Exhibit 4.2.24
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
Among
THE CONNECTICUT LIGHT AND
POWER COMPANY
as Account Party
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
as Issuing Bank and as Agent
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
Connecticut Development Authority
$70,000,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993B Series)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . 2
1.02 Computation of Time Periods . . . . . . . 13
1.03 Accounting Terms. . . . . . . . . . . . . 13
1.04 Computations of Outstandings. . . . . . . 14
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit. . . . . . . . . . . 14
2.02 Termination of the Commitments. . . . . . 14
2.03 Commissions and Fees . . . . . . . . . . 14
2.04 Reinstatement of the Letter of Credit . . 15
2.05 Extension of the Stated Termination Date. 16
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . 17
3.02 Advances . . . . . . . . . . . . . . . . 17
3.03 Interest on Advances. . . . . . . . . . . 18
3.04 Prepayment of Advances. . . . . . . . . . 18
3.05 Participation; Reimbursement of . . . . . 19
Issuing Bank
ARTICLE IV
PAYMENTS
4.01 Payments and Computations . . . . . . . . 22
4.02 Default Interest. . . . . . . . . . . . . 24
4.03 Yield Protection. . . . . . . . . . . . . 24
4.04 Sharing of Payments, Etc. . . . . . . . . 26
4.05 Taxes . . . . . . . . . . . . . . . . . . 26
4.06 Obligations Absolute. . . . . . . . . . . 29
4.07 Evidence of Indebtedness . . . . . . . . 30
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . 30
5.02 Additional Conditions Precedent to the
Issuance of the Letter of Credi. . . . . 34
5.03 Conditions Precedent to Initial Advances. 34
5.04 Conditions Precedent to Term Advances . . 35
5.05 Reliance on Certificates. . . . . . . . . 35
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of
the Account Party . . . . . . . . . . . . 36
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants . . . . . . . . . . 40
7.02 Negative Covenants. . . . . . . . . . . . 43
7.03 Reporting Obligations . . . . . . . . . . 48
ARTICLE VIII
DEFAULTS
8.01 Events of Default . . . . . . . . . . . . 51
8.02 Remedies Upon Events of Default . . . . . 54
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank . . . . . . . . . . . . 55
9.02 Reliance, Etc.. . . . . . . . . . . . . . 55
9.03 The Agent, the Issuing Bank and Affiliates 56
9.04 Participating Bank Credit Decision. . . . 56
9.05 Indemnification . . . . . . . . . . . . . 57
9.06 Successor Agent . . . . . . . . . . . . . 57
9.07 Issuing Bank. . . . . . . . . . . . . . . 58
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. . . . . . . . . . . . . 58
10.02 Notices, Etc. . . . . . . . . . . . . . . 59
10.03 No Waiver of Remedies . . . . . . . . . . 60
10.04 Costs, Expenses and Indemnification . . . 60
10.05 Right of Set-Off. . . . . . . . . . . . . 62
10.06 Binding Effect; Assignments and Participants 63
10.07 Relation of the Parties; No Beneficiary . 64
10.08 Issuing Bank Not Liable . . . . . . . . . 65
10.09 Confidentiality . . . . . . . . . . . . . 66
10.10 Waiver of Jury Trial. . . . . . . . . . . 66
10.11 Governing Law . . . . . . . . . . . . . . 67
10.12 Execution in Counterparts . . . . . . . . 67
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of King & Spalding,
special New York counsel to the Agent and the
Issuing Bank
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this Agreement ) is
made by and among:
(i) THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation duly
organized and validly existing under the laws of the State of Connecticut
(the Account Party );
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH ( UBS ), as issuer of
the Letter of Credit (the Issuing Bank );
(iii) The Participating Banks (as hereinafter defined) from time to
time party hereto; and
(iv) UBS as agent (together with any successor agent hereunder, the
Agent) for such Participating Banks and the Issuing Bank.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the Issuer ) proposes to
issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the Indenture ), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being
the Trustee ), $70,000,000 aggregate principal amount of its Pollution
Control Revenue Refunding Bonds (The Connecticut Light and Power Company
Project - 1993B Series) (the Bonds ). Pursuant to the Indenture and the
Loan Agreement, dated as of September 1, 1993, between the Issuer and the
Account Party (the Loan Agreement ), the Account Party has requested the
Issuing Bank to issue its irrevocable letter of credit in favor of the
Paying Agent (as defined below), in substantially the form of Exhibit 1.01A
hereto (such letter of credit, as it may from time to time be extended or
modified pursuant to the terms of this Agreement, being the Letter of
Credit ), in the amount of $71,036,000 (the Stated Amount ), of which (i)
$70,000,000 shall support the payment of principal of the Bonds (or the
portion of the purchase or redemption price of the Bonds corresponding to
principal), (ii) $1,036,000 shall support the payment of up to 45 days'
interest on the principal amount of the Bonds (or the portion of the
purchase or redemption price of the Bonds corresponding to interest),
computed at a maximum interest rate of 12% per annum on the basis of the
actual days elapsed and a year of 365 or 366 days (as applicable) and (iii)
$0.00 shall support the payment of premium on the Bonds. The Issuing Bank
has agreed to issue the Letter of Credit subject to the terms and
conditions set forth herein (including the terms and conditions relating to
the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to induce
the Issuing Bank to issue the Letter of Credit and the Participating Banks
to participate in the Letter of Credit and make advances hereunder, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to the terms defined
in the Preliminary Statement hereto, as used in this Agreement, the
following terms shall have the following meanings (such meanings to be
applicable to the singular and plural forms of the terms defined):
Advances means Initial Advances and Term Advances, without
differentiation; individually, an Advance .
Affiliate means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to
control another entity if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies
of such entity, whether through the ownership of voting securities, by
contract or otherwise.
Alternate Base Rate means a fluctuating interest rate per annum
equal at all times to the highest from time to time of:
(a) the rate of interest announced publicly by UBS in New
York, New York, from time to time, as UBS's prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds
Rate from time to time.
Each change in the Alternate Base Rate shall take effect
concurrently with any change in such prime rate or Federal Funds Rate, as
the case may be.
Applicable Commission means, for any period, the
percentage set forth below corresponding to the ratings then assigned by
Moody's and S&P to the Account Party's first mortgage bonds (or other
senior secured debt) not supported by letters of credit or other credit
enhancement facilities, the Applicable Commission to change as when such
ratings change; in the event of a split rating, the lower rating shall
govern:
Moody's S&P Applicable Commission
A3 or Higher A- or Higher 0.35%
Baa1 and Baa2 BBB+ and BBB 0.40%
Baa3 BBB- 0.55%
Ba1 or Below BB+ or Below 0.70%
Applicable Lending Office means, with respect to each
Participating Bank, such Participating Bank's Domestic Lending Office as
specified opposite such Participating Bank's name on Schedule I hereto (in
the case of a Participating Bank initially party to this Agreement) or in
the Participation Assignment pursuant to which such Participating Bank
became a Participating Bank (in the case of any other Participating Bank),
or such other office or affiliate of such Participating Bank as such
Participating Bank may from time to time specify to the Account Party and
the Agent.
Available Amount in effect at any time means the maximum
aggregate amount available to be drawn at such time under the Letter of
Credit, the determination of such maximum amount to assume compliance with
all conditions for drawing and no reduction for (i) any amount drawn by the
Paying Agent to make a regularly scheduled payment of interest on the Bonds
(unless such amount will not be reinstated under the Letter of Credit) or
(ii) any amount not available to be drawn because Bonds are held by or for
the account of the Account Party and/or in pledge for the benefit of the
Issuing Bank.
Bonds has the meaning assigned to that term in the Preliminary
Statement.
Business Day means a day of the year that is not a Saturday or
Sunday or a day on which banks are authorized to close in New York City
and, if the applicable Business Day relates to any action to be taken by,
or notice furnished to or by, or payment to be made to or by, the Trustee,
the Paying Agent or the Remarketing Agent, is a day on which (A) banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed, (B) banking institutions in all of the cities
in which the principal offices of the Issuing Bank, the Trustee, the Paying
Agent and, if applicable, the Remarketing Agent are located are not
required or authorized to remain closed and (C) the New York Stock
Exchange, Inc. is not closed.
CL&P Indenture has the meaning assigned to that term in Section
7.02(a)(i)(A) hereof.
Closing Date means the Business Day upon which each of the
conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall be
fulfilled to the satisfaction of the Agent, the Issuing Bank, the
Participating Banks and the Account Party. All transactions contemplated
to occur on the Closing Date shall occur contemporaneously on or prior to
November 15, 1993, at the offices of King & Spalding, 120 West 45th Street,
New York, New York 10036, at 10:00 A.M. (New York City time), or at such
other place and time as the parties hereto may mutually agree.
Collateral means all of the collateral in which liens,
mortgages or security interests are purported to be granted by any or all
of the Security Documents.
Commitment means, for each Participating Bank, such
Participating Bank's Participation Percentage of the Available Amount.
Commitments shall refer to the aggregate of the Commitments.
Confidential Information has the meaning assigned to that term
in Section 10.09 hereof.
Consolidated Capitalization means, for any period, the aggregate
of all amounts that would, in accordance with generally accepted accounting
principles and consistent with those applied in the preparation of the
Account Party's consolidated financial statements included in its Annual
Report on Form 10-K for the year ended December 31, 1992, appear on the
Account Party's consolidated balance sheet as the sum of (i) the total
principal amount of all long-term Debt of the Account Party and its
Subsidiaries (excluding, however, Debt not to exceed $400,000,000 existing
under any nuclear fuel financing so long as the proceeds of such Debt are
used solely to finance the purchase and carrying of nuclear fuel and so
long as the appropriate regulatory authorities have not taken any action
which would not allow the costs with respect to such financing to be
recovered through the rate making process), (ii) the aggregate of the par
value of, or stated capital represented by, the outstanding shares of all
classes of common and preferred shares of the Account Party and its
Subsidiaries, (iii) the consolidated surplus of the Account Party and its
Subsidiaries, paid-in, earned and other, if any, and (iv) the excess, if
any, of (A) the aggregate unpaid principal amount of all short-term Debt of
the Account Party and its Subsidiaries over (B) 10% of the sum of clauses
(i), (ii) and (iii) above.
Consolidated Common Equity means, for any period, an amount
equal to the sum of the aggregate of the par value of, or stated capital
represented by, the outstanding common shares of the Account Party and its
Subsidiaries and the surplus, paid-in, earned and other, if any, of the
Account Party and its Subsidiaries as determined on a consolidated basis in
accordance with generally accepted accounting principles.
Credit Termination Date means the date on which the Letter of
Credit shall terminate in accordance with its terms.
Debt means, for any Person, without duplication, (i)
indebtedness of such Person for borrowed money, including but not limited
to obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (ii) obligations of such Person to pay the
deferred purchase price of property or services (excluding any obligation
of such Person to the United States Department of Energy or its successor
with respect to disposition of spent nuclear fuel burned prior to April 3,
1983), (iii) obligations of such Person as lessee under leases which shall
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (iv) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others
of the kinds referred to in clauses (i) through (iii), above, and (v)
liabilities in respect of unfunded vested benefits under ERISA Plans.
Default Rate means a fluctuating interest rate equal at all
times to two percent (2.00%) per annum above the Alternate Base Rate in
effect from time to time.
ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
ERISA Affiliate means, with respect to any Person, any trade or
business (whether or not incorporated) which is a commonly controlled
entity of the Account Party within the meaning of the regulations under
Section 414 of the Internal Revenue Code of 1986, as amended from time to
time.
ERISA Multiemployer Plan means a multiemployer plan subject to
Title IV of ERISA.
ERISA Plan means an employee benefit plan (other than an ERISA
Multiemployer Plan) maintained for employees of the Account Party or any
ERISA Affiliate and covered by Title IV of ERISA.
ERISA Plan Termination Event means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued thereunder
(other than a Reportable Event not subject to the provision for 30-day
notice to the PBGC under such regulations) with respect to an ERISA Plan or
an ERISA Multiemployer Plan, or (ii) the withdrawal of the Account Party or
any of its ERISA Affiliates from an ERISA Plan or an ERISA Multiemployer
Plan during a plan year in which it was a substantial employer as defined
in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent
to terminate an ERISA Plan or an ERISA Multiemployer Plan or the treatment
of an ERISA Plan or an ERISA Multiemployer Plan under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate an ERISA Plan or
an ERISA Multiemployer Plan by the PBGC, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
ERISA Plan or ERISA Multiemployer Plan.
Event of Default has the meaning assigned to that term in
Section 8.01.
Federal Funds Rate means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published on the next succeeding
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
FERC means the Federal Energy Regulatory Commission.
Governmental Approval means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or regulatory
body (including, without limitation, the Securities and Exchange
Commission, the FERC, the Nuclear Regulatory Commission and the Connecticut
Department of Public Utility Control), required in connection with either
(i) the execution, delivery or performance of any Loan Document or Related
Document or the grant and perfection of any lien or security interest
contemplated by the Security Documents or (ii) the nature of the Account
Party's or any Principal Subsidiary's business as conducted or the nature
of the property owned or leased by it.
Hazardous Substance means any waste, substance or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau or instrumentality of the United
States of America or of the State or locality in which the same is located
having or exercising jurisdiction over such waste, substance or material.
Indemnified Person has the meaning assigned to that term in
Section 10.04(b) hereof.
Indenture has the meaning assigned to that term in the
Preliminary Statement.
Indenture Documents means, collectively, the Indenture and the
Loan Agreement, together with all amendments, modifications and supplements
thereto; individually, an Indenture Document .
Initial Advance has the meaning assigned to that term in Section
3.02(a) hereof.
Initial Repayment Date has the meaning assigned to that term in
Section 3.02(a) hereof.
Interest Component has the meaning assigned to that term in the
Letter of Credit.
Interest Drawing has the meaning assigned to that term in the
Letter of Credit.
Issuer has the meaning assigned to that term in the Preliminary
Statement.
Issuer Resolution means the resolution adopted by the Issuer
that authorized the issuance of the Bonds, approved the terms and
provisions of the Bonds, and approved those of the documents related to the
Bonds to which the Issuer is a party.
Letter of Credit has the meaning assigned to that term in the
Preliminary Statement.
Lien has the meaning assigned to that term in Section 7.02(a)
hereof.
Loan Agreement has the meaning assigned to that term in the
Preliminary Statement.
Loan Documents means this Agreement and the Security Documents.
Majority Lenders means on any date of determination, (i) the
Issuing Bank and (ii) Participating Banks who, collectively, on such date,
have Participation Percentages in the aggregate of at least 66-2/3%.
Determination of those Participating Banks satisfying the criteria
specified above for action by the Majority Lenders shall be made by the
Agent and shall be conclusive and binding on all parties absent manifest
error.
Moody's means Moody's Investors Service, Inc. or any successor
thereto.
NU means Northeast Utilities, an unincorporated voluntary
business association organized under the laws of the Commonwealth of
Massachusetts.
Participant shall have the meaning assigned to that term in
Section 10.06(b) hereof.
Participating Banks means the Persons listed on the signature
pages hereof following the heading Participating Banks and any other
Person who becomes a party hereto pursuant to Section 10.06 hereof.
Participation Assignment means a participation assignment
entered into pursuant to Section 10.06 hereof by any Participating Bank and
an assignee, in substantially the form of Exhibit 1.01B hereto.
Participation Percentage means, as of any date of determination
(i) with respect to a Participating Bank initially a party hereto, the
percentage set forth opposite such Participating Bank's name on the
signature pages hereof, except as provided in clause (iii), below, (ii)
with respect to a Participating Bank that became a party hereto by
operation of Section 10.06(a) hereof, the Participation Percentage stated
to be assumed by such assignee Participating Bank in the relevant
Participation Assignment, except as provided in clause (iii), below, and
(iii) with respect to any Participating Bank described in clauses (i) and
(ii), above, that assigns a percentage of its interests in accordance with
Section 10.06(a) hereof, its Participation Percentage as reduced by the
percentage so assigned.
Paying Agent means (i) Shawmut Bank Connecticut, National
Association, as the initial paying agent for the Bonds under the Indenture
Documents, and (ii) any successor paying agent for the Bonds under the
Indenture Documents.
PBGC means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
Person means an individual, partnership, corporation (including
a business trust), joint stock company, trust, estate, unincorporated
association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
Pledge Agreement means the Pledge Agreement, dated as of
September 1, 1993, by the Account Party in favor of the Issuing Bank for
the benefit of the Agent and the Participating Banks, in substantially the
form of Exhibit 1.01C hereto, and as the same may from time to time be
amended, modified or supplemented.
Pledged Bonds shall have the meaning assigned to that term in
the Pledge Agreement.
Premium Component has the meaning assigned to that term in the
Letter of Credit.
Principal Component has the meaning assigned to that term in the
Letter of Credit.
Principal Subsidiary means a Subsidiary, whether owned directly
or indirectly by the Account Party, which, with respect to the Account
Party and its Subsidiaries taken as a whole, represents a material portion
of the Account Party's consolidated assets or consolidated net income (or
loss), (it being understood that, as of the date of this Agreement, the
Account Party has no Principal Subsidiaries).
Purchase Contract means the Bond Purchase Agreement, dated
September 21, 1993, among the Issuer, the Account Party and Goldman, Sachs
& Co., Individually and as Representative of Advest, Inc., Greenwich
Partners, Inc. and U.S. Securities, Inc.
Recipient has the meaning assigned to that term in Section
10.09 hereto.
Regulatory Transaction means any merger or consolidation of the
Account Party with or into, or any purchase or acquisition by the Account
Party of the assets of (and any related assumption by the Account Party of
the liabilities of) any utility company or utility- related company, if
such transaction is undertaken pursuant to an order or request of, or
otherwise in fulfillment of the stated goals of, a utility regulatory
agency having jurisdiction over NU or any of its Subsidiaries.
Regulatory Transaction Entity means any utility company or
utility-related company (other than the Account Party) that is the subject
of a Regulatory Transaction.
Related Documents means the Letter of Credit, the Bonds, the
Indenture Documents, any Remarketing Agreement and the Purchase Contract.
Remarketing Agent has the meaning assigned to that term in the
Indenture Documents.
Remarketing Agreement means (i) the Remarketing Agreement, dated
as of September 1, 1993, among the Issuer, the Account Party and Goldman,
Sachs & Co., as the same may be amended from time to time; and (ii) any
successor remarketing agreement between the Account Party and a successor
Remarketing Agent as shall be in effect from time to time in accordance
with the terms of the Indenture Documents.
S&P means Standard and Poor's Corporation or any successor
thereto.
Second Mortgage means the Open End Mortgage and Trust Agreement
made as of October 1, 1986, by and between the Account Party and Bank of
Boston Connecticut, as trustee, as amended through the date hereof to
secure the obligations of the Account Party hereunder and as the same may
be further amended, modified or supplemented from time to time.
Security Documents means the Pledge Agreement and the Indenture
Documents, but shall not include the Second Mortgage.
Stated Amount has the meaning assigned to that term in the
Preliminary Statement hereto.
Stated Termination Date means the expiration date specified in
clause (i) of the first paragraph of Paragraph (1) of the Letter of Credit,
as such date may be extended pursuant to Section 2.05 hereof.
Subsidiary shall mean, with respect to any Person (the Parent),
any corporation, association or other business entity of which securities
or other ownership interests representing 50% or more of the ordinary
voting power are, at the time as of which any determination is being made,
owned or controlled by the Parent or one or more Subsidiaries of the Parent
or by the Parent and one or more Subsidiaries of the Parent.
Tender Drawing has the meaning assigned to that term in the
Letter of Credit.
Term Advance has the meaning assigned to that term in Section
3.02(b) hereof.
Term Borrowing means a borrowing consisting of Term Advances made
on the same day by the Participating Banks, ratably in accordance with
their respective Participation Percentages.
Termination Date means the Credit Termination Date or the earlier
date of termination of the Commitments pursuant to Sections 2.02 or 8.02
hereunder.
Trustee has the meaning assigned to that term in the Preliminary
Statement hereto.
Unmatured Default means the occurrence and continuance of an
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default.
SECTION 1.02. Computation of Time Periods. In the computation of periods
of time under this Agreement any period of a specified number of days or
months shall be computed by including the first day or month occurring
during such period and excluding the last such day or month. In the case
of a period of time from a specified date to or until a later
specified date, the word from means from and including and the words
to and until each means to but excluding .
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles applied on a basis consistent with the application
employed in the preparation of the Account Party's consolidated financial
statements included in its Annual Report on Form 10-K for the year ended
December 31, 1992.
SECTION 1.04. Computations of Outstandings. Whenever reference is made
in this Agreement to the principal amount outstanding on any date under
this Agreement, such reference shall refer to the sum of (i) the Available
Amount on such date, (ii) the aggregate principal amount of all Advances
outstanding on such date and (iii) the aggregate amount of all demand loans
under Section 3.01 hereunder on such date, in each case after giving effect
to all transactions to be made on such date and the application of the
proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the
terms and conditions hereinafter set forth (including, without limitation,
the applicable conditions precedent set forth in Article V hereof), to
issue the Letter of Credit to the Paying Agent, upon not less than three
Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of the
Issuing Bank to issue the Letter of Credit shall automatically terminate if
not issued on or before 5:00 P.M. (New York City time) on November 15,
1993.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby
agrees to pay to the Agent, for the account of the Participating Banks
ratably in accordance with their respective Participation Percentages, a
letter of credit commission on the Available Amount in effect from time to
time from the date of issuance of the Letter of Credit until the
Termination Date (disregarding for such purpose any temporary diminution
thereof arising from drawings under the Letter of Credit to pay interest
(or purchase price corresponding to interest) on the Bonds, regardless of
whether the amount so drawn shall be thereafter reinstated), at a rate per
annum equal to the Applicable Commission, payable quarterly in arrears on
the first day of March, June, September and December in each year,
commencing on the first such date to occur following the date of issuance
of the Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent, for the
account of the Agent and the Issuing Bank, such other fees as may be agreed
upon from time to time by the Account Party and the Agent and the Issuing
Bank.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The Interest
Component and the Principal Component shall, from time to time, be
reinstated by the Issuing Bank in accordance with, and only to the extent
provided in, the Letter of Credit. In no event shall reductions in the
Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement
of reductions in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any notice
of non-reinstatement pursuant to Paragraph 5(i)(A) of the Letter of Credit
if (A) the Issuing Bank and/or the Participating Banks have not been
reimbursed in full by the Account Party for one or more drawings, together
with interest, if any, owing thereon pursuant to this Agreement, or (B) an
Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of
non-reinstatement, the circumstances giving rise to the delivery of such
notice of non-reinstatement shall have ceased to exist (whether as a result
of reimbursement of unreimbursed drawings, or waiver or cure of an Event of
Default, or otherwise), then, provided that no other Event of Default shall
have occurred and be continuing, the Issuing Bank shall deliver to the
Paying Agent, by hand delivery or facsimile transmission, a Notice of
Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating
that portion of the Interest Component in respect of which such notice of
non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a reduction
in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to
Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall
have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such
Tender Drawing shall have been repaid by the Account Party, together with
any interest thereon and any other amounts payable hereunder in connection
therewith; AND
(iv) no Event of Default shall have occurred and then be
continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery
or facsimile transmission, a Notice of Reinstatement in the form of Exhibit
5 to the Letter of Credit reinstating the Principal Component to the extent
of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the
Letter of Credit shall have previously expired in accordance with its
terms, at least 60 days but not more than 90 days before each anniversary
date of this Agreement, the Account Party may, by notice to the Agent (any
such notice being irrevocable), request the Issuing Bank and the
Participating Banks to extend the Stated Termination Date of the Letter of
Credit for a period of one year. If the Account Party shall make such
request, the Agent shall promptly inform the Issuing Bank and the
Participating Banks and, no later than 15 days prior to such anniversary
date, the Agent shall notify the Account Party in writing (with a copy of
such notice to the Trustee and the Paying Agent) if the Issuing Bank and
all of the Participating Banks consent to such request and the conditions
of such consent (including conditions relating to legal documentation). If
such consent is granted, the Stated Termination Date as theretofore in
effect shall be extended for one year, such extension to take effect on
such anniversary date. The granting of any such consent shall be in the
sole and absolute discretion of the Issuing Bank and all of the
Participating Banks, and if the Agent shall not so notify the Account
Party, such lack of notification shall be deemed to be a determination not
to consent to such request.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the
provisions of Section 3.02 hereof, the Account Party hereby agrees to pay
(whether with the proceeds of Initial Advances made pursuant to this
Agreement or otherwise) to the Issuing Bank on demand (a) on and after each
date on which the Issuing Bank shall pay any amount under the Letter of
Credit pursuant to any draft, but only after so paid by the Issuing Bank, a
sum equal to such amount so paid (which sum shall constitute a demand loan
from the Issuing Bank to the Account Party from the date of such payment by
the Issuing Bank until so paid by the Account Party), plus (b) interest on
any amount remaining unpaid by the Account Party to the Issuing Bank under
clause (a), above, from the date such amount becomes payable on demand
until payment in full, at the Default Rate in effect from time to time. No
reinstatement of the Interest Component or the Principal Component despite
the failure by the Account Party to reimburse the Issuing Bank for any
previous drawing to pay interest on the Bonds shall limit or impair the
Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make
Initial Advances and Term Advances for the account of the Account Party
from time to time upon the terms and subject to the conditions set forth in
this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the Issuing
Bank shall honor any Tender Drawing and if the conditions precedent set
forth in Section 5.03 of this Agreement have been satisfied as of the date
of such honor, then, each Participating Bank's payment made to the Issuing
Bank pursuant to Section 3.05 hereof in respect of such Tender Drawing
shall be deemed to constitute an advance made for the account of the
Account Party by such Participating Bank (each such advance being an
Initial Advance made by such Participating Bank). Subject to Article VIII
of this Agreement, each Initial Advance and all interest thereon shall be
due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the Initial
Repayment Date for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.04 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction
of the conditions precedent set forth in Section 5.04 hereof and the other
conditions of this subsection (b), each Participating Bank agrees to make
one or more advances for the account of the Account Party ( Term Advances )
on each Initial Repayment Date in an aggregate principal amount equal to
the amount of such Participating Bank's Initial Advances maturing on such
Initial Repayment Date. All Term Advances comprising a single Term
Borrowing shall be made upon written notice given by the Account Party to
the Agent not later than 11:00 A.M. (New York City time) on the Business
Day of such proposed Term Borrowing. The Agent shall notify each
Participating Bank of the contents of such notice promptly after receipt
thereof. Each such notice shall specify therein the date on which such
Term Borrowing is to be made and the principal amount of Term Advances
comprising such Term Borrowing. The proceeds of each Participating Bank's
Term Advances shall be applied solely to the repayment of the Initial
Advances made by such Participating Bank and shall in no event be made
available to the Account Party. The principal amount of each Term Advance,
together with all accrued and unpaid interest thereon, shall be due and
payable on the earlier to occur of (x) the same calendar date occurring 35
months following the date upon which such Term Advance is made (or, if such
month does not have a corresponding date, on the last day of such month)
and (y) the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay
interest on the unpaid principal amount of each Advance from the date of
such Advance until such principal amount is paid in full at a fluctuating
interest rate per annum equal to the Alternate Base Rate in effect from
time to time. The Account Party shall pay interest on each Advance
quarterly in arrears on the first day of March, June, September and
December in each year and on the Termination Date or the earlier date for
repayment of such Advance (including the Initial Repayment Date therefor,
in the case of an Initial Advance).
SECTION 3.04. Prepayment of Advances. (a) The Account Party
shall have no right to prepay any principal amount of any Advances except
in accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's notice
to the Agent stating the proposed date and aggregate principal amount of
the prepayment and the specific Initial Advances or Term Borrowing(s) to be
prepaid, and if such notice is given, the Account Party shall, prepay, in
whole or ratably in part, together with accrued interest to the date of
such prepayment on the principal amount prepaid, the outstanding principal
amount of (i) all Initial Advances made on the same date or (ii) all Term
Advances comprising the same Term Borrowing, in each case as the Account
Party shall designate in such notice; provided, however, that each partial
prepayment shall be in an aggregate principal amount not less than
$10,000,000, or, if less, the aggregate principal amount of all Advances
then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds
purchased with the proceeds of a Tender Drawing, the Account Party shall
prepay, or cause to be prepaid, in full, the then outstanding principal
amount of all Initial Advances and of all Term Advances comprising the same
Term Borrowing(s) arising pursuant to such Tender Drawing, together with
all interest thereon to the date of such prepayment. If less than all of
such Bonds are resold, then prior to or simultaneously with such resale the
Account Party shall prepay or cause to be prepaid that portion of such
Advances, together with all interest thereon to the date of such
prepayment, equal to the then outstanding principal amount thereof
multiplied by a fraction, the numerator of which shall be the principal
amount of the Bonds resold and the denominator of which shall be the
principal amount of all of the Bonds purchased with the proceeds of the
relevant Tender Drawing.
SECTION 3.05. Participation; Reimbursement of Issuing Bank. (a)
The Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in
full for any payment made by the Issuing Bank under the Letter of Credit on
the date of such payment or (ii) shall make any demand loan to the Account
Party, the Issuing Bank shall promptly notify the Agent and the Agent shall
promptly notify each Participating Bank of such non-reimbursement or demand
loan and the amount thereof. Upon receipt of such notice from the Agent,
each Participating Bank shall pay to the Issuing Bank, directly, an amount
equal to such Participating Bank's ratable portion (according to such
Participating Bank's Participation Percentage) of such unreimbursed amount
or demand loan paid or made by the Issuing Bank, plus interest on such
amount at a rate per annum equal to the Federal Funds Rate from the date of
such payment by the Issuing Bank to the date of payment to the Issuing Bank
by such Participating Bank. All such payments by each Participating Bank
shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the
day such notice is received by such Participating Bank if such notice is
received at or prior to 12:30 P.M. (New York City time) on a Business Day;
or
(y) not later than 12:00 Noon (New York City time) on the
Business Day next succeeding the day such notice is received by such
Participating Bank, if such notice is received after 12:30 P.M. (New York
City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable
portion of any unreimbursed amount or demand loan paid or made by the
Issuing Bank, together with all interest thereon required by the second
sentence of this subsection (b), such Participating Bank shall be entitled
to receive its ratable share of all interest paid by the Account Party in
respect of such unreimbursed amount or demand loan from the date paid or
made by the Issuing Bank. If such Participating Bank shall have made such
payment to the Issuing Bank, but without all such interest thereon required
by the second sentence of this subsection (b), such Participating Bank
shall be entitled to receive its ratable share of the interest paid by the
Account Party in respect of such unreimbursed amount or demand loan only
from the date it shall have paid all interest required by the second
sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each payment
to the Issuing Bank, and the Issuing Bank's right to receive the same,
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the foregoing or
Section 4.06 hereof, or the occurrence or continuance of an Event of
Default, or the non-satisfaction of any condition precedent set forth in
Sections 5.03 or 5.04 hereof, or the failure of any other Participating
Bank to make any payment under this Section 3.05. Each Participating Bank
further agrees that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment
to the Issuing Bank in accordance with subsection (b) above, shall not
relieve any other Participating Bank of its obligation to make payment, but
neither the Issuing Bank nor any Participating Bank shall be responsible
for the failure of any other Participating Bank to make such payment. If
any Participating Bank shall fail to make any payment to the Issuing Bank
in accordance with subsection (b) above, then such Participating Bank shall
pay to the Issuing Bank forthwith on demand such corresponding amount
together with interest thereon, for each day until the date such amount is
repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall
in any way limit, waive or otherwise reduce any claims that any party
hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to
the Issuing Bank in accordance with subsection (b) above, then, in addition
to other rights and remedies which the Issuing Bank may have, the Agent is
hereby authorized, at the request of the Issuing Bank, to withhold and to
apply to the payment of such amounts owing by such Participating Bank to
the Issuing Bank and any related interest, that portion of any payment
received by the Agent that would otherwise be payable to such Participating
Bank. In furtherance of the foregoing, if any Participating Bank shall
fail to make any payment to the Issuing Bank in accordance with subsection
(b), above, and such failure shall continue for five Business Days
following written notice of such failure from the Issuing Bank to such
Participating Bank, the Issuing Bank may acquire, or transfer to a third
party in exchange for the sum or sums due from such Participating Bank,
such Participating Bank's interest in the related unreimbursed amounts and
demand loans and all other rights of such Participating Bank hereunder in
respect thereof, without, however, relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such
Participating Bank and shall be entitled to receive all subsequent payments
which the Issuing Bank or the Agent would otherwise have made hereunder to
such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account
Party shall make each payment hereunder (i) in the case of reimbursement
obligations pursuant to Section 3.01 hereof (excluding any portion thereof
in respect of which an Initial Advance is to be made), not later than 2:30
P.M. (New York City time) on the day the related drawing under the Letter
of Credit is paid by the Issuing Bank, and (ii) in all other cases, not
later than 12:30 P.M. (New York City time) on the day when due, in each
case in lawful money of the United States of America to the Agent at its
address referred to in Section 10.02 hereof in immediately available funds.
The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of reimbursements, principal, interest, fees or
other amounts payable to the Issuing Bank and the Participating Banks to
whom the same are payable, ratably and without offset or counterclaim
except as provided in Section 3.05, at its address set forth in Section
10.02 hereof (in the case of the Issuing Bank) or for the account of their
respective Applicable Lending Offices (in the case of the Participating
Banks), in each case to be applied in accordance with the terms of this
Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each
Participating Bank, if and to the extent payment owed to the Issuing Bank,
or such Participating Bank, as the case may be, is not made when due
hereunder, to charge from time to time against any or all of the Account
Party's accounts with the Issuing Bank or such Participating Bank, as the
case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate
when based on UBS's prime rate referred to in the definition of Alternate
Base Rate shall be made by the Agent on the basis of a year of 365 or 366
days, as the case may be. All other computations of interest hereunder
(including computations of interest based on the Federal Funds Rate
(including the Alternate Base Rate if and so long as such Rate is based on
the Federal Funds Rate)), and of all fees, commissions, and other amounts
payable hereunder shall be made by the Agent or the party claiming such
other amounts, as the case may be, on the basis of a year of 360 days. In
each such case, such computation shall be made for the actual number of
days (including the first day, but excluding the last day) occurring in the
period for which such interest, fees, commissions or other amounts are
payable. Each such determination by the Agent or a Participating Bank, as
the case may be, shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, commissions and fees
hereunder.
(e) Unless the Agent shall have received notice from the Account
Party prior to the date on which any payment is due to the Issuing Bank or
the Participating Banks hereunder that the Account Party will not make such
payment in full, the Agent may assume that the Account Party has made such
payment in full to the Agent on such date and the Agent may, in reliance
upon such assumption, cause to be distributed to the Issuing Bank and/or
each Participating Bank on such due date an amount equal to the amount then
due the Issuing Bank and/or such Participating Bank. If and to the extent
the Account Party shall not have so made such payment in full to the Agent,
the Issuing Bank and/or each such Participating Bank shall repay to the
Agent forthwith on demand such amount distributed to the Issuing Bank
and/or such Participating Bank, together with interest thereon, for each
day from the date such amount is distributed to the Issuing Bank and/or
such Participating Bank until the date the Issuing Bank and/or such
Participating Bank repays such amount to the Agent, at the Federal Funds
Rate.
(f) If, after the Agent has paid to the Issuing Bank or any
Participating Bank any amount pursuant to subsection (a) above, such
payment is rescinded or must otherwise be returned or must be paid over by
the Agent or the Issuing Bank to any Person, whether pursuant to any
bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such
Participating Bank shall, at the request of the Agent or the Issuing Bank,
promptly repay to the Agent or the Issuing Bank, as the case may be, an
amount equal to its ratable share of such payment, together with any
interest required to be paid by the Agent or the Issuing Bank with respect
to such payment.
SECTION 4.02. Default Interest. Any amounts payable by the
Account Party hereunder that are not paid when due shall (to the fullest
extent permitted by law) bear interest, from the date when due until paid
in full, at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances.
Notwithstanding any other provision herein, if after the date hereof, the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) (i) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of credit
(or participatory interests therein) issued by, commitments or assets of,
deposits with or for the account of, or credit extended by, the Issuing
Bank or any Participating Bank, or (ii) shall impose on the Issuing Bank or
such Participating Bank any other condition affecting this Agreement, the
Letter of Credit or participatory interests therein, and the result of any
of the foregoing shall be (A) to increase the cost to the Issuing Bank or
such Participating Bank of issuing, maintaining or participating in this
Agreement or the Letter of Credit or of agreeing to make, making or
maintaining any Advance or (B) to reduce the amount of any sum received or
receivable by the Issuing Bank or such Participating Bank hereunder
(whether of principal, interest or otherwise), then the Account Party will
pay to the Issuing Bank or such Participating Bank, upon demand, such
additional amount or amounts as will compensate the Issuing Bank or such
Participating Bank for such additional costs incurred or reduction
suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall
have determined that the adoption after the date hereof of any law, rule,
regulation or guideline regarding capital adequacy, or any change therein
or in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Issuing Bank
or any Participating Bank (or any Applicable Lending Office of the Issuing
Bank or such Participating Bank), or any holding company of any such
entity, with any request or directive regarding capital adequacy not in
effect on the date hereof (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect (i) of reducing the rate of return on such entity's capital or on
the capital of such entity's holding company, if any, as a consequence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder or the portion of the Advances
made by such entity pursuant hereto to a level below that which such entity
or such entity's holding company could have achieved, but for such
applicability, adoption, change or compliance (taking into consideration
such entity's policies and the policies of such entity's holding company
with respect to capital adequacy), or (ii) of increasing or otherwise
determining the amount of capital required or expected to be maintained by
such entity or such entity's holding company based upon the existence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder, the portion of the Advances
made by such entity pursuant hereto and other similar such credits,
participations, commitments, agreements or assets, then from time to time
the Account Party shall pay to the Issuing Bank or such Participating Bank,
upon demand, such additional amount or amounts as will compensate such
entity or such entity's holding company for any such reduction or allocable
capital cost suffered.
(c) Notices. A certificate of the Issuing Bank or any Participating Bank
setting forth such entity's claim for compensation hereunder and the amount
necessary to compensate such entity or its holding company pursuant to
subsection (a) or (b) of this Section 4.03 shall be submitted to the
Account Party and the Issuing Bank and shall be conclusive and binding for
all purposes, absent manifest error. The Account Party shall pay the
Issuing Bank or such Participating Bank directly the amount shown as due on
any such certificate within ten days after its receipt of the same. The
failure of any entity to provide such notice or to make demand for payment
under this Section 4.03 shall not constitute a waiver of such Participating
Bank's rights hereunder; provided, that such entity shall not be entitled
to demand payment pursuant to subsections (a) or (b) of this Section 4.03
in respect of any loss, cost, expense, reduction or reserve if such demand
is made more than one year following the later of such entity's incurrence
or sufferance thereof or such entity's actual knowledge of the event giving
rise to such entity's rights pursuant to such subsections. The protections
of this Section 4.03 shall be available to the Issuing Bank and each
Participating Bank regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, guideline or other change
or condition which shall have occurred or been imposed and shall survive
the Termination Date and the payment of all other amounts hereunder.
SECTION 4.04. Sharing of Payments, Etc. If any Participating Bank shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, but excluding any proceeds received by
assignments or sales of participations in accordance with Section 10.06
hereof to a Person that is not an Affiliate of the Account Party) on
account of the Advances owing to it (other than pursuant to Section 4.03
hereof) in excess of its ratable share of payments on account of the
Advances obtained by all the Participating Banks, such Participating Bank
shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account
Party hereunder shall be made in accordance with Section 4.01, free and
clear of and without deduction for all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Participating Bank and the
Issuing Bank, taxes imposed on its overall net income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such
Participating Bank or the Issuing Bank (as the case may be) is organized or
any political subdivision thereof and, in the case of each Participating
Bank, taxes imposed on its overall net income, and franchise taxes imposed
on it, by the jurisdiction of such Participating Bank's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as Taxes ). If the Account Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Participating Bank or the Issuing Bank, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.05) such Participating Bank or the Issuing
Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Account Party shall
make such deductions and (iii) the Account Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement (hereinafter referred to as Other Taxes ).
(c) The Account Party will indemnify each Participating Bank and
the Issuing Bank for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and any Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.05) paid by such
Participating Bank or the Issuing Bank (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within
30 days from the date such Participating Bank or the Issuing Bank (as the
case may be) makes written demand therefor. If any Taxes or Other Taxes
for which a Participating Bank or the Issuing Bank has received payments
from the Account Party hereunder shall be finally determined to have been
incorrectly or illegally asserted and are refunded to such Participating
Bank, such Participating Bank shall promptly forward to the Account Party
any such refunded amount. The Account Party's, the Issuing Bank's and each
Participating Bank's obligations under this Section 4.05 shall survive the
Termination Date and the payment of all other amounts hereunder.
(d) Within 30 days after the date of any payment of Taxes, the
Account Party will furnish to the Issuing Bank, at its address referred to
in Section 10.02 hereof, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States
or a jurisdiction within the United States shall, on or prior to the date
it becomes a Participating Bank hereunder, deliver to the Account Party and
the Issuing Bank such certificates, documents or other evidence, as
required by the Internal Revenue Code of 1986, as amended from time to time
(the Code ), or treasury regulations issued pursuant thereto, including
Internal Revenue Service Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441-1(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly
executed by such Participating Bank establishing that it is (i) not subject
to withholding under the Code or (ii) totally exempt from United States of
America tax under a provision of an applicable tax treaty. Each
Participating Bank shall promptly notify the Account Party and the Issuing
Bank of any change in its Applicable Lending Office and shall deliver to
the Account Party and the Issuing Bank together with such notice such
certificates, documents or other evidence referred to in the immediately
preceding sentence. Unless the Account Party and the Issuing Bank have
received forms or other documents satisfactory to them indicating that
payments hereunder are not subject to United States of America withholding
tax or are subject to such tax at a rate reduced by an applicable tax
treaty, the Account Party or the Issuing Bank shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to
or for any Participating Bank organized under the laws of a jurisdiction
outside the United States of America. Each Participating Bank represents
and warrants that each such form supplied by it to the Issuing Bank and the
Account Party pursuant to this Section 4.05, and not superseded by another
form supplied by it, is or will be, as the case may be, complete and
accurate.
(f) Any Participating Bank claiming any additional amounts payable
pursuant to this Section 4.05 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
requested by the Account Party or to change the jurisdiction of its
Applicable Lending Office if the making of such a filing or change would
avoid the need for or reduce the amount of any such additional amounts
which may thereafter accrue and would not, in the sole determination of
such Participating Bank, be otherwise disadvantageous to such Participating
Bank.
SECTION 4.06. Obligations Absolute. The obligations of the
Account Party under this Agreement shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement
(as the same may be amended from time to time) under all circumstances,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement, the
Second Mortgage or any of the Security Documents or Related Documents or
any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Account Party in
respect of the Letter of Credit or any other amendment or waiver of or any
consent to departure from all or any of the Loan Documents, the Second
Mortgage or the Related Documents or any document or agreement delivered in
connection therewith;
(iii) the existence of any claim, set-off, defense or other right
which the Account Party may have at any time against the Paying Agent, the
Trustee or any other beneficiary, or any transferee, of the Letter of
Credit (or any persons or entities for whom the Paying Agent, the Trustee,
any such beneficiary or any such transferee may be acting), the Agent, the
Issuing Bank, or any other person or entity, whether in connection with
this Agreement, the transactions contemplated in any of the Loan Documents,
the Second Mortgage or the Related Documents, or any unrelated transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, except to the extent that a court of competent jurisdiction shall
determine that the Issuing Bank shall have engaged in gross negligence or
willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of Credit
against presentation of a draft or certificate which does not comply with
the terms of the Letter of Credit, except to the extent that a court of
competent jurisdiction shall determine that the Issuing Bank shall have
engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of any interest
in any collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the obligations of the
Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each
Participating Bank shall maintain, in accordance with their usual practice,
an account or accounts evidencing the indebtedness of the Account Party
resulting from each drawing under the Letter of Credit (in the case of the
Issuing Bank) and from each Advance (in the case of each Participating
Bank) made from time to time hereunder and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action
or proceeding in respect of this Agreement, the entries made in such
account or accounts shall, in the absence of manifest error, be conclusive
evidence of the existence and amounts of the obligations of the Account
Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of
Credit. The obligation of the Issuing Bank to issue the Letter of Credit
and of each Participating Bank to make the Advances to be made by it is
subject to the fulfillment of the conditions precedent that the Agent shall
have received on or before the day of such issuance the following, each
dated such day (except where specified otherwise below), in form and
substance satisfactory to each Participating Bank (except where specified
otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and delivered
by the Account Party, the Agent, the Issuing Bank and each Participating
Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Agreement, duly executed by
the Account Party, the Agent and the Issuing Bank.
(iii) Executed copies (or duplicate copies thereof certified
as of the Closing Date by the Account Party in a manner satisfactory to the
Agent to be a true copy) of the Indenture and the Loan Agreement, duly
executed by the parties thereto.
(iv) Executed copies (or duplicate copies thereof certified as
of the Closing Date by the Account Party in a manner satisfactory to the
Agent to be a true copy) of the Second Mortgage, duly executed by the
parties thereto.
(b) Corporate Matters:
(i) A certificate of the Secretary or an Assistant Secretary of
the Account Party certifying that attached thereto are (A) a true and
correct listing of the documents comprising the Articles of Incorporation
of the Account Party and a true and correct copy of the By-laws of the
Account Party, in each case as in effect on the Closing Date and (B) true
and correct copies of the resolutions of the Board of Directors of the
Account Party approving, if and to the extent necessary, this Agreement,
the other Loan Documents, the Related Documents to which it is a party and
the other documents to be delivered by or on behalf of the Account Party
hereunder and thereunder, and of all documents evidencing other necessary
corporate action, if any, with respect to the execution, delivery and
performance by or on behalf of the Account Party of this Agreement, the
other Loan Documents and such Related Documents and certifying that such
resolutions and other corporate actions, if any, are in full force and
effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary or an Assistant Secretary of
the Account Party certifying the names and true signatures of the officers
of the Account Party authorized to sign this Agreement, the other Loan
Documents, the Related Documents to which it is a party and the other
documents to be delivered hereunder and thereunder.
(c) Governmental Approvals:
(i) A certificate of a duly authorized officer of the Account
Party certifying that attached thereto are true and correct copies of all
Governmental Approvals referred to in clause (i) of the definition of
Governmental Approval required to be obtained or made by the Account
Party.
(d) Financial, Accounting and Compliance Matters:
(i) A certificate signed by the Treasurer or Assistant Treasurer
of the Account Party, certifying as to the absence of any material adverse
change in the financial condition, operations, properties or prospects of
the Account Party since December 31, 1992, except to the extent, if any,
described in the Account Party's Quarterly Reports on Form 10-Q for the
periods ended March 31 and/or June 30, 1993 or in the Account Party's
Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or
September 10, 1993.
(ii) A certificate of a duly authorized officer of the Account
Party to the effect that:
(A) the representations and warranties contained in Section
6.01 are correct in all material respects on and as of the Closing Date
before and after giving effect to the issuance of the Letter of Credit; and
(B) no event has occurred and is continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit.
(e) Relating to the Issuance of the Bonds:
(i) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true copy)
of the Remarketing Agreement, duly executed by the Issuer, the Remarketing
Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true copy)
of the Purchase Contract, duly executed by Goldman, Sachs & Co.,
Individually and as Representative of Advest, Inc., Greenwich Partners,
Inc. and U.S. Securities, Inc., the Issuer and the Account Party.
(iii) A letter from Whitman & Ransom, counsel to the Issuer,
addressed to the Agent, the Issuing Bank and the Participating Banks and
stating therein that the Agent, the Issuing Bank and the Participating
Banks may rely on the opinion of such firm in the form of Appendix C to the
Official Statement relating to the Bonds and delivered pursuant to Section
14(i)(2)(F) of the Purchase Contract, together with copies of such opinion.
(iv) Copies of the Preliminary Official Statement and Official
Statement used in connection with the offering and remarketing of the
Bonds, and any amendments, supplements or "stickers" thereto.
(v) Copies of the Issuer Resolution, and, to the extent not
otherwise referenced in this Section 5.01(e), of all other agreements,
documents, certificates and opinions delivered in connection with the
issuance of the Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in
substantially the form of Exhibit 5.01A and as to such other matters as the
Majority Lenders, through the Agent, may reasonably request; and
(ii) King & Spalding, special New York counsel to the Agent and
the Issuing Bank, in substantially the form of Exhibit 5.01B.
(g) Miscellaneous:
(i) Letters from S&P and Moody's to the effect that the Bonds
have been rated A-1+ and VMIG-1, respectively, such letters to be in form
and substance satisfactory to the Issuing Bank.
(ii) Such other approvals, opinions and documents as the Majority
Lenders, through the Issuing Bank, may reasonably request as to the
legality, validity, binding effect or enforceability of the Loan Documents
or the financial condition, properties, operations or prospects of the
Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the
Letter of Credit. The obligation of the Issuing Bank to issue the Letter
of Credit and of each Participating Bank to make the Advances to be made by
it shall be subject to the further conditions precedent that, on the date
of the issuance of the Letter of Credit:
(a) the representations and warranties contained in Section
6.01 shall be correct in all material respects on and as of the Closing
Date before and after giving effect to the issuance of the Letter of
Credit;
(b) no event shall have occurred and be continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit; and
(c) The Account Party shall have paid all fees under or
referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances. The
obligation of each Participating Bank to make any Initial Advance shall be
subject to the conditions precedent that, on the date of such Initial
Advance, the following statements shall be true:
(a) the representations and warranties contained in Section
6.01 of this Agreement (other than the last sentence of subsection (f) and
clause (ii) of subsection (g) thereof) are true and correct on and as of
the date of such Initial Advance, before and after giving effect to such
Initial Advance and to the application of the proceeds (if any) therefrom,
as though made on and as of such date; and
(b) no event has occurred and is continuing which
constitutes an Event of Default.
Unless the Account Party shall have previously advised the Agent in writing
that one or more of the statements contained in subsections (a) and (b) of
this Section 5.03 is no longer true, the Account Party shall be deemed to
have represented and warranted, on and as of the date of any Initial
Advance, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The
obligation of each Participating Bank to make any Term Advance shall be
subject to the conditions precedent that, on the date of such Term Advance
the following statements shall be true:
(a) the representations and warranties contained in Section
6.01 of this Agreement (including the last sentence of subsection (f) and
clause (ii) of subsection (g) thereof) are true and correct on and as of
the date of such Term Advance, before and after giving effect to such Term
Advance and to the application of the proceeds therefrom, as though made
on and as of such date; and
(b) no event has occurred and is continuing which
constitutes an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing
that one or more of the statements contained in subsections (a) and (b) of
this Section 5.04 is no longer true, the Account Party shall be deemed to
have represented and warranted, on and as of the date of any Term Advance,
that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing
Bank and the Participating Banks shall be entitled to rely conclusively
upon the certificates delivered from time to time by officers of the
Account Party, NU and the other parties to the Loan Documents and Related
Documents as to the names, incumbency, authority and signatures of the
respective persons named therein until such time as the Agent may receive a
replacement certificate, in form acceptable to the Agent, from an officer
of such Person identified to the Agent as having authority to deliver such
certificate, setting forth the names and true signatures of the officers
and other representatives of such Person thereafter authorized to act on
behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party. The
Account Party represents and warrants as follows:
(a) Each of the Account Party and its Principal Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has the requisite corporate
power and authority to own its property and assets and to carry on its
business as now conducted and is qualified to do business in every
jurisdiction where, because of the nature of its business or property, such
qualification is required, except where the failure so to qualify would not
have a material adverse effect on the financial condition, properties,
prospects or operations of the Account Party or of the Account Party and
its Principal Subsidiaries taken as a whole. The Account Party has the
corporate power to execute, deliver and perform its obligations under this
Agreement, each other Loan Document and each Related Document to which it
will be a party.
(b) The execution, delivery and performance by the Account Party of
each Loan Document and Related Document to which it is a party are within
the Account Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not contravene (i) the
Account Party's charter or by-laws or any law or legal restriction or (ii)
any contractual restriction binding on or affecting the Account Party or
its properties or any of its Principal Subsidiaries or its properties.
(c) Each of the Account Party and its Principal Subsidiaries is not
in violation of any law, or in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court or governmental agency
or instrumentality, where such violation or default would have a material
adverse effect on the financial condition, properties, prospects or
operations of the Account Party or of the Account Party and its Principal
Subsidiaries taken as a whole.
(d) All Governmental Approvals referred to in clause (i) in the
definition of Governmental Approvals have been duly obtained or made, and
all applicable periods of time for review, rehearing or appeal with respect
thereto have expired, except as described below. If the period for appeal
of the order of the Securities and Exchange Commission approving the
transactions contemplated hereby has not expired, the filing of an appeal
of such order will not affect the validity of said transactions, unless
such order has been otherwise stayed or any of the parties hereto has
actual knowledge that any of such transactions constitutes a violation of
the Public Utility Holding Company Act of 1935 or any rule or regulation
thereunder. No such stay exists and the Account Party has no reason to
believe that any of such transactions constitutes any such violation. If
the period for appeal of the decision of the Connecticut Department of
Public Utility Control (the CDPUC ) approving the transactions
contemplated hereby has not expired, the filing of an appeal of such
decision will not affect the validity of said transactions, unless
operation of such decision has been stayed or suspended by the CDPUC or a
reviewing court prior to the consummation of such transactions. No such
stay or suspension exists. No representation or warranty is made
concerning the applicable period of time for review, rehearing or appeal
with respect to Governmental Approvals of the Issuer in connection with the
issuance of the Bonds. The Account Party and each of its Principal
Subsidiaries have obtained or made all Governmental Approvals referred to
in clause (ii) of the definition of Governmental Approvals , except (i)
those which are not yet required but which are obtainable in the ordinary
course of business as and when required, (ii) those the absence of which
would not materially adversely affect the financial condition, properties,
prospects or operations of the Account Party or any Principal Subsidiary
and (iii) those which the Account Party is diligently attempting in good
faith to obtain, renew or extend, or the requirement for which the Account
Party is contesting in good faith by appropriate proceedings or by other
appropriate means; in each case described in the foregoing clause (iii),
such attempt or contest, and any delay resulting therefrom, is not
reasonably expected to have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary or to magnify to any significant degree any such
material adverse effect that would reasonably be expected to result from
the absence of such Governmental Approval.
(e) This Agreement, each other Loan Document and each Related Document
to which the Account Party is a party have been duly executed and delivered
by or on behalf of the Account Party and are legal, valid and binding
obligations of the Account Party enforceable against the Account Party in
accordance with their respective terms; subject to the qualifications,
however, that the enforcement of the rights and remedies herein and therein
is subject to bankruptcy and other similar laws of general application
affecting rights and remedies of creditors and the application of general
principles of equity (regardless of whether considered in a proceeding in
equity or at law) and that indemnification against violations of securities
and similar laws may be subject to matters of public policy.
(f) (i) The audited balance sheet of the Account Party as at December
31, 1992, and the audited statements of income and cash flows of the
Account Party for the fiscal year then ended as set forth in the Account
Party's Annual Report on Form 10-K for such fiscal year and (ii) the
unaudited balance sheet of the Account Party as at June 30, 1993 and the
unaudited statements of income and cash flows of the Account Party for the
six-month period then ended as set forth in the Account Party's Quarterly
Report on Form 10-Q for the period then ended, fairly present in all
material respects the financial condition and results of operations of the
Account Party at and for the respective periods ended on such dates, and
have been prepared in accordance with generally accepted accounting
principles consistently applied. Since December 31, 1992, there has been
no material adverse change in the financial condition, operations,
properties or prospects of the Account Party and its Subsidiaries, if any,
taken as a whole, except to the extent, if any, described in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
and/or June 30, 1993, or in the Account Party's Current Reports on Form 8-K
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(g) There is no pending or known threatened action or proceeding
(including, without limitation, any action or proceeding relating to any
environmental protection laws or regulations) affecting the Account Party
or its properties, or any of its Principal Subsidiaries or its properties,
before any court, governmental agency or arbitrator (i) which affects or
purports to affect the legality, validity or enforceability of the Loan
Documents or the Related Documents or any of them or (ii) as to which there
is a reasonable possibility of an adverse determination and which, if
adversely determined, would materially adversely affect the financial
condition, properties, prospects or operations of the Account Party and its
Principal Subsidiaries taken as a whole; except, for purposes of clause
(ii) only, such as is described in the Account Party's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
or June 30, 1993, or in the Account Party's Current Reports on Form 8-K,
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(h) No ERISA Plan Termination Event has occurred nor is reasonably
expected to occur with respect to any ERISA Plan which would materially
adversely affect the financial condition, properties, prospects or
operations of the Account Party and its Subsidiaries taken as a whole,
except as disclosed to and consented to in writing by the Majority Lenders.
Since the date of the most recent Schedule B (Actuarial Information) to the
annual report of each such ERISA Plan (Form 5500 Series), there has been no
material adverse change in the funding status of the ERISA Plans referred
to therein, and no prohibited transaction has occurred with respect
thereto that, singly or in the aggregate with all other prohibited
transactions and after giving effect to all likely consequences thereof,
would be reasonably expected to have a material adverse effect on the
financial condition, properties, prospects or operations of the Account
Party and its Subsidiaries taken as a whole. Neither the Account Party nor
any of its ERISA Affiliates has incurred nor reasonably expects to incur
any material withdrawal liability under ERISA to any ERISA Multiemployer
Plan, except as disclosed to all Lenders and consented to in writing by the
Majority Lenders.
(i) The Account Party or one of its Principal Subsidiaries has good
and marketable title (or, in the case of personal property, valid title) or
valid leasehold interests in the electric generating plants of which it is
named as owner in Item 2 of the Account Party's Annual Report on Form
10-K for the fiscal year ended December 31, 1992 under the caption System
Generating Plants , except for minor defects in title that do not interfere
with the ability of the Account Party or any of its Principal Subsidiaries
to conduct its business as now conducted. All such assets and properties
are free and clear of any Lien, other than Liens permitted under Section
7.02(a) hereof.
(j) All outstanding shares of capital stock having ordinary voting
power for the election of directors of the Account Party have been validly
issued, are fully paid and nonassessable and are owned beneficially by NU,
free and clear of any Lien. NU is a holding company (as defined in the
Public Utility Holding Company Act of 1935, as amended).
(k) The Account Party and each of its Principal Subsidiaries has filed
all tax returns (Federal, state and local) required to be filed and paid
taxes shown thereon to be due, including interest and penalties, or, to the
extent the Account Party or any of its Principal Subsidiaries is contesting
in good faith an assertion of liability based on such returns, has provided
adequate reserves in accordance with generally accepted accounting
principles for payment thereof.
(l) No exhibit, schedule, report or other written information provided
by or on behalf of the Account Party or its agents to the Agent, the
Issuing Bank or the Participating Banks in connection with the negotiation,
execution and closing of this Agreement, the other Loan Documents or the
Related Documents knowingly contained when made any material misstatement
of fact or knowingly omitted to state any material fact necessary to make
the statements contained therein not misleading in light of the
circumstances under which they were made.
(m) No proceeds of any Advance will be used in violation of, or in any
manner that would result in a violation by any party hereto of, Regulations
G, T, U or X promulgated by the Board of Governors of the Federal Reserve
System or any successor regulations. The Account Party (A) is not an
investment company within the meaning ascribed to that term in the
Investment Company Act of 1940 and (B) is not engaged in the business of
extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will, unless the Majority Lenders
shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as
specified in Section 3.02 and Section 6.01(m) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall
become delinquent, and cause each of its Principal Subsidiaries to pay and
discharge before the same shall become delinquent, all taxes, assessments
and governmental charges, royalties or levies imposed upon it or upon its
property except to the extent the Account Party or any of its Principal
Subsidiaries is contesting the same in good faith by appropriate
proceedings and has set aside adequate reserves in accordance with
generally accepted accounting principles for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained,
insurance (including appropriate plans of self-insurance) covering the
Account Party, its Principal Subsidiaries and their respective properties,
in effect at all times in such amounts and covering such risks as may be
required by law and in addition as is usually carried by companies engaged
in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Subject at all times to Section
7.02(b) hereof, preserve and maintain, and cause each of its Principal
Subsidiaries to preserve and maintain, its existence, corporate or
otherwise, material rights (statutory and otherwise) and franchises except
for such rights and franchises which do not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any of its Principal Subsidiaries.
(e) Compliance with Laws, Etc.. Comply, and cause each of its
Principal Subsidiaries to comply, in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, including, without limitation, any such laws,
rules, regulations and orders issued by the Securities and Exchange
Commission or relating to zoning, environmental protection, use and
disposal of Hazardous Substances, land use, construction and building
restrictions, ERISA and employee safety and health matters relating to
business operations, except to the extent (i) that the Account Party or any
of its Principal Subsidiaries is contesting the same in good faith by
appropriate proceedings or (ii) that any such non-compliance, and the
enforcement or correction thereof, would not materially adversely affect
the financial condition, properties, prospects or operations of the Account
Party or any of its Principal Subsidiaries.
(f) Inspection Rights. At any time and from time to time upon
reasonable notice, permit the Issuing Bank and its agents and
representatives to examine the records and books of account of, and the
properties of, the Account Party and any of its Principal Subsidiaries.
(g) Keeping of Books. Keep proper records and books of account, in
which full and correct entries shall be made of all financial transactions
of the Account Party and its Principal Subsidiaries and the assets and
business of the Account Party and its Principal Subsidiaries, in accordance
with generally accepted accounting practices consistently applied.
(h) Conduct of Business. Conduct its primary business, and cause each
of its Principal Subsidiaries to conduct its primary business, in
substantially the same manner and in substantially the same fields as such
business is conducted on the Closing Date.
(i) Maintenance of Properties, Etc. (i) As to properties of the type
described in Section 6.01(i) hereof, subject at all times to Section
7.02(b) hereof, maintain, and cause its Principal Subsidiaries to maintain,
title of the quality described therein; and (ii) preserve, maintain,
develop, and operate, and cause its Principal Subsidiaries to preserve,
maintain, develop and operate, in substantial conformity with all laws,
material contractual obligations and prudent practices prevailing in the
industry, all of its properties which are used or useful in the conduct of
its or its Principal Subsidiaries' respective businesses in good working
order and condition, ordinary wear and tear excepted, except to the extent
such non-conformity would not materially adversely affect the financial
condition, properties, prospects or operations of the Account Party or any
of its Principal Subsidiaries; provided, however, that the Account Party or
any Principal Subsidiary will not be prevented from discontinuing the
operation and maintenance of any such properties if such discontinuance is,
in the judgment of the Account Party or such Principal Subsidiary,
desirable in the operation or maintenance of its business and would not
materially adversely affect the financial condition, properties, prospects
or operations of the Account Party or such Principal Subsidiary.
(j) Governmental Approvals. Duly obtain, and cause each of its
Principal Subsidiaries to duly obtain, on or prior to such date as the same
may become legally required, and thereafter maintain in effect at all
times, all Governmental Approvals on its or such Principal Subsidiary's
part to be obtained, except with respect to those Governmental Approvals
referred to in clause (ii) of the definition of Governmental Approvals ,
(i) those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any Principal Subsidiary and (ii) those which the Account Party is
diligently attempting in good faith to obtain, renew or extend, or the
requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; provided, however,
that the exception afforded by clause (ii), above, shall be available only
if and for so long as such attempt or contest, and any delay resulting
therefrom, does not have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary and does not magnify to any significant degree any
such material adverse effect that would reasonably be expected to result
from the absence of such Governmental Approval.
(k) Further Assurances. Promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or that any Participating Bank through the Issuing Bank may
reasonably request in order to fully give effect to the interests and
properties purported to be covered by the Security Documents.
(l) Related Documents. Perform and comply in all material respects
with each of the provisions of each Related Document to which it is a
party.
(m) Ratings. Maintain at all times ratings in respect of the Bonds of
at least two nationally-recognized rating services, at least one of which
shall be S&P or Moody's.
SECTION 7.02. Negative Covenants. So long as any amount shall remain
available to be drawn under the Letter of Credit or any Advance or other
amounts shall remain unpaid hereunder or any Participating Bank shall have
any Commitment, the Account Party will not, without the written consent of
the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien,
security interest, or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any kind, or any other
type of preferential arrangement the intent or effect of which is to assure
a creditor against loss or to prefer one creditor over another creditor
upon or with respect to any of its properties or assets (any of the
foregoing being referred to herein as a Lien ), excluding, however, from
the operation of the foregoing restrictions the Liens created or perfected
under or in connection with the Pledge Agreement, and the following,
whether now existing or hereafter created or perfected:
(i) Liens created by (A) the Indenture of Mortgage and Deed of
Trust dated as of May 1, 1921, from the Account Party to Bankers Trust
Company, as Trustee, as amended and supplemented (the CL&P Indenture ), or
(B) the First Mortgage Indenture and Deed of Trust dated as of January 1,
1958, from the Hartford Electric Light Company ( HELCO ) to the First
National Bank of Boston, as Successor Trustee, as amended and supplemented
(the HELCO Indenture );
(ii) Liens on the Account Party's interest in the Millstone Unit
No. 1, Millstone Unit No. 2 or Millstone Unit No. 3 nuclear generating
units in Waterford, Connecticut, or nuclear fuel for any or all nuclear
units in which the Account Party has an interest (including, without
limitation, Millstone Unit No. 1, Millstone Unit No.2 and Millstone Unit
No. 3);
(iii) Permitted Liens or Permitted Encumbrances under the CL&P
Indenture or the HELCO Indenture;
(iv) any Lien on assets of any of its Subsidiaries created or
assumed to secure Debt owing by any of its Subsidiaries to the Account
Party or to any wholly-owned Subsidiary of the Account Party;
(v) any purchase money Lien or construction mortgage on assets
hereafter acquired or constructed by the Account Party or any of its
Subsidiaries and any Lien on any assets existing at the time of acquisition
thereof by the Account Party or any of its Subsidiaries, or created within
180 days from the date of completion of such acquisition or construction;
provided that such Lien shall at all times be confined solely to the assets
so acquired or constructed and any additions thereto;
(vi) any existing Liens on assets now owned by the Account Party
or any of its Subsidiaries; Liens on assets or stock of any class of, or
any partnership or joint venture interest in, any of its Subsidiaries
existing at the time it becomes a Subsidiary of the Account Party, and
liens existing on assets of a corporation or other going concern when it is
merged into or with the Account Party or a Subsidiary of the Account Party,
or when substantially all of its assets are acquired by the Account Party
or a Subsidiary of the Account Party; provided that such Liens shall at all
times be confined solely to such assets, or if such assets constitute a
utility system, additions to or substitutions for such assets;
(vii) Liens resulting from legal proceedings being contested in
good faith by appropriate legal or administrative proceedings by the
Account Party or any of its Subsidiaries, and as to which the Account Party
or any of its Subsidiaries, as the case may be, to the extent required by
generally accepted accounting principles applied on a consistent basis,
shall have set aside on its books adequate reserves;
(viii) Liens created in favor of the other contracting party in
connection with advance or progress payments;
(ix) any Liens in favor of any state of the United States or any
political subdivision of any such state, or any agency of any such state or
political subdivisions, or trustee acting on behalf of holders of
obligations issued by any of the foregoing or any financial institutions
lending to or purchasing obligations of any of the foregoing, which Lien is
created or assumed for the purpose of financing all or part of the cost of
acquiring or constructing the property subject thereto;
(x) Liens resulting from conditional sale agreements, capital
leases or other title retention agreements;
(xi) Liens on property of the Account Party or any of its
Subsidiaries related to the financing of pollution control facilities;
(xii) Liens on accounts receivable and power contracts resulting
from financing transactions;
(xiii) any other Liens incurred in the ordinary course of business
otherwise than to secure Debt; and
(xiv) any extension, renewal or replacement of Liens permitted by
clauses (i) through (vi) and (viii) through (xiii); provided, however, that
the principal amount of Debt secured thereby shall not, at the time of such
extension, renewal or replacement, exceed the principal amount of Debt so
secured and that such extension, renewal or replacement shall be limited to
all or a part of the property which secured the Lien so extended, renewed
or replaced;
(b) Mergers, and Sales of Assets, Etc. Merge with or into or
consolidate with or into, any Person, or permit any of its Subsidiaries to
be a party to, any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or stock of any class of, or
any partnership or joint venture interest in, any other Person or entity,
or sell, transfer, convey or lease all or any substantial part of its
assets (other than sales, transfers or conveyances of receivables and power
contracts), except for, and then only after receipt of all necessary
corporate and governmental or regulatory approvals and provided, that,
before and after giving effect to any such merger, consolidation, purchase,
acquisition, sale, transfer, conveyance or lease, no Event of Default or
Unmatured Default shall have occurred and be continuing:
(i) any such merger or consolidation, sale, transfer, conveyance,
lease or assignment of or by any wholly-owned Subsidiary of the Account
Party into the Account Party or into, with or to any other wholly-owned
Subsidiary of the Account Party and any such purchase or other acquisition
by the Account Party or any wholly- owned Subsidiary of the Account Party
of the assets or stock of any wholly- owned Subsidiary of the Account
Party;
(ii) any such sale of assets (other than stock) which comprise all
or any part of its interest in a nuclear power generating plant (whether
completed or under construction);
(iii) any such merger or consolidation of the Account Party with
or into another wholly- owned Subsidiary of NU and/or a Regulatory
Transaction Entity and/or an entity owning a cogeneration or independent
power project, pursuant to step- in or similar rights granted pursuant to
a pre-existing power purchase contract, if (but only if): (A) the successor
or surviving corporation, if not the Account Party, shall have assumed or
succeeded to all of the liabilities of the Account Party (including the
liabilities of the Account Party under this Agreement), and (B) the Agent
shall have received the favorable written opinion of counsel to the Account
Party, in form and substance satisfactory to the Agent and the Majority
Lenders, to the effect of the foregoing subclause (A); provided, however,
in the event of a merger or consolidation with a Regulatory Transaction
Entity, if the purchase price plus the amount of any liabilities assumed in
connection with such merger or consolidation exceeds $100,000,000, the
Account Party shall deliver to the Agent with sufficient copies for each
Participating Bank 30 days prior to such merger or consolidation, a
certificate of a duly authorized officer of the Account Party demonstrating
projected compliance with the ratio set forth in Section 7.02(d) hereof for
and as of each of the three consecutive fiscal quarters immediately
succeeding such merger or consolidation and certifying that such
projections were prepared in good faith and on reasonable assumptions;
(iv) any purchase or acquisition of all or substantially all of
the assets of or stock of any class of, or any partnership or joint venture
interest in (and any assumption of the related liabilities) (A) an entity
owning a cogeneration or independent power project, pursuant to step-in
or similar rights granted pursuant to a pre- existing power purchase
contract; (B) a Regulatory Transaction Entity; or (C) any other Person if
the purchase price of such acquisition plus the amount of any liabilities
assumed by the Account Party in connection therewith does not exceed
$50,000,000 in the aggregate; provided, however, in the event of a purchase
or acquisition of a Regulatory Transaction Entity, if the purchase price
plus the amount of any liabilities assumed in connection with such purchase
or acquisition exceeds in the aggregate $100,000,000, the Account Party
shall deliver to the Agent with sufficient copies for each Participating
Bank 30 days prior to such purchase or acquisition, a certificate of a duly
authorized officer of the Account Party demonstrating projected compliance
with the ratio set forth in Section 7.02(d) hereof for and as of each of
the three consecutive fiscal quarters immediately succeeding such purchase
or acquisition and certifying that such projections were prepared in good
faith and on reasonable assumptions; or
(v) any purchase or acquisition of a joint venture interest in
a generating and/or transmission facility or in a mutual insurance company
providing nuclear liability or nuclear property or replacement power
insurance.
(c) Compliance with ERISA. (i) Terminate, or permit any ERISA
Affiliate to terminate, any ERISA Plan so as to result in any liability of
the Account Party or any Principal Subsidiary to the PBGC in an amount
greater than $1,000,000, or (ii) permit to exist any occurrence of any
Reportable Event (as defined in Title IV of ERISA) which, alone or together
with any other Reportable Event with respect to the same or another ERISA
Plan, has a reasonable possibility of resulting in liability of the Account
Party or any Subsidiary to the PBGC in an aggregate amount exceeding
$1,000,000, or any other event or condition, which presents a material risk
of such a termination by the PBGC of any ERISA Plan or has a reasonable
possibility of resulting in a liability of the Account Party or any
Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000.
(d) Common Equity Ratio. Permit the ratio (expressed as a
percentage) of Consolidated Common Equity to Consolidated Capitalization to
be less than 30% for any three consecutive fiscal quarters.
SECTION 7.03. Reporting Obligations. So long as any amount
shall remain available to be drawn under the Letter of Credit or any
Advance or other amounts shall remain unpaid hereunder or any Participating
Bank shall have any Commitment, the Account Party will, unless the Majority
Lenders shall otherwise consent in writing, furnish to the Agent in
sufficient copies for the Issuing Bank and each Participating Bank, the
following:
(i) as soon as possible and in any event within ten days after the
occurrence of each Event of Default or Unmatured Default continuing on the
date of such statement, a statement of the Chief
Financial Officer, Treasurer or Assistant Treasurer of the Account Party
setting forth details of such Event of Default or Unmatured Default and the
action which the Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Account Party, a copy of the Account Party's Quarterly Report on Form 10-Q,
if any, submitted to the Securities and Exchange Commission with respect to
such quarter, containing financial statements in reasonable detail and duly
certified (subject to year-end audit adjustments) by the Chief Financial
Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party
as having been prepared in accordance with the system of management
financial reports of the Account Party applied on a basis consistent with
the financial statements referred to in Section 6.01(f) hereof and
accompanied by a certificate of a duly authorized officer of the Account
Party (X) stating that no Event of Default or Unmatured Default has
occurred and is continuing or, if an Event of Default or Unmatured Default
has occurred and is continuing, describing the nature thereof and the
action which the Account Party proposes to take with respect thereto and
(Y) demonstrating compliance with Section 7.02(d) hereof for and as of the
end of such fiscal quarter, such demonstration to be in a schedule (in form
satisfactory to the Agent) which sets forth the computations used in
determining such compliance;
(iii) as soon as available and in any event within 105 days after the
end of each fiscal year of the Account Party, a copy of the Account Party's
Annual Report on Form 10-K submitted to the Securities and Exchange
Commission with respect to such year, containing financial statements
certified by a nationally-recognized independent public accountant and to
be accompanied by a certificate of the Chief Financial Officer, Treasurer,
Assistant Treasurer or Comptroller of the Account Party (X) stating that no
Event of Default or Unmatured Default has occurred and is continuing, or if
an Event of Default or Unmatured Default has occurred and is continuing,
describing the nature thereof and the action which the Account Party
proposes to take with respect thereto and (Y) demonstrating compliance with
Section 7.02(d) hereof for and as of the end of such fiscal year, such
demonstration to be in a schedule (in form satisfactory to the Agent) which
sets forth the computations used in determining such compliance;
(iv) as soon as possible and in any event (A) within 30 days
after the Chief Financial Officer, Treasurer or any Assistant Treasurer of
the Account Party knows or has reason to know that any ERISA Plan
Termination Event described in clause (i) of the definition of ERISA Plan
Termination Event with respect to any ERISA Plan or ERISA Multiemployer
Plan has occurred and (B) within 10 days after the Account Party knows or
has reason to know that any other ERISA Plan Termination Event with respect
to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of
the Chief Financial Officer, Treasurer or Assistant Treasurer of the
Account Party describing such ERISA Plan Termination Event and the action,
if any, which the Account Party proposes to take with respect thereto;
(v) promptly after receipt thereof by the Account Party or any of its
ERISA Affiliates from the PBGC, copies of each notice received by the
Account Party or any such ERISA Affiliate of the PBGC's intention to
terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee
appointed to administer any ERISA Plan or ERISA Multiemployer Plan;
(vi) promptly after receipt thereof by the Account Party or any of
its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of
each notice received by the Account Party or any of its ERISA Affiliates
concerning the imposition or amount of withdrawal liability in an aggregate
principal amount of at least $1,000,000 pursuant to Section 4202 of ERISA
in respect of which the Account Party may be liable;
(vii) promptly after the Account Party or any Subsidiary
becomes aware of the commencement thereof, notice of all actions, suits,
proceedings or other events of the type described in Section 6.01(g)
hereof;
(viii) promptly after the filing thereof, copies of each
prospectus (excluding any prospectus contained in any Form S-8) and Current
Report on Form 8-K, if any, which the Account Party or any Principal
Subsidiary files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor;
(ix) promptly after receipt thereof, any assertion of the character
described in Section 8.01(h) hereof and the action the Account Party
proposes to take with respect thereto; and
(x) promptly after requested, such other information
respecting the financial condition, operations, properties, prospects or
otherwise, of the Account Party or its Subsidiaries as the Agent on behalf
of the Majority Lenders may from time to time reasonably request in
writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall
each constitute an Event of Default if the same shall occur and be
continuing after the grace period and notice requirement (if any)
applicable thereto:
(a) The Account Party shall fail to pay any interest on any
Advance or pursuant to Section 4.02 hereof within two days after the same
becomes due; or the Account Party shall fail to reimburse the Issuing Bank
for any Interest Drawing (as defined in the Letter of Credit) within two
days after such reimbursement becomes due; or the Account Party shall fail
to pay any fees or commissions hereunder within five days after the same
becomes due; or the Account Party shall fail to make any other payment
required to be made pursuant to Article II or Article III hereof when due;
or
(b) Any representation or warranty made by the Account Party (or
any of its officers or agents) in this Agreement, the Pledge Agreement or
the Purchase Contract, or in any certificate or other writing delivered
pursuant to this Agreement or the Purchase Contract, shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any
term or covenant on its part to be performed or observed contained in
Sections 7.01(d), Section 7.02(b) or (d), or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other
term or covenant on its part to be performed or observed contained in this
Agreement or the Pledge Agreement and any such failure shall remain
unremedied, after the earlier of written notice having been given to the
Account Party by the Agent, the Issuing Bank or any Participating Bank, and
actual knowledge thereof by the Account Party, for a period of 30 days; or
(e) The Account Party or any Principal Subsidiary shall fail to
pay any of its Debt when due (including any interest or premium thereon but
excluding Debt arising hereunder and excluding other Debt aggregating in no
event more than $10,000,000 in principal amount at any one time) whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise,
and such failure shall continue after the applicable grace period, if any,
specified in any agreement or instrument relating to such Debt; or any
other default under any agreement or instrument relating to any such Debt,
or any other event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment or as a result of the Account
Party's or such Principal Subsidiary's exercise of a prepayment option)
prior to the stated maturity thereof; or
(f) The Account Party or any Principal Subsidiary shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make an
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Account Party or such Principal Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of its debts under any law relating to bankruptcy, insolvency,
or reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property and, in the
case of a proceeding instituted against the Account Party or such Principal
Subsidiary, either the Account Party or such Principal Subsidiary shall
consent thereto or such proceeding shall remain undismissed or unstayed for
a period of 90 days or any of the actions sought in such proceeding
(including without limitation the entry of an order for relief against the
Account Party or such Principal Subsidiary or the appointment of a
receiver, trustee, custodian or other similar official for the Account
Party or such Principal Subsidiary or any of its property) shall occur; or
the Account Party or such Principal Subsidiary shall take any corporate or
other action to authorize any of the actions set forth above in this
subsection (f); or
(g) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Account Party or its properties,
or any Principal Subsidiary or its properties, and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order and shall not have been stayed or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) Any material provision of any Loan Document or any Related
Document shall for any reason other than the express terms thereof or the
exercise of any right or option expressly contained therein cease to be
valid and binding on the Account Party, or shall be determined to be
invalid or unenforceable by any court, governmental agency or authority
having jurisdiction over the Account Party, or the Account Party shall deny
that it has any further liability or obligation under this Agreement or any
Related Document, or any party to a Related Document shall so assert in
writing; provided, that in the case of any party other than the Account
Party making such assertion in respect of any Related Document, such
assertion shall not in and of itself constitute an Event of Default
hereunder until (i) such asserting party shall cease to perform under and
in compliance with such Related Document, (ii) the Account Party shall fail
to diligently prosecute, by appropriate action or proceedings, a rescission
of such assertion or a binding determination as to the merits thereof or
(iii) such a binding determination shall have been made in favor of such
asserting party's position; or
(i) The Security Documents shall for any reason, except to the
extent permitted by the terms thereof, fail or cease to create valid and
perfected Liens (to the extent purported to be granted by such documents
and subject to the exceptions permitted thereunder) in any of the
Collateral (other than Liens in favor of the Trustee with respect to the
interests of the Issuer under the Indenture Documents), provided, that such
failure or cessation relating to any non-material portion of such
Collateral shall not constitute an Event of Default hereunder unless the
same shall not have been corrected within 30 days after the Account Party
becomes aware thereof; or
(j) NU shall cease to own 100% of the issued and outstanding
shares of the capital stock of the Account Party having ordinary voting
power for the election of directors, free and clear of any Liens; or
(k) An event of default (as defined therein) shall have occurred
and be continuing under the Indenture Documents.
SECTION 8.02. Remedies Upon Events of Default. Upon the
occurrence and during the continuance of any Event of Default, then, and in
any such event, the Agent with the concurrence of the Issuing Bank and the
Majority Lenders may, and upon the direction of the Issuing Bank and the
Majority Lenders the Agent shall (i) if the Letter of Credit shall not have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) by notice to the Account Party declare its commitment to issue the
Letter of Credit to be terminated, whereupon the same shall forthwith
terminate, (ii) if the Letter of Credit shall have been issued, instruct
the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the
Trustee and the Paying Agent, at their respective corporate trust offices
as provided in the Indenture Documents, written notice of such Event of
Default in accordance with Section 8.1(A)(4)(1) of the Indenture and of the
Issuing Bank's determination to terminate the Letter of Credit on the fifth
business day (as defined in the Indenture) following the Trustee's and
Paying Agent's receipt of such written notice, (iii) if the Letter of
Credit shall have been issued, instruct the Issuing Bank to (whereupon the
Issuing Bank shall) furnish to the Trustee and the Paying Agent written
notice that the Interest Component will not be reinstated in the amount of
one or more Interest Drawings, all as provided in the Letter of Credit;
(iv) declare the Advances and all other principal amounts outstanding
hereunder, all interest thereon and all other amounts payable hereunder to
be forthwith due and payable, whereupon the Advances and all other
principal amounts outstanding hereunder, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Account Party, and (v) instruct the
Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights
and remedies provided herein and under and in respect of the Security
Documents; provided, however, that in the event of the occurrence of any
Event of Default described in Section 8.01(f) with respect to the Account
Party, (A) the commitment of the Issuing Bank to issue the Letter of Credit
and the Commitments and the obligations of the Participating Banks to make
Advances shall automatically be terminated, and (B) the Advances and all
other principal amounts outstanding hereunder, all interest accrued and
unpaid thereon and all other amounts payable hereunder shall automatically
become due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Account Party.
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS AND THE ISSUING BANKX
SECTION 9.01. Authorization of Agent; Actions of Agent and
Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint
and authorize the Agent to take such action as agent on their behalf and to
exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; provided, however, that neither the Agent nor the Issuing Bank
shall be required to take any action which exposes the Agent or the Issuing
Bank to personal liability or which is contrary to this Agreement or
applicable law. As to any matters not expressly provided for by any
Related Document (including, without limitation, enforcement or collection
thereof), neither the Agent nor the Issuing Bank shall be required to
exercise any discretion or take any action. The Agent agrees to deliver
promptly (i) to the Issuing Bank and each Participating Bank copies of each
notice delivered to it by the Account Party and (ii) to each Participating
Bank copies of each notice delivered to it by the Issuing Bank, in each
case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing
Bank, nor any of their directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or
in connection with this Agreement or any Related Document, except for its
or their own gross negligence or willful misconduct as determined by a
court of competent jurisdiction. Without limitation of the generality of
the foregoing, each of the Agent and the Issuing Bank (i) may consult with
legal counsel (including counsel for the Account Party), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (ii) makes no
warranty or representation to any Participating Bank and shall not be
responsible to any Participating Bank for any statements, warranties or
representations made in or in connection with this Agreement or any Related
Document; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions
of this Agreement or any Related Document on the part of the Account Party
to be performed or observed, or to inspect any property (including the
books and records) of the Account Party; (iv) shall not be responsible to
any Participating Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
Related Document or any other instrument or document furnished pursuant
hereto and thereto; and (v) shall incur no liability under or in respect of
this Agreement or any Related Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, cable
or telex), including, without limitation, any thereof from time to time
purporting to be from the Trustee, believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 9.03. The Agent, the Issuing Bank and Affiliates. The
Agent and the Issuing Bank shall have the same rights and powers under this
Agreement as any other Participating Bank and may exercise (or omit from
exercising) the same as though they were not the Agent and the Issuing
Bank, respectively, and the term Participating Bank shall, unless
otherwise expressly indicated, include UBS in its individual capacity. The
Agent, the Issuing Bank and their respective Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Account Party, any of its
subsidiaries and any Person who may do business with or own securities of
the Account Party or any such subsidiary, all as if UBS was not the Agent
or the Issuing Bank, and without any duty to account therefor to the
Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the
Issuing Bank and each Participating Bank acknowledges that it has,
independently and without reliance upon the Agent, the Issuing Bank or any
other Participating Bank and based on the financial information referred to
in Section 6.01(f) hereof and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each of the Issuing Bank and each Participating Bank
also acknowledges that it will, independently and without reliance upon the
Agent, the Issuing Bank or any other Participating Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 9.05. Indemnification. The Participating Banks agree to
indemnify the Agent and the Issuing Bank (to the extent not reimbursed by
the Account Party), ratably according to their respective Participation
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent or the Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted
by the Agent or the Issuing Bank under this Agreement, provided that no
Participating Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or the Issuing Bank's
gross negligence or willful misconduct. Without limitation of the
foregoing, each Participating Bank agrees to reimburse the Agent and the
Issuing Bank promptly upon demand for its ratable share of any amounts for
which the Agent and the Issuing Bank are entitled to reimbursement or
indemnity pursuant to Section 10.04 hereof but are not reimbursed by the
Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Issuing Bank, the Participating
Banks and the Account Party, with any such resignation to become effective
only upon the appointment of a successor Agent pursuant to this Section
9.06. Upon any such resignation, the Issuing Bank shall have the right to
appoint a successor Agent, which shall be another commercial bank or trust
company reasonably acceptable to the Account Party, organized or licensed
under the laws of the United States, or of any State thereof. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and
the execution and delivery by the Account Party and the successor Agent of
an agreement relating to the fees, if any, to be paid to the successor
Agent in connection with its acting as Agent hereunder, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions
of this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the
Issuing Bank pursuant to this Agreement or any Related Document (other than
the Letter of Credit) shall be promptly delivered to the Agent for
distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision
or consent to the amendment or waiver of any Related Document without the
written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any
amount pursuant to the terms of any Related Document (other than pursuant
to the terms of this Agreement), the Issuing Bank shall promptly deliver to
the Agent such amount.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Article
V, (b) increase the Commitments of the Participating Banks that may be
maintained hereunder or subject the Participating Banks to any additional
obligations, (c) reduce the principal of, or interest on, the Advances, any
amount reimbursable on demand pursuant to Section 3.01, or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances, such reimbursable
amounts or any fees or other amounts payable hereunder (other than fees
payable to the Issuing Bank or the Agent pursuant to Section 2.03(b)
hereof), (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Participating
Banks which shall be required for the Participating Banks or any of them to
take any action hereunder, (f) amend this Agreement or the Pledge Agreement
in a manner intended to prefer one or more Participating Banks over any
other Participating Banks, (g) amend this Section 10.01, or (h) release any
of the Collateral otherwise than in accordance with any provisions for such
release contained in the Security Documents, or change any provision of any
Security Document providing for the release of all or substantially all of
the Collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank or the Agent in
addition to the Participating Banks required above to take such action,
affect the rights or duties of the Issuing Bank or the Agent, as the case
may be, under this Agreement or the Pledge Agreement.
SECTION 10.02. Notices, Etc. All notices and other
communications provided for hereunder and under the other Loan Documents
shall be in writing (including telegraphic, telex, telecopy or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered:
(i) if to the Account Party, to it in care of
Northeast Utilities Service Company at 107 Selden Street, Berlin,
Connecticut 06037 (telecopy: (203) 665-5457), Attention: Assistant
Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its
address at 299 Park Avenue, New York, New York 10171-0026 Attention: Loan
Servicing Department, James Brodus (telephone: (212) 715-3227, telecopy:
(212) 715-3891), with a copy to Christopher W. Criswell, (telephone: (212)
715-3317, telecopy: (212) 715- 3878);
(iii) if to any Participating Bank, to it at its
address set forth on the signature pages hereof or in the Participation
Assignment pursuant to which it became a Participating Bank; or as to each
party other than any Participating Bank, at such other address as shall be
designated by such party in a written notice to the other parties, and, as
to any Participating Bank, at such other address as shall be designated by
such Participating Bank in a written notice to the Account Party and the
Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied or cabled, be effective five days after
when deposited in the mails, or when delivered to the telegraph company,
confirmed by telex answerback, telecopied or delivered to the cable
company, respectively, except that notices and communications to the Agent
or the Issuing Bank pursuant to Article II, III or IV shall not be
effective until received by the Agent or the Issuing Bank, as the case may
be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of
any Participating Bank or the Issuing Bank to exercise, and no delay in
exercising, any right hereunder or under any Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The
Account Party agrees to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses
including, in the case of clause (ii) below, the reasonable allocated cost
of internal counsel), of (i) the Agent and the Issuing Bank in connection
with the preparation, negotiation, execution and delivery of the Loan
Documents and the administration of the Loan Documents, the care and
custody of any and all collateral, and any proposed modification,
amendment, or consent relating thereto; and (ii) the Agent, the Issuing
Bank and each Participating Bank in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Second Mortgage or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the
Agent, the Issuing Bank and each Participating Bank and their respective
officers, directors, employees, professional advisors and affiliates (each,
an Indemnified Person ) harmless from and against any and all claims,
damages, losses, liabilities, costs or expenses (including reasonable
attorney's fees and expenses, whether or not such Indemnified Person is
named as a party to any proceeding or investigation or is otherwise
subjected to judicial or legal process arising from any such proceeding or
investigation) which any of them may incur or which may be claimed against
any of them by any person or entity (except to the extent such claims,
damages, losses, liabilities, costs or expenses arise from the gross
negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution,
delivery or performance of any of the Loan Documents, the Second Mortgage
or the Related Documents or any transaction contemplated thereby, or the
use by the Account Party of the proceeds of any Advance or the use by the
Paying Agent or the Trustee of the proceeds of any drawing under the Letter
of Credit;
(ii) in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation, release or
ownership of any Hazardous Substance (A) at, upon or under any property of
the Account Party or any of its Affiliates or (B) by or on behalf of the
Account Party or any of its Affiliates at any time and in any place;
(iii) in connection with any documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of any of the Loan Documents or the Second Mortgage;
(iv) by reason of or in connection with the execution
and delivery or transfer of, or payment or failure to make payment under,
the Letter of Credit; provided, however, that the Account Party shall not
be required to indemnify the Agent, the Issuing Bank or any Participating
Bank pursuant to this Section for any claims, damages, losses, liabilities,
costs or expenses to the extent caused by (A) the Issuing Bank's willful
misconduct or gross negligence, as determined by a court of competent
jurisdiction, in determining whether documents presented under the Letter
of Credit are genuine or comply with the terms of the Letter of Credit or
(B) the Issuing Bank's willful or grossly negligent failure, as determined
by a court of competent jurisdiction, to make lawful payment under the
Letter of Credit after the presentation to it by the Paying Agent of a
draft and certificate strictly complying with the terms and conditions of
the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in
any material respect, or any untrue statement or alleged untrue statement
of any material fact, contained in any Preliminary Official Statement or
Official Statement relating to the Bonds or any amendment or supplement
thereto, except to the extent contained in or arising from information in
any Preliminary Official Statement or Official Statement relating to the
Bonds supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit
the Account Party's obligations set forth in Articles II, III and IV. The
Account Party's obligations under this Section 10.04 shall survive the
creation and sale of any participation interest pursuant to Section 10.06
hereof and shall survive as well the repayment of all amounts owing to the
Agent, the Issuing Bank and the Participating Banks under the Loan
Documents and the termination of the Commitments. If and to the extent
that the obligations of the Account Party under this Section 10.04 are
unenforceable for any reason, the Account Party agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible
under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the taking of
any action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations hereunder,
and that the obligations of the Issuing Bank and of the several
Participating Banks hereunder are several and not joint. Nothing contained
herein shall constitute a relinquishment or waiver of the Account Party's
rights to any independent claim that the Account Party may have against the
Issuing Bank or any Participating Bank, but no Participating Bank shall be
liable for the conduct of the Issuing Bank or any other Participating Bank,
and the Issuing Bank shall not be liable for the conduct of any
Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants.
(a) This Agreement shall become effective when it shall have been executed
and delivered by the Account Party, the Agent, the Issuing Bank and each
Participating Bank named on the signature pages hereto and thereafter shall
be binding upon and inure to the benefit of the Account Party, the Agent,
the Issuing Bank and each Participating Bank and their respective
successors and assigns, except that the Account Party shall not have the
right to assign its rights hereunder or any interest herein nor transfer
any of its obligations without the prior written consent of the Issuing
Bank and each Participating Bank, and the Issuing Bank may not assign its
commitment to issue the Letter of Credit or its obligations under or in
respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its
rights and transfer its obligations under this Agreement, under the Letter
of Credit or in any security hereunder, including, without limitation, any
instruments securing the Account Party's obligations hereunder; provided
that (i) no assignment by any Participating Bank may be made to any Person,
except with the prior written consent of (A) the Account Party (which
consent shall not be unreasonably withheld and, in the case of an
assignment to another Participating Bank or to an Affiliate of a
Participating Bank, shall not be required) and (B) the Issuing Bank, (ii)
any assignment shall be of a constant and not a varying percentage of all
of the assignor's rights and obligations hereunder and (iii) the parties to
each such assignment shall execute and deliver to the Agent a Participation
Assignment, together with a processing fee of $3,000. Upon receipt of a
completed Participation Assignment and the processing fee, the Agent will
record in a register maintained for such purpose the name of the assignee
and the percentage participation interest assigned by the assignor and
assumed by the assignee for purposes of the determination of such
assignor's and assignee's respective Participation Percentages. Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in each Participation Assignment, which effective date shall
be at least five Business Days after the execution thereof, the assignee
shall, to the extent of such assignment, become a party hereto and have all
of the rights and obligations of a Participating Bank hereunder and, to
the extent of such assignment, such assigning Participating Bank shall be
released from its obligations hereunder (without relieving such
Participating Bank from any liability for damages, costs and expenses
suffered by the Issuing Bank or the Account Party as a result of the
failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one or
more Persons in all or any part of, or any interest (undivided or divided)
in, such Participating Bank's rights and obligations under this Agreement
(any such Person being referred to hereinafter as a Participant and such
interests are collectively, referred to hereinafter as the Rights );
provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to
the contrary, the Issuing Bank and any Participating Bank may assign and
pledge all or any portion of the Advances (or participating interests
therein) owing to the Issuing Bank or such Participating Bank to any
Federal Reserve Bank (and its transferees) as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve System and
any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the Issuing Bank or such Participating Bank from
its obligations hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No
term, provision or requirement, whether express or implied, of any Loan
Document, or actions taken or to be taken by any party thereunder, shall be
construed to create a partnership, association, or joint venture between
such parties or any of them. No term or provision of the Loan Documents
shall be construed to confer a benefit upon, or grant a right or privilege
to, any Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent,
the Issuing Bank and the Participating Banks on the one hand, and the
Account Party on the other, the Account Party assumes all risks of the acts
or omissions of the Paying Agent, the Trustee and any other beneficiary or
transferee of the Letter of Credit with respect to its use of the Letter of
Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor
any of their respective officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or
any acts or omissions of the Paying Agent, the Trustee and any other
beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Issuing Bank against
presentation of documents which do not comply with the terms of the Letter
of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except that the Account Party shall have a claim against the Issuing Bank,
and the Issuing Bank shall be liable to the Account Party, to the extent of
any direct, as opposed to consequential, damages suffered by the Account
Party which the Account Party proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence, as determined by a court of
competent jurisdiction, in determining whether documents presented under
the Letter of Credit are genuine or comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as
determined by a court of competent jurisdiction, to make lawful payment
under the Letter of Credit after the presentation to it by the Paying Agent
of a draft and certificate strictly complying with the terms and conditions
of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Issuing Bank may accept original or facsimile (including
telecopy) sight drafts and accompanying certificates presented under the
Letter of Credit that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 10.09. Confidentiality. In connection with the
negotiation and administration of this Agreement and the other Loan
Documents, the Account Party has furnished and will from time to time
furnish to the Agent, the Issuing Bank and the Participating Banks (each, a
Recipient ) written information which is identified to the Recipient when
delivered as confidential (such information, other than any such
information which (i) was publicly available, or otherwise known to the
Recipient, at the time of disclosure, (ii) subsequently becomes publicly
available other than through any act or omission by the Recipient or (iii)
otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Account Party, being hereinafter referred to as
Confidential Information ). The Recipient will not knowingly disclose any
such Confidential Information to any third party (other than to those
Persons who have a confidential relationship with the Recipient), and will
take all reasonable steps to restrict access to such information in a
manner designed to maintain the confidential nature of such information, in
each case until such time as the same ceases to be Confidential Information
or as the Account Party may otherwise instruct. It is understood, however,
that the foregoing will not restrict the Recipient's ability to freely
exchange such Confidential Information with prospective assignees of or
participants in the Recipient's position herein, but the Recipient's
ability to so exchange Confidential Information shall be conditioned upon
any such prospective assignee's or participant's entering into an
understanding as to confidentiality similar to this provision. It is
further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information in any litigation or proceedings
between the Account Party and such Recipient and/or if and to the extent
that such disclosure may be required (i) by a regulatory agency or
otherwise in connection with an examination of the Recipient's records by
appropriate authorities, (ii) pursuant to court order, subpoena or other
legal process or (iii) otherwise, as required by law; in the event of any
required disclosure under clause (ii) or (iii), above, the Recipient agrees
to use reasonable efforts to inform the Account Party as promptly as
practicable unless the Recipient is prohibited from doing so by court
order, subpoena or other legal process.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the
Agent, the Issuing Bank, and the Participating Banks each hereby
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement or any other Loan
Document, or any other instrument or document delivered hereunder or
thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge
Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York. The Account Party, the Agent, the Issuing Bank
and each Participating Bank each (i) irrevocably submits to the
jurisdiction of any New York State court or Federal court sitting in New
York City in any action arising out of any Loan Document, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to
the fullest extent it may effectively do so, the defense of an inconvenient
forum and (iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be enforced in
other jurisdictions. Nothing herein shall affect the right of any party to
serve legal process in any manner permitted by law or affect its right to
bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
THE ACCOUNT PARTY:
THE CONNECTICUT LIGHT AND
POWER COMPANY
By /s/Bruce F. Garelick
Title: Assistant Treasurer
THE AGENT AND ISSUING BANK:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent and as Issuing Bank
By /s/Christopher W. Criswell
Title: Vice President
By /s/Laura Monroe Singer
Title: Assistant Treasurer
THE PARTICIPATING BANKS:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By /s/Christopher W. Criswell
Title: Vice President
By /s/Laura Monroe Singer
Title: Assistant Treasurer
Participation Percentage: 100%
Address for Notices
Union Bank of Switzerland,
New York Branch
299 Park Avenue
New York, New York 10171-0026
Attention: Loan Servicing
Dept., James Brodus
Telephone: (212) 715-3227
Fax: (212) 715-3891
With a Copy To:
Attention: Christopher W. Criswell
Telephone: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Domestic
Participating Bank Lending Office
Union Bank of Switzerland, 299 Park Avenue
New York Branch New York, NY 10022
Attn: Loan Servicing
Dept., James Brodus
Tel: (212) 715-3227
Fax: (212) 715-3891
with a copy to:
Christopher W. Criswell
Tel: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE II
PENDING ACTIONS
NONE
[Form of Letter of Credit - CDA/CL&P SERIES B]
EXHIBIT 1.01A
IRREVOCABLE LETTER OF CREDIT
NO. SBY502181
September 22, 1993
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Dear Sir or Madam:
We hereby establish, at the request and for the account of The
Connecticut Light and Power Company (the "Account Party"), in your favor,
as Paying Agent (the "Paying Agent") under that certain Indenture of Trust,
dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as trustee (the "Trustee"), pursuant to
which $70,000,000 in aggregate principal amount of the Issuer's Pollution
Control Revenue Refunding Bonds (The Connecticut Light and Power Company
Project - 1993B Series) (the "Bonds"), are being issued, our Irrevocable
Letter of Credit No. SBY502181, in the amount of US$71,036,000.00 (SEVENTY-
ONE MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS) (subject to reduction and reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) September 22, 1996 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "Outstanding" under (and as defined in) the
Indenture, (iv) the fifth business day following receipt by you and the
Trustee of written notice from us that an Event of Default (as defined
below) has occurred under the Reimbursement Agreement (as defined below)
and of our determination to terminate this Letter of Credit on such fifth
business day and (v) the date upon which we receive a written certificate
signed by you and stating therein that a substitute or replacement Credit
Facility (as defined in the Indenture) has been provided pursuant to
Section 3.12 of the "Agreement" referred to (and as defined) in the
Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(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 and (iii) that is a day on which banking
institutions in all of the cities in which the principal offices of the
Trustee, the Paying Agent and the Remarketing Agent (as defined in the
Indenture) are located 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.
As used herein "Reimbursement Agreement" shall mean the Letter of
Credit and Reimbursement Agreement, dated as of September 1, 1993, between
the Account Party, us and certain Participating Banks referred to therein,
and the term "Event of Default" shall mean an "Event of Default" as that
term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount
which may be drawn under this Letter of Credit, subject to reductions in
amount and reinstatement as provided below, is US$71,036,000.00 (SEVENTY-
ONE MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS), of which the aggregate amounts set forth below may be drawn as
indicated.
(i) An aggregate amount not exceeding US$70,000,000.00 ( SEVENTY
MILLION AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount
may be reduced and reinstated as provided below, may be drawn in
respect of payment of principal (whether upon scheduled or accelerated
maturity, or upon redemption) of Eligible Bonds or the portion of the
purchase price of Eligible Bonds corresponding to principal (the
"Principal Component").
(ii) An aggregate amount not exceeding US$1,036,000.00 (ONE
MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS), as such amount may be reduced and reinstated as provided
below, may be drawn in respect of payment of (A) accrued and unpaid
interest on Eligible Bonds not in the Flexible Mode (as defined in the
Indenture) or that portion of the redemption price or purchase price
of such Eligible Bonds corresponding to accrued and unpaid interest,
but not more than an amount equal to accrued and unpaid interest on
such Eligible Bonds for up to a maximum of 45 days immediately
preceding the date of such drawing and (B) unpaid interest (whether
accrued or to accrue) on Eligible Bonds in the Flexible Mode or that
portion of the redemption price or purchase price of such Eligible
Bonds corresponding to such interest, but not more than an amount
equal to such interest on such Eligible Bonds for up to a maximum of
45 days immediately preceding the next Purchase Date (as defined in
the Indenture) for each such Eligible Bond (or, if interest on any
such Eligible Bond was not paid on the most recent Purchase Date for
such Bond, for up to a maximum of 45 days immediately preceding the
date of such drawing), calculated, in each case referred to in the
foregoing clause (A) or clause (B) at a maximum rate of twelve percent
(12%) per annum, or such lesser rate of interest as shall equal the
Maximum Interest Rate (as defined in the Indenture) in effect under
the Indenture with respect to such Eligible Bonds, and in any case
calculated on the basis of a year of 365 or 366 days (as applicable)
for the actual days elapsed (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED
STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds
(the "Premium Component"). If, subsequent to the date hereof, the
Premium Component shall be increased by us at the request of the
Account Party, the Premium Component shall be subject to reduction as
provided below, and amounts drawn in respect thereof shall not be
subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you
against (i) your draft, stating on its face: "Drawn under Irrevocable
Letter of Credit No. SBY502181, dated September 22, 1993", and (ii) the
appropriate certificate specified below, purportedly executed by you and
appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 299 Park
Avenue, New York, New York 10171-0026 Attention: Loan Servicing
Department, James Brodus (telephone: (212) 715-3227) (or at such other
office as we may designate by written notice to you) with a copy to
Christopher W. Criswell (telephone: (212) 715-3317), FAX: (212) 715-3878).
Presentation of such drafts and certificates may be made (a) by physical
presentation of such drafts and certificates or (b) by facsimile
transmission of such drafts and certificates received by us at (212) 715-
3891 (or at such other number as we may designate by written notice to you)
with prior telephone notice to us at (212) 715-3227, Attention: James
Brodus, (or at such other number as we may designate by written notice to
you; in any event with a copy to Christopher W. Criswell as aforesaid) that
such presentation is to be made by facsimile transmission and with the
original executed drafts and certificates to be received by us not later
than our close of business on the next business day, it being understood
that payments hereunder shall be made upon receipt by us of such facsimile
transmission; provided, however, that presentations of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds in
the Flexible Mode shall in all instances be made in accordance with the
foregoing clause (b). Drafts drawn under and in strict compliance with the
terms of this Letter of Credit will be duly honored by us upon presentation
thereof in accordance with this Paragraph 3 if presented on or prior to
4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds
in the Flexible Mode presented in accordance with the foregoing clause
(b):
(A) if such drafts and certificates are presented as
aforesaid at or prior to 1:30 P.M. (New York City time) on a
business day, and provided that such drafts and certificates
strictly conform to the requirements of this Letter of Credit, we
will initiate a wire transfer of the amount so drawn to your
account indicated below at or prior to 3:30 P.M. (New York City
time) on the same business day;
(B) if such drafts and certificates are presented as
aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York
City time) on a business day, and provided that such drafts and
certificates strictly conform to the requirements of this Letter
of Credit, we will initiate a wire transfer of the amount so
drawn to your account indicated below at or prior to 10:00 A.M.
on the business day next succeeding the business day on which
such drafts and certificates were presented (notwithstanding that
such day of presentation may have been the Credit Termination
Date); and
(C) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and
certificates:
(A) if such drafts and certificates are presented as
aforesaid at or prior to 4:00 P.M. (New York City time) on a
business day, and provided that such drafts strictly conform to
the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 10:00 A.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(B) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to you at Shawmut Bank Connecticut, National Association, Hartford,
Connecticut, ABA# 011900445, Account No. 0067548290 Corporate Trust Admin.
Wire Account, Attention: K. Larimore, Reference: CDA/CL&P Series 1993B, or
to such other account as you may from time to time specify to us in
writing. All payments made by us under this Letter of Credit will be made
with our own funds and not with any funds of the Account Party or the
Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
5.8(B) of the Indenture to pay that portion of purchase price corresponding
to principal of Eligible Bonds that are (A) subject to mandatory tender for
purchase pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(d)(ii) of the
Indenture or (B) tendered for purchase by the holders thereof pursuant to
2.3(G)(2)(c) of the Indenture, (ii) pursuant to Section 5.8(C) of the
Indenture to pay that portion of purchase price corresponding to principal
of Eligible Bonds that are the subject of a failed conversion pursuant to
Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture, as appropriate (any
such drawing in respect of the circumstances referred to in the foregoing
clause (i) or this clause (ii) being a "Tender Drawing"), (iii) pursuant to
Section 5.8(A) of the Indenture to pay the principal of Eligible Bonds or
that portion of the redemption price of Eligible Bonds corresponding to
principal, whether at stated maturity, upon acceleration or upon
redemption, or (iv) pursuant to Section 5.8(B) of the Indenture to pay that
portion of the purchase price corresponding to principal of Eligible Bonds
that are subject to mandatory tender for purchase pursuant to Section
2.3(G)(2)(d)(i) of the Indenture (any such drawing in respect of the
circumstances referred to in the foregoing clause (iii) or in this clause
(iv) being a "Redemption/Mandatory Purchase Drawing"), in each such case by
an amount equal to the amount of such draft. The Premium Component shall
be reduced immediately following our honoring any draft drawn hereunder to
pay premium on Eligible Bonds in connection with a Redemption/Mandatory
Purchase Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form
of Exhibit 4 to this Letter of Credit purportedly executed by you, we will
reduce the Principal Component, Interest Component and Premium Component to
the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component
resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay
unpaid interest on Eligible Bonds in the Flexible Mode or to pay
that portion of purchase price, but not redemption price,
corresponding to unpaid interest on Eligible Bonds in the
Flexible Mode, the amount so drawn shall be automatically
reinstated to the Interest Component unless, not later than the
business day preceding such drawing you shall have received
written notice from us that we will not reinstate the Interest
Component in the amount of such drawing. On the fifth day
following each drawing hereunder to pay accrued and unpaid
interest on Eligible Bonds that are not in the Flexible Mode, or
to pay that portion of purchase price, but not redemption price,
corresponding to accrued and unpaid interest on Eligible Bonds
that are not in the Flexible Mode, the amount so drawn shall be
automatically reinstated to the Interest Component, unless you
shall have theretofore received written notice from us that we
will not reinstate the Interest Component in the amount of such
drawing. Any notice of non-reinstatement delivered pursuant to
this subparagraph (i)(A) shall be in writing and shall be
delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non-
reinstatement as aforesaid, we shall deliver to you, by hand
delivery or facsimile transmission, a Notice of Reinstatement in
the form of Exhibit 5 hereto, then, upon such delivery to you,
the Interest Component shall be immediately reinstated to the
extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated
to an amount in excess of 45 days' interest on Eligible Bonds,
computed at the rate of 12% per annum on the basis of a year of
365 or 366 days (as applicable) for the actual days elapsed, or
such lesser rate of interest as shall equal the Maximum Interest
Rate (as defined in the Indenture) in effect under the Indenture
with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component
resulting from Redemption/Mandatory Purchase Drawings shall in no
event be reinstated. Reductions in the Principal Component resulting
from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the
remarketing of Pledged Bonds (as defined in the Indenture), or of
written notice from you that you have received such proceeds (or
a window receipt guaranteeing same day payment in immediately
available funds of such proceeds as contemplated by Section
9.19(A) of the Indenture), the Principal Component shall be
reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery
or facsimile transmission, of a Notice of Reinstatement in the
form of Exhibit 5 hereto, the Principal Component shall be
immediately reinstated to the extent specified in such Notice of
Reinstatement.
(C) In no event shall the Principal Component be reinstated
to an amount in excess of the aggregate principal amount of
Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in
Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or
subparagraph (ii), above, may be combined, in a single such Notice, with
any other Notice of Reinstatement delivered pursuant to the other such
subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
299 Park Avenue, New York, New York 10171-0026, Attention: Loan Servicing
Department, James Brodus (telephone: (212) 715-3227, telecopy: (212) 715-
3891), with a copy to Christopher W. Criswell, (telephone: (212) 715-3317,
telecopy: (212) 715-3878), (or at such other office as we may designate by
written notice to you), specifically referring to the number of this Letter
of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety
(but not in part) to any transferee who has succeeded you as Paying Agent
under the Indenture and may be successively so transferred. Transfer of
the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied
by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
Publication No. 400 of the International Chamber of Commerce ("UCP") and,
to the extent not inconsistent with the UCP, the laws of the State of New
York, including the Uniform Commercial Code as in effect in the State of
New York. This Letter of Credit sets forth in full our undertaking, and,
except as expressly set forth herein, such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein (including, without limitation,
the Bonds, the Indenture and the Reimbursement Agreement), except only the
certificates and the drafts referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document,
instrument or agreement except for such certificates and such drafts.
Whenever and wherever the terms of this Letter of Credit shall refer to the
purpose of a draft hereunder, or the provisions of any agreement or
document pursuant to which such draft may be presented hereunder, such
purpose or provisions shall be conclusively determined by reference to the
certificate accompanying such draft; in furtherance of this sentence,
whether any drawing is in respect of payment of regularly scheduled
interest on the Bonds or of principal of or interest on the Bonds upon
scheduled or accelerated maturity or is a Tender Drawing or a
Redemption/Mandatory Purchase Drawing shall be conclusively determined by
reference to the certificate accompanying such drawing.
Very truly yours,
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH
By ___________________________________
Title:
By ___________________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of ____________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of
Credit in the amount of $____________ pursuant to Section 5.8 of the
Indenture to pay that portion of the purchase price corresponding to
principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[2.3(G)(1)(c)] [2.3(G)(2)(d)(ii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section
2.3(G)(2)(c) of the Indenture.]
[the subject of a failed conversion pursuant to Section
2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture.]
(3) The amount of purchase price corresponding to principal of
Eligible Bonds and with respect to the payment of which the Paying Agent,
pursuant to the foregoing Sections of the Indenture, is drawing under the
Letter of Credit, is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of purchase price corresponding to principal of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. The amount of the draft accompanying
this Certificate in respect of purchase price corresponding to principal of
such Bonds has been computed in accordance with the terms and conditions of
such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
purchase price of any Bonds that are not Eligible Bonds, including any
Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined
in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made
are Eligible Bonds in the Flexible Mode, and payment of this drawing shall
be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND,
NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of
Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor
of the Paying Agent. Terms defined in the Letter of Credit and used but
not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase
Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 5.8(A) and Section 8.5 of the Indenture to
pay the principal of Eligible Bonds due pursuant to the Indenture
upon maturity or as a result of acceleration of such Eligible
Bonds in accordance with the Indenture and the terms of such
Eligible Bonds.]
[pursuant to Section 5.8(A) of the Indenture to pay that portion
of the redemption price corresponding to principal of [and
premium on] Eligible Bonds due pursuant to the Indenture upon
redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(B) of the Indenture to pay that portion
of the purchase price of Eligible Bonds corresponding to
principal that are subject to mandatory tender for purchase
pursuant to Section 2.3(G)(2)(d)(i) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to
principal of] [and premium on] [purchase price corresponding to principal
of] Eligible Bonds which is due and payable and with respect to the payment
of which the Paying Agent, pursuant to the foregoing Section[s] of the
Indenture, is to draw under the Letter of Credit is as follows, and the
amount of the draft accompanying this Certificate does not exceed such
amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
principal, redemption price (including premium, if any) or purchase price
of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as
defined in the Indenture), any Borrower Bonds (as defined in the
Indenture), and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
(6) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be
drawn under the Letter of Credit, and, upon the honoring of such draft, the
Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND,
NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of
Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor
of the Paying Agent. Terms defined in the Letter of Credit and used but
not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $____________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds that
is due and owing is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds, as
indicated in paragraph (3), above, does not exceed the Interest Component
of the Letter of Credit. The amount of the draft accompanying this
Certificate in respect of payment of [interest] [redemption price
corresponding to interest] [purchase price corresponding to interest] on
Eligible Bonds has been computed in accordance with the terms and
conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for
the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of
Eligible Bonds (including for this purpose all Pledged Bonds and all
Borrower Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced
to $__________________.]
[The Premium Component of the Letter of Credit is reduced to
$__________________.]
[The Interest Component of the Letter of Credit is reduced
to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of UNION BANK OF SWITZERLAND,
NEW YORK BRANCH (the "Bank"), hereby gives the following notice to
_________________, as paying agent (the "Paying Agent"), with reference to
Irrevocable Letter of Credit No. SBY502181 (the "Letter of Credit") issued
by the Bank in favor of the Paying Agent. Terms defined in the Letter of
Credit and used but not defined herein have the meanings given them in the
Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section
2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has
been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section
2.04(c) of the Reimbursement Agreement, the Principal Component has
been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of
Reinstatement as of the ________ day of _______________, 19___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Irrevocable Letter of Credit No. SBY502181
Gentlemen:
The undersigned, as Paying Agent under that certain Indenture of
Trust, dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as Trustee, is named as beneficiary in
the Letter of Credit referred to above (the "Letter of Credit"). The
Transferee named below has succeeded the undersigned as Paying Agent under
such Indenture.
___________________________________
(Name of Transferee)
___________________________________
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary
under the Letter of Credit; provided, however, that no rights shall be
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the
foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________
Title:
Address of Principal
Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
Form of
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement,
dated as of September 1, 1993 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Agreement";
unless otherwise defined herein terms defined in the Agreement are used
herein with the same meaning), among The Connecticut Light and Power
Company (the "Account Party"), Union Bank of Switzerland, New York Branch
("UBS"), as Issuing Bank, the Participating Banks named therein and from
time to time parties thereto, and UBS as Agent. Pursuant to the Agreement,
______________ (the "Assignor") has purchased a participation from the
Issuing Bank in and to the Letter of Credit and each payment thereunder and
demand loan made by the Issuing Bank and has committed to make Advances to
the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise
the Assignee, an amount equal to (1) the aggregate amount of unreimbursed
letter of credit payments, demand loans and Advances outstanding (as set
forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From
and after the Effective Date, the Assignor agrees that the Assignee shall
be entitled to all rights, powers and privileges of the Assignor under the
Agreement and the Pledge Agreement to the extent of the Assigned Interest,
including without limitation (i) the right to receive all payments in
respect of the Assigned Interest for the period from and after the
Effective Date, whether on account of reimbursements, principal, interest,
fees, indemnities in respect of claims arising after the Effective Date,
increased costs, additional amounts or otherwise; (ii) the right to vote
and to instruct the Agent and the Issuing Bank under the Agreement based on
the Assigned Interest; (iii) the right to set-off and to appropriate and
apply deposits of the Account Party as set forth in the Agreement; and (iv)
the right to receive notices, requests, demands and other communications.
The Assignor agrees that it will promptly remit to the Assignee any amount
received by it in respect of the Assigned Interest (whether from the
Account Party, the Agent or otherwise) in the same funds in which such
amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Agreement or the Related Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Agreement, the Related Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Account Party or the performance or observance by the Account Party of
any of its obligations under the Agreement, the Related Documents or any
other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (vi) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered
to the Agent for acceptance and recording by the Agent. Upon such
acceptance and recording and receipt of the consent of the Issuing Bank
required pursuant to Section 10.06(b) of the Agreement (which shall be
evidenced by the Issuing Bank's execution of this Assignment on the
appropriate space on Schedule 1), as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in
this Assignment, have the rights and obligations of a Participating Bank
thereunder and under the Pledge Agreement and (ii) the Assignor shall, to
the extent provided in this Assignment, relinquish its rights and be
released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the
Effective Date, the Agent shall make all payments under the Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and fees with respect thereto) to the
Assignee at its address set forth on Schedule 1 hereto. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Agreement for periods prior to the Effective Date directly between
themselves.
7. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties
hereto, each of which counterpart when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their respective officers thereunto duly authorized, as of
the date first above written, such execution being made on Schedule 1
hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1.
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest:1 __________%
1 Specify percentage to no more than 8 decimal points.
Section 2.
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage2 (upon
the effectiveness of
this Assignment) ___________%
2 The sum of the percentages set forth in Section 2(b) and (c) shall
equal
the percentage set forth in Section 2(a).
Section 3.
Effective Date:3__________, 19__
3 Such date shall be at least 5 Business Days after the execution of
this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Issuing Bank
By ___________________________________
Title:
By ___________________________________
Title:
Accepted this __ day4
of _____________, ___
4 Not to be accepted without proof of Account Party's consent pursuant
to
Section 10.06(b) of the Reimbursement Agreement.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent
By ___________________________________
Title:
By ___________________________________
Title:
APPLICABLE LENDING OFFICE
The Assignee's Applicable Lending Office is as follows:
EXHIBIT 1.01C
Form of
PLEDGE AGREEMENT
Dated as of September 1, 1993
THIS PLEDGE AGREEMENT ("this Agreement") is made by and between:
(i) The Connecticut Light and Power Company, a corporation duly
organized and validly existing under the laws of the State of
Connecticut (the "Account Party"); and
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH, as issuer of the
Letter
of Credit (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iii) The Agent (as defined therein) and the Participating Banks
(as
defined therein) from time to time party to the
Reimbursement
Agreement hereinafter referred to.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the "Issuer") proposes to
issue,
pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the "Indenture"), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being
the
"Trustee"), $70,000,000 aggregate principal amount of its Pollution Control
Revenue Refunding Bonds (The Connecticut Light and Power Company Project -
1993B Series) (the "Bonds"). Pursuant to the Indenture and the Loan
Agreement, dated as of September 1, 1993, between the Issuer and the
Account
Party, the Account Party has requested the Issuing Bank to issue the letter
of credit referred to therein in favor of the Paying Agent described
therein.
The Issuing Bank has agreed to issue such letter of credit subject to the
terms and conditions set forth in that certain Letter of Credit and
Reimbursement Agreement, of even date herewith, among the Account Party,
the Issuing Bank, the Agent and the Participating Banks referred to therein
and
relating to the Bonds (said Letter of Credit and Reimbursement Agreement,
as it may hereafter be amended, modified or supplemented from time to time,
being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to
issue such letter of credit and of the Participating Banks to make the
Advances described in the Reimbursement Agreement that the Account Party
shall have made the pledge described in this Agreement.
NOW THEREFORE, in consideration of the premises and to induce the
Issuing Bank to issue such letter of credit and to induce the Participating
Banks to make such Advances, the Account Party hereby agrees as follows
(capitalized terms used herein and not otherwise defined herein having the
meanings assigned them in the Reimbursement Agreement):
SECTION 1. Pledge. The Account Party hereby pledges to the
Issuing Bank for the benefit of the Agent and the Participating Banks, and
grants to the Issuing Bank for the benefit of the Agent and the
Participating Banks a security interest in, the following (the "Pledged
Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the
instruments, if any, evidencing the Pledged Bonds, and all interest,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale
upon issuance of the Pledged Bonds) of any and all of the foregoing
collateral (including, without limitation, proceeds that constitute
property of the types described above).
SECTION 2. Security for Obligations. This Agreement secures the
payment of all obligations of the Account Party now or hereafter existing
under the Reimbursement Agreement, whether for reimbursement, principal,
interest, fees, expenses or otherwise, and all obligations of the Account
Party now or hereafter existing under this Agreement (all such obligations
of the Account Party being the "Obligations"). Without limiting the
generality of the foregoing, this Agreement secures the payment of all
amounts which constitute part of the Obligations and would be owed by the
Account Party to the Issuing Bank, the Agent or any Participating Bank under
the Reimbursement Agreement but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Account Party.
SECTION 3. Delivery of Pledged Collateral. (a) All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to the Paying Agent and held by the Paying Agent on behalf of the
Issuing Bank pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to the Issuing
Bank. For the better perfection of the Issuing Bank's, the Agent's and the
Participating Banks' rights in and to the Pledged Collateral, the Account
Party shall forthwith, upon the pledge of any Pledged Collateral hereunder,
cause such Pledged Collateral to be registered in the name of such nominee
or nominees of the Issuing Bank as the Issuing Bank shall direct.
(b) If, prior to the payment in full of the Obligations and the
termination of the Letter of Credit, the Account Party shall become
entitled to receive or shall receive any payment in respect of the Pledged
Collateral, the Account Party agrees to accept the same as the agent of the
Issuing Bank, the Agent and the Participating Banks, to hold the same in
trust for the Issuing Bank, the Agent and the Participating Banks and to
deliver the same to the Issuing Bank. All such sums so received by the
Issuing Bank shall be credited against the Obligations in such order as the
Agent shall, in its sole discretion, elect.
(c) Notwithstanding the foregoing subsection (a), if and for so
long as the Bonds are to be held in the Book-Entry Only System (as defined
in the Indenture), the Account Party's obligations under such subsection
shall be deemed satisfied if such Pledged Bonds are (i) registered in the
name of DTC (as defined in the Indenture) in accordance with the Book-Entry
Only System, (ii) credited on the books of DTC to the account of the Paying
Agent (or its nominee) and (iii) further credited on the books of the Paying
Agent (or such nominee) to the account of the Issuing Bank (or its nominee).
SECTION 4. Representations and Warranties. The Account Party
represents and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this
Agreement creates, upon the Paying Agent's taking possession of the Pledged
Bonds pursuant to Section 3 hereof (whether by physical possession or by
means of registration to DTC and book-entry credit as described in
subsection (c) thereof), a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the Obligations.
(b) No consent of any other person or entity and no
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required (i) for the pledge
by the Account Party of the Pledged Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by the Account
Party, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest), other than any filings of Uniform Commercial Code financing
statements that may be required for such perfection with respect to any
"proceeds" of the Pledged Bonds, or (iii) for the exercise by the Issuing
Bank of the voting or other rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with any disposition of any
portion of the Pledged Collateral by laws affecting the offering and sale of
securities generally and except for such as have already been obtained and
are in full force and effect).
SECTION 5. Further Assurances. The Account Party agrees that at
any time and from time to time, at the expense of the Account Party, the
Account Party will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable,
or that the Issuing Bank may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or
to enable the Issuing Bank to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
SECTION 6. Release. In the event that any Pledged Bonds are
subsequently remarketed by the Remarketing Agent and the proceeds thereof,
when added to any amounts paid to the Issuing Bank and/or the Agent by the
Account Party, are sufficient to (a) reimburse the Issuing Bank and the
Participating Banks in full for the drawing under the Letter of Credit
pursuant to which such Pledged Bonds became Pledged Bonds, (b) repay or
prepay any demand loan or Advance made in respect thereof and (c) pay all
interest, fees and other amounts accrued in respect thereof pursuant to the
Reimbursement Agreement, the lien of this Agreement shall be released as to
such Pledged Bonds (but not as to any other Pledged Bonds).
SECTION 7. Transfers and Other Liens. The Account Party agrees
that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Pledged Collateral, or (ii) create or
permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Pledged Collateral, except
for the security interest under this Agreement.
SECTION 8. Bank Appointed Attorney-in-Fact. The Account Party
hereby appoints the Issuing Bank the Account Party's attorney-in-fact, with
full authority in the place and stead of the Account Party and in the name
of the Account Party or otherwise, from time to time in the Issuing Bank's
discretion to take any action and to execute any instrument which the
Issuing Bank may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, indorse and
collect all instruments made payable to the Account Party representing any
interest payment or other distribution in respect of the Pledged Collateral
or any part thereof and to give full discharge for the same.
SECTION 9. Bank May Perform. If the Account Party fails to
perform any agreement contained herein, the Issuing Bank may itself
perform, or cause performance of, such agreement, and the expenses of the
Issuing Bank incurred in connection therewith shall be payable by the Account
Party under Section 10.04 of the Reimbursement Agreement.
SECTION 10. The Issuing Bank's Duties. The powers conferred on
the Issuing Bank hereunder are solely to protect its interest in the
Pledged Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Collateral in its actual
possession and the accounting for moneys actually received by it hereunder,
the Issuing Bank shall have no duty as to any Pledged Collateral, as to
ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Issuing Bank has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Pledged Collateral.
The Issuing Bank shall be deemed to have exercised reasonable care in the
custody and preservation of any Pledged Collateral in its actual possession
if such Pledged Collateral is accorded treatment substantially equal to
that which the Issuing Bank accords its own property.
SECTION 11. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Issuing Bank may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the
State of New York at that time (the "Code") (whether or not the Code
applies to the affected Pledged Collateral), and may also, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Issuing Bank's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Issuing Bank may deem commercially reasonable. The
Account Party agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to the Account Party of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Issuing Bank shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The
Issuing Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(b) Any cash held by the Issuing Bank as Pledged Collateral and
all cash proceeds received by the Issuing Bank in respect of any sale
of, collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Issuing Bank, be held
by the Issuing Bank as collateral for, and/or then or at any time
thereafter be applied (after payment of any amounts payable to the
Issuing Bank pursuant to Section 9 hereof and/or Section 10.04 of the
Reimbursement Agreement) in whole or in part by the Issuing Bank
against, all or any part of the Obligations in such order as the
Issuing Bank shall elect. Any surplus of such cash or cash proceeds held by
the Issuing Bank and remaining after payment in full of all the
Obligations shall be paid over to the Account Party or to whomsoever may be
lawfully entitled to receive such surplus.
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable
under this Agreement and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Account Party, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Issuing Bank, the Agent, the Participating Banks and their respective
successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), any Participating Bank may, subject to Section
10.06 of the Reimbursement Agreement, assign or otherwise transfer all or any
portion of its rights and obligations under the Reimbursement Agreement
(including, without limitation, all or any portion of its Commitment and
the advances owing to it) to any other person or entity, and such other
person or entity shall thereupon become vested with all the benefits in
respect thereof granted to such Participating Bank herein or otherwise. Upon
the later of the payment in full of the Obligations and all other amounts
payable under this Agreement and the expiration or termination of the
Commitments, the security interest granted hereby shall terminate and all
rights to the Pledged Collateral shall revert to the Account Party. Upon any
such termination, the Issuing Bank will, at the Account Party's expense,
return to the Account Party such of the Pledged Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof and execute and
deliver to the Account Party such documents as the Account Party shall
reasonably request to evidence such termination.
IN WITNESS WHEREOF, the Account Party has caused this Agreement
to be duly executed and delivered by its officer thereunto duly authorized as
of the date first above written.
THE CONNECTICUT LIGHT AND
POWER COMPANY, as Account Party and
pledgor
By ________________________________________
Title:
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH, as Issuing Bank and pledgee
By ________________________________________
Title:
By ________________________________________
Title:
[Form of Opinion of King & Spalding - CDA/CL&P SERIES B]
EXHIBIT 5.01B
September 22, 1993
To Union Bank of Switzerland, New York Branch,
as Agent and as Issuing Bank under
the Reimbursement Agreement referred
to below, and to each Participating
Bank thereunder
Re: The Connecticut Light and Power Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of
the Letter of Credit and Reimbursement Agreement, dated as of September 1,
1993
(the "Reimbursement Agreement"), among The Connecticut Light and Power
Company (the "Company"), Union Bank of Switzerland, New York Branch, as the
Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and
the Participating Banks referred to therein. Unless otherwise defined
herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special New York counsel to the Agent and the Issuing
Bank in connection with the preparation, execution and delivery of the
Reimbursement Agreement and the issuance by the Issuing Bank of the Letter
of Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties
thereto; and
(b) The documents furnished to you today pursuant to Section
5.01 of the Reimbursement Agreement, including the opinion of counsel
delivered pursuant to Section 5.01(f)(i) of the Reimbursement
Agreement (the "Opinion").
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing
such documents and the conformity to the originals of all such documents
submitted to us as copies or telecopies. We have also assumed that the
Agent, the Issuing Bank and each Participating Bank have duly executed and
delivered, with all necessary power and authority (corporate and
otherwise), the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as
to matters governed by laws other than the laws of the State of New York,
we have relied upon the Opinion and have assumed without independent
investigation the correctness of the matters set forth therein, our
opinions expressed below being subject to the assumptions, qualifications and
limitations set forth in the Opinion. As to matters of fact, we have
relied solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
4. The Reimbursement Agreement is in substantially acceptable
legal form.
5. The Opinion and the other documents referred to in item (b),
above, are substantially responsive to the requirements of the
Sections of the Reimbursement Agreement pursuant to which the same have
been delivered.
The foregoing opinions are solely for your benefit and may not be
relied upon by any other person, other than any person that may become a
Participating Bank under the Reimbursement Agreement after the date hereof.
Very truly yours,