes, or with the
giving of notice or the passage of time would constitute, an Event of
Default or an "Event of Default" under Section 8.1 of the Indenture, the
Borrower shall deliver to the Authority, the Bank, if any, the Remarketing
Agent, the Paying Agent and the Trustee a notice stating the existence and
nature thereof and specifying the corrective steps, if any, the Borrower
is taking with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in
the performance of this Agreement will not discriminate or permit
discrimination against any person or group of persons on the grounds of
race, color, religion, national origin, age, sex, sexual orientation,
marital status, physical or learning disability, political beliefs, mental
retardation or history of mental disorder in any manner prohibited by the
laws of the United States or of the State.
(B) The Borrower will comply with the provisions of the
resolution adopted by the Authority on June 14, 1977, as amended, and the
policy of the Authority implemented pursuant thereto concerning the
promotion of equal employment opportunity through affirmative action plans.
The resolution requires that all borrowers receiving financial assistance
from the Authority adopt and implement an affirmative action plan prior to
the closing of the loan. The plan shall be updated annually as long as the
Bonds remain Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees
that it shall in all instances act in good faith in incurring costs,
expenses and legal fees in connection with the transactions contemplated by
this Agreement and the Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the
Borrower in the Financing Documents or any certificate, statement, data or
information furnished in writing to the Authority or the Trustee by the
Borrower in connection with the closing of the initial issue of the Bonds
or included by the Borrower in its application to the Authority for
assistance proves at any time to have been incorrect when made in any
material respect.
(2) Failure by the Borrower to pay any amount that has become
due and payable with respect to the Bonds or any other amount due and
payable pursuant to the Financing Documents and the continuance of such
failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default
notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section
8.1(A) of the Indenture (other than an occurrence under Section
8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant,
condition or agreement hereunder or under the Financing Documents (except
those referred to above) and (a) continuance of such failure for a period
of sixty days after receipt by the Borrower of written notice specifying
the nature of such failure or
(b) if by reason of the nature of such failure the same cannot be
remedied within the sixty day period, the Borrower fails to proceed
with reasonable diligence after receipt of the notice to cure the
failure.
(6) The Borrower shall
(a) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian or the like of itself or of its property, (b) admit
in writing its inability to pay its debts generally as they become due, (c)
make a general assignment for the benefit of creditors, (d) be adjudicated
a bankrupt or insolvent, or (e) commence a voluntary case under the Federal
bankruptcy laws of the United States of America or file a voluntary
petition or answer seeking reorganization, an arrangement with creditors or
an order for relief or seeking to take advantage of any insolvency law or
file an answer admitting the material allegations of a petition filed
against it in any bankruptcy, reorganization or insolvency proceeding; or
corporate action shall be taken by it for the purpose of effecting any of
the foregoing; or if without the application, approval or consent of the
Borrower, a proceeding shall be instituted in any court of competent
jurisdiction, seeking in respect of the Borrower an adjudication in
bankruptcy, reorganization, dissolution, winding up, liquidation, a
composition or arrangement with creditors, a readjustment of debts, the
appointment of a trustee, receiver, liquidator or custodian or the like of
the Borrower or of all or any substantial part of its assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and, if
such proceeding is being contested by the Borrower in good faith, the same
shall continue undismissed, or pending and unstayed, for any period of 90
consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default
shall have occurred, the Trustee, or the Authority where so provided
herein, may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII
of the Indenture, may cause all amounts payable under the Financing,
Documents to be immediately due and payable without notice or demand of any
kind, whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any
Bondholder, may proceed to enforce the obligations of the Borrower to the
Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity
it may have to collect the amounts then due and thereafter to become due,
or to enforce the performance or observance of the obligations, agreements,
and covenants of the Borrower under theFinancing Documents.
(B) In the event that any Event of Default or any proceeding
taken by the Authority (or by the Trustee on behalf of the Authority)
thereon shall be waived or determined adversely to the Authority, then the
Event of Default shall be annulled and the Authority and the Borrower shall
be restored to their former rights hereunder, but no such waiver or
determination shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the
Borrower shall fail to notify the Authority of the occurrence of any event
set forth in Section 6.4(A) hereof within 60 days of the determination
thereof as provided in Section 6.4(A), the Authority may, not later than
one year after obtaining knowledge of such determination and so long as
such failure is continuing, send a notice to the Trustee and the Borrower
calling for the acceleration of all of the Borrower's obligations under the
Financing Documents and for the redemption of all of the Bonds Outstanding.
Any such notice (i) shall set forth in reasonable detail the event giving
rise to the Borrower's obligation under Section 6.4(A), (ii) shall be
accompanied by such evidence thereof as shall be acceptable to the Trustee,
and (iii) shall specify the dates upon which (a) notice of redemption of
the Bonds is to be given by the Trustee (which shall not be less than 180
days from the date of the notice being given to the Trustee by the
Authority) and (b) the date redemption of Bonds is to occur (which shall be
a date at least thirty days after notice of redemption is to be given by
the Trustee).
(B) If, after receipt of notice from the Authority as
provided in Section 6.4(B), the Borrower shall fail to select a date for
redemption of all Outstanding Bonds, the Authority may, not earlier than 60
days prior to the date which is three years after the date notice was
mailed to the Borrower as provided in Section 6.4(B), send a notice to the
Trustee and the Borrower calling for the redemption of all of the Bonds
then Outstanding. Any such notice shall specify the date that notice of
redemption is to be given by the Trustee and the date that such redemption
is to occur.
(C) On or before the redemption date specified by the
Trustee in its notice of redemption pursuant to this Section, the Borrower
shall pay, as a final loan payment hereunder, a sum sufficient, together
with other funds on deposit with the Trustee and available for such
purpose, to redeem all Bonds then Outstanding under the Indenture at 100%
of the principal amount thereof plus accrued interest to the redemption
date. The Borrower shall also pay or provide for all reasonable and
necessary fees of the Trustee and any Paying Agent accrued and to accrue
through the date of redemption of the Bonds and all other amounts due or to
become due under the Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise
required by law, neither the Authority, the Trustee nor any Bondholder
shall be obligated to do any act whatsoever or exercise any diligence
whatsoever to mitigate the damages to the Borrower if an Event of Default
shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon
or reserved to the Authority or the Trustee is intended to be exclusive of
any other available remedy or remedies but each and every such remedy shall
be cumulative and shall be in addition to every remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute.
Delay or omission to exercise any right or power accruing upon any default
or failure by the Authority or the Trustee to insist upon the strict
performance of any of the covenants and agreements herein set forth or to
exercise any rights or remedies upon default by the Borrower hereunder
shall not impair any such right or power or be considered or taken as a
waiver or relinquishment for the future of the right to insist upon and to
enforce, by injunction or other appropriate legal or equitable remedy,
strict compliance by the Borrower with all of the covenants and conditions
hereof, or of the right to exercise any such rights or remedies, if such
default by the Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and
is hereby granted, the option to prepay its loan obligation and to cause
the corresponding optional redemption of the Bonds pursuant to Section
2.4(A) of the Indenture at such times, in such amounts, and with such
premium, if any, for such optional redemption as set forth in the forms of
the Bonds, by delivering a written notice to the Trustee in accordance with
Section 8.2 hereof, with a copy to the Authority, setting forth the amount
to be prepaid, the amount of Bonds requested to be redeemed with the
proceeds of such prepayment, and the date on which such Bonds are to be
redeemed. Such prepayment must be sufficient to provide monies for the
payment of interest and Redemption Price in accordance with the terms of
the Bonds requested to be redeemed with such prepayment and all other
amounts then due under the Financing Documents. In the event of any
complete prepayment of its loan obligation, the Borrower shall, at the time
of such prepayment, also pay or provide for the payment of all reasonable
or necessary fees and expenses of the Authority, the Trustee and the Paying
Agent accrued and to accrue through the final payment of all the Bonds.
Any such prepayments shall be applied to the redemption of Bonds in the
manner provided in Section 2.4(A) of the Indenture, and credited against
payments due hereunder in the same manner.
(B) The Borrower shall have, and is hereby granted, the option
to prepay its loan obligation in full at any time without premium if any of
the following events shall have occurred, as evidenced in each case by the
filing with the Trustee of a certificate of an Authorized Representative of
the Borrower to the effect that one of such events has occurred and is
continuing, and describing the same:
(1) Damage or destruction to any of the Plants or the Project
to such extent that in the opinion of the Borrower (expressed in a
resolution adopted by the Board of Directors of the Borrower (a "Board
Resolution")) and of an architect or engineer acceptable to the Borrower
(who may be an employee of the Borrower), both filed with the Authority and
the Trustee, (1) any of the Plants or the Project, as the case may be,
cannot be reasonably repaired, rebuilt, or restored within a period of six
(6) months to their condition immediately preceding such damage or
destruction, or (2) normal operations are thereby prevented from being
carried on at any of the Plants for a period of not less than six (6)
months.
(2) Loss of title to or use of a substantial part of any of
the Plants or the Project as a result of the exercise of the power of
eminent domain which, in the opinion of the Borrower (expressed in a Board
Resolution) and of an architect or engineer acceptable to the Borrower (who
may be an employee of the Borrower), both filed with the Authority and the
Trustee, prevents or is likely to prevent normal operations from being
carried on at any of the Plants for a period of not less than six (6)
months.
(3) A substantial part of any of the Plants or the Project
shall become obsolete in the opinion of the Borrower (expressed in a
Board Resolution).
(4) A change in the Constitution of the State of Connecticut
or of the United States of America or legislative or executive action
(whether local, state, or federal) or a final decree, judgment or order of
any court or administrative body (whether local, state, or federal) that
causes this Agreement to become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the parties as
expressed herein or, imposes unreasonable burdens or excessive liabilities
upon the Borrower with respect to any of the Plants or the Project or the
operation thereof.
(5) The operation of any of the Plants or the Project shall
have been enjoined or shall otherwise have been prohibited by any order,
decree, rule or regulation of any court or of any local, state, or federal
regulatory body, administrative agency or other governmental body for a
period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in
the economic availability of fuel, materials, supplies, labor, equipment,
or other properties or things necessary for the efficient operation of any
of the Plants or the Project shall have occurred which, in the judgment of
the Borrower (expressed in a Board Resolution), render the continued
operation of any of the Plants uneconomical. In any such case the final
loan payment shall be a sum sufficient, together with other funds deposited
with Trustee and available for such purpose, to redeem all Bonds then
outstanding under the Indenture at the redemption price of 100% of the
principal amount thereof plus accrued interest to the redemption date or
dates and all other amounts then due under the Financing Documents, and the
Borrower shall also pay or provide for all reasonable or necessary fees and
expenses of the Trustee and Paying Agent and the Remarketing Agent accrued
and to accrue through final payment for the Bonds. The Borrower shall
deliver a written notice to the Trustee, with a copy to the Authority,
requesting the redemption of the Bonds under the Indenture, which notice
shall have attached thereto the applicable certificate of the Authorized
Representative of the Borrower. The Borrower's right to so request the
redemption of the Bonds upon the occurrence of any single event listed in
this Section 8.1(B) shall expire six (6) months, and any such redemption
shall occur within nine (9) months, after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant
to Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the
prepayment date if Bonds to be redeemed with the amounts to prepaid
pursuant to the Indenture are then in the Flexible Mode, and forty-five
(45) days before the prepayment date if Bonds to be redeemed with the
amounts so prepaid pursuant to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower
shall pay or cause the prepayment of its loan obligation following a
Determination of Taxability in the manner provided in Section 6.3 of this
Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain
Events. The Borrower shall pay or cause the prepayment of its loan
obligation, prior to the maturity of the Bonds, on a date selected by the
Borrower, which date shall be not later than three years after the date of
mailing to the Borrower of notice from the Authority of the Authority's
election to accelerate the Borrower's loan obligation hereunder as provided
in Sections 6.4 and 7.3 hereof.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the
Bonds and all loan payments made by the Borrower and all other monies
received by the Authority or the Trustee under the Financing Documents
shall be applied solely and exclusively in the manner and for the purposes
expressed and specified in the Indenture and in the Bonds and as provided
in this Agreement.
(B) The Borrower shall have and may exercise all the rights,
powers and authority given the Borrower in the Indenture and in the Bonds,
and the Indenture and the Bonds shall not be modified, altered or amended
in any manner which adversely affects such rights, powers and authority or
otherwise adversely affects the Borrower without the prior written consent
of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The
Authority and the Borrower agree that this Agreement is executed in part to
induce the purchase by others of the Bonds and for the further securing of
the Bonds, and accordingly that all covenants and agreements on the part of
the Authority and the Borrower as to the amounts payable with respect to
the Bonds hereunder are hereby declared to be for the benefit of the
holders from time to time of the Bonds and may be enforced as provided in
the Indenture on behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure
either party hereto shall be rendered unable wholly or in part to carry out
its obligations under this Agreement, then except as otherwise expressly
provided in this Agreement, if such party shall give notice and full
particulars of such force majeure in writing to the other party within a
reasonable time after occurrence of the event or cause relied on, the
obligations of the party giving such notice, other than the obligation of
the Borrower to make the payments required under the terms hereof or of the
Note, so far as they are affected by such force majeure, shall be suspended
during the continuance of the inability then claimed which shall include a
reasonable time for the removal of the effect thereof, but for no longer
period, and such parties shall endeavor to remove or overcome such
inability with all reasonable dispatch. The term "force majeure", as
employed herein, means acts of God, strikes, lockouts or other industrial
disturbances, acts of the public enemy, orders of any kind of the
Government of the United States, of the State or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods,
washouts, droughts, arrests, restraining of government and people, civil
disturbances, explosions, partial or entire failure of utilities, shortages
of labor, material, supplies or transportation, or any other similar or
different cause not reasonably within the control of the party claiming
such inability. It is understood and agreed that the settlement of
existing or impending strikes, lockouts or other industrial disturbances
shall be entirely within the discretion of the party having the difficulty
and that the above requirements that any force majeure shall be reasonably
beyond the control of the party and shall be remedied with all reasonable
dispatch shall be deemed to be fulfilled even though such existing or
impending strikes, lockouts and other industrial disturbances may not be
settled and could have been settled by acceding to the demands of the
opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with
the concurring written consent of the Trustee and, if required by the
Indenture, of the owners of the Bonds given in accordance with the
provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by registered or certified mail,
postage prepaid, addressed as follows: if to the Authority, at 845 Brook
Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan
Administration; if to the Borrower, c/o Northeast Utilities Service Company
at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant
Treasurer; if to the Remarketing Agent, Morgan Stanley & Co., Inc., 1221
Avenue of the Americas, New York, New York 10020, Attention: Short Term
Sales and Trading - Tax Exempt Securities Department; if to the Paying
Agent, Shawmut Bank Connecticut, National Association, 777 Main Street,
Hartford, Connecticut 06115, Attention: Corporate Trust Department; and if
to the Trustee, Shawmut Bank Connecticut, National Association, 777 Main
Street, Hartford, Connecticut 06115, Attention: Corporate Trust
Department. A duplicate copy of each notice, certificate or other
communication given hereunder by either the Authority or the Borrower to
the other shall also be given to the Trustee. The Authority, the Borrower,
the Remarketing Agent, the Paying Agent and the Trustee may, by notice
given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together
with all agreements executed by the parties concurrently herewith or in
conjunction with the sale of the Bonds, shall completely and fully
supersede all other prior understandings or agreements, both written and
oral, between the Authority and the Borrower relating to the lending of
money and the Project, including those contained in any commitment letter
executed in anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be
executed simultaneously in several counterparts each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this
Agreement are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
executed in its corporate name by a duly Authorized Representative, and the
Borrower has caused this Agreement to be executed in its corporate name by
its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By/s/ Stanley R. Killinger
Name: Stanley R. Killinger
Authorized Representative
The Connecticut Light and
Power Company
By /s/ Bruce F. Garelick
Name: Bruce F. Garelick
Title: Assistant Treasurer
APPENDIX B
Description of Project Equipment and Project Realty