Exhibit 4.2.24
CONNECTICUT DEVELOPMENT AUTHORITY
and
THE CONNECTICUT LIGHT AND POWER COMPANY
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of May 1, 1996
and
Amended and Restated
as of January 1, 1997
Connecticut Development Authority
$62,000,000 Pollution Control Revenue Bond
(The Connecticut Light and Power Company
Project - 1996A Series)
TABLE OF CONTENTS
Page
PREAMBLE 1
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions 4
Section 1.2. Interpretation 10
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority 11
Section 2.2 Limitation of Control by Borrower 13
Section 2.3. Representations by the Borrower 13
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses 15
Section 3.2. Other Amounts Payable 16
Section 3.3. Manner of Payment 17
Section 3.4. Obligation Unconditional 17
Section 3.5. Security Clauses 17
Section 3.6. Issuance of Bonds 17
Section 3.7. Issuance, Delivery and Surrender of
Mortgage Bonds 18
Section 3.8. Redemption of Mortgage Bonds 18
Section 3.9. Effective Date and Term 18
Section 3.10. Borrower's Purchase of Bonds 18
Section 3.11. Standby Bond Purchase Agreement 19
Section 3.12. Substitution or Replacement of
Standby Bond Purchase Agreement 19
Section 3.13. Securities Laws 21
Section 3.14. New York Paying Agent 21
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project 21
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project 21
Section 4.3. Taxes 21
Section 4.4. Insurance 22
Section 4.5. Compliance with Law 22
Section 4.6. Maintenance and Repair 22
ARTICLE V
CODEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder 23
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction 23
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation 23
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate
Existence; Conditions under which
Exceptions Permitted 23
Section 6.2. Indemnification, Payment of Expenses,
and Advances 24
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability 26
Section 6.4. Covenant as to Project Use 27
Section 6.5. Further Assurances and Corrective
Instruments 28
Section 6.6. Covenant by Borrower as to Compliance
with Indenture 28
Section 6.7. Assignment of Agreement or Mortgage
Bonds 28
Section 6.8. Inspection 28
Section 6.9. Default Notification 29
Section 6.10. Covenant Against Discrimination 29
Section 6.11. Authority Costs and Expenses 29
Section 6.12. Bond Insurer Notice Provisions 29
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default 30
Section 7.2. Remedies on Default 31
Section 7.3 Remedies Upon Project Use Default 32
Section 7.4. No Duty to Mitigate Damages 32
Section 7.5. Remedies Cumulative 32
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment 33
Section 8.2. Notice by the Borrower of Optional
Prepayment 34
Section 8.3. Mandatory Prepayment on Taxability 35
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events 35
Section 8.5. Mandatory Prepayment Pursuant to
Standby Bond Purchase Agreement 35
ARTICLE IX
GENERAL
Section 9.1. Indenture 35
Section 9.2. Benefit of and Enforcement by
Bondholders 35
Section 9.3. Force Majeure 35
Section 9.4. Amendments 36
Section 9.5. Notices 36
Section 9.6. Prior Agreements Superseded 36
Section 9.7. Execution of Counterparts 37
Section 9.8. Time 37
THIS AMENDED AND RESTATED LOAN AGREEMENT, made and dated as of January
1, 1997, amending and restating that certain Loan Agreement made and dated as
of May 1, 1996 (the "Original Loan Agreement") (the Original Loan Agreement
as amended and restated hereby is hereinafter referred to as the "Loan
Agreement"), each by and between the Connecticut Development Authority, a
body corporate and politic constituting a public instrumentality and
political subdivision of the State of Connecticut, and The Connecticut Light
and Power Company, a corporation organized and existing under the laws of the
State of Connecticut,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-1a through 32-23xx, as amended (the "Act"), declares
that there is a continuing need in the State (1) for economic development and
activity to provide and maintain employment and tax revenues and to control,
abate and prevent pollution to protect the public health and safety and (2)
for assistance to public service businesses providing transportation and
utility services in the State, and that the availability of financial
assistance and suitable facilities are important inducements to industrial
and commercial enterprises to remain or locate in the State and to provide
industrial, recreation, urban and public service projects; and
WHEREAS, the Act provides that (1) the term "project" as used therein
means any facility, plant, works, system, building, structure, utility,
fixture or other real property improvement located in the State, and the land
on which it is located or which is reasonably necessary in connection
therewith, which is of a nature or which is to be used or occupied by any
person for purposes which would constitute it as an economic development
project, recreation project, urban project, public service project or health
care project, and any real property improvement reasonably related thereto,
and (2) a project may also include or consist exclusively of machinery,
equipment or fixtures; and
WHEREAS, the Act defines economic development project to include "any
project which is to be used or occupied by any person for . . . (2)
controlling, abating, preventing or disposing land, water, air or other
environmental pollution . . . or (3) the conservation of energy or the
utilization of cogeneration technology or solar, wind, hydro, biomass or
other renewable sources to produce energy for any industrial or commercial
application"; and
WHEREAS, the Act provides that the Authority shall have power to
determine the location and character of, and extend credit or make loans to
any person for the planning, designing, acquiring, improving and equipping
of, a project which may be secured by loan, lease or sale agreements,
contracts and other instruments, upon such terms and conditions as the
Authority shall determine to be reasonable, to require the inclusion in any
contract, loan agreement or other instrument of such provisions for the
construction, use, operation, maintenance and financing of the project as the
Authority may deem necessary or desirable, to issue its bonds for such
purposes, subject to the approval of the Treasurer of the State, and, as
security for the payment of the principal or redemption price, if any, of and
interest on any such bonds, to pledge or assign such a loan, lease or sale
agreement and the revenues and receipts derived by the Authority from such a
project; and
WHEREAS, The Connecticut Light and Power Company (the "Borrower")
currently owns certain undivided interests in existing facilities within
certain municipalities in the State and, by resolution adopted in furtherance
of the purposes of the Act, the Authority has accepted the application of the
Borrower for assistance in the financing of facilities for the control,
abatement or prevention of environmental pollution deriving from the
operation of certain nuclear electric generating facilities (the "Project");
and
WHEREAS, the Authority has by a resolution adopted April 17, 1996
authorized the issuance of $62,000,000 principal amount of its Pollution
Control Revenue Bonds (The Connecticut Light and Power Company Project -
1996A Series) (the "Bonds") for the purpose of providing funds for the
financing of construction of and additions to the pollution control and
sewage and solid waste disposal facilities of the Borrower; and
WHEREAS, pursuant to such resolution, the Bonds were secured by an
Indenture of Trust, dated as of May 1, 1996 (the "Original Indenture"), by
and between the Authority and Fleet National Bank, as trustee; and
WHEREAS, concurrently with the execution of the Original Indenture, the
Authority and the Borrower entered into the Original Loan Agreement,
providing for a loan by the Authority to the Borrower in an amount equal to
the principal and amount of the Bonds; and
WHEREAS, in order to support the payment of the Bonds, the Borrower,
concurrently with the execution of the Original Indenture, arranged for the
delivery to the Paying Agent (as hereinafter defined) of an irrevocable
Letter of Credit, dated the date of the delivery of the Bonds, issued by
Canadian Imperial Bank of Commerce, New York Agency, for the account of the
Borrower in favor of the Paying Agent as beneficiary on behalf of the owners
of the Bonds; and
WHEREAS, the Borrower and Canadian Imperial Bank of Commerce, New York
Agency, entered into a Letter of Credit and Reimbursement Agreement dated as
of May 1, 1996, obligating the Borrower, inter alia, to repay all amounts
drawn under the Letter of Credit; and
WHEREAS, the Connecticut Department of Public Utility Control approved
the issuance of the Note (as such term is defined in the Original Indenture);
and
WHEREAS, on May 21, 1996, the Authority issued the Bonds under and in
accordance with the provisions of the Original Indenture; and
WHEREAS, the Bonds are special obligations of the Authority, payable
solely out of the revenues and other receipts, funds or monies derived by the
Authority under this Agreement or the Indenture (as hereinafter defined) and
from any amounts otherwise available under the Indenture for the payment of
the Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the
premises have certified that the portion of the Project that constitutes
pollution control facilities, as designed, is in furtherance of the purpose
of controlling, abating or preventing pollution at the Plant; and
WHEREAS, the Borrower has determined to replace the Letter of Credit (as
such term is defined in the Original Indenture) with a substitute Credit
Facility (as such term is defined in the Original Indenture) consisting of
credit support in the form of a bond insurance policy to be issued by AMBAC
Indemnity Corporation (the "Bond Insurer") and liquidity support in the form
of a standby bond purchase agreement, by and between the Borrower and Societe
Generale, New York Branch, and to make certain other modifications to the
Original Indenture in connection therewith; and
WHEREAS, in order to further secure the Bonds, the Borrower has
determined to issue its 1996 Series B First Mortgage Bonds due May 1, 2031
(the "Mortgage Bonds") pursuant to that certain Indenture of Mortgage and
Deed of Trust dated as of May 1, 1921, between the Borrower and Bankers Trust
Company, as Trustee, as heretofore amended and supplemented and as
hereinafter amended or supplemented in accordance with the provisions thereof
(the "Mortgage"); and
WHEREAS, the Borrower acknowledges that the Authority is providing
financing for the project in furtherance of the Authority's corporate
purposes under the Act, that the accomplishment of these purposes is
dependent upon the compliance of the Borrower with its covenants contained in
this Agreement, that the Authority has a resulting beneficial interest in the
Project, and that the Borrower's use of and interest in the Project as
provided hereby are in furtherance of the discharge of a public purpose; and
WHEREAS, the Connecticut Department of Public Utility Control has
approved the substitution of the Credit Facility and the issuance of the
Mortgage Bonds; and
WHEREAS, the Authority, at the request of the Borrower, has determined
to amend and restate the Original Loan Agreement in order to provide for the
amendments, modifications and other changes necessary to effectuate the
replacement of the Letter of Credit and the issuance by the Borrower of the
Mortgage Bonds and such other actions to be taken in connection therewith;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, covenants and agreements herein set forth, the Authority and
the Borrower, each binding itself, it successors and assigns, do mutually
promise, covenant and agree as follows (provided that in the performance of
the agreements of the Authority herein contained, any obligation it may incur
for the payment of money shall not be an obligation, debt or liability of the
State or any municipality thereof and neither the State nor any municipality
thereof shall be liable on any obligation so incurred, but any such
obligation shall be payable solely out of the revenues or other receipts,
funds or monies to be derived by the Authority under this Agreement or the
Indenture and from any amounts otherwise available under the Indenture for
the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the
following words and terms shall have the respective meanings set forth as
follows, and any capitalized word or term used but not defined herein is used
as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23xx, as amended.
"Agreement" means this Amended and Restated Loan Agreement and any
amendments and supplements hereto.
"Alternate Liquidity Facility" means a standby bond purchase agreement
or other liquidity device issued in accordance with Section 3.12 hereof.
"Authority" means the Connecticut Development Authority, a body
corporate and politic constituting a public instrumentality and political
subdivision of the State of Connecticut duly organized and existing under the
laws of the State, and any body, board, authority, agency or other political
subdivision or instrumentality of the State which shall hereafter succeed to
the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the
Chairman or Vice Chairman, the President, the Executive Vice President or any
Senior Vice President or any Vice President thereof and, in the case of the
Borrower, the Chairman, Vice Chairman, President, any Vice President, Chief
Financial Officer, Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary thereof and, when used with reference to the performance of any
act, the discharge of any duty or the execution of any certificate or other
document, any officer, employee or other person authorized to perform such
act, discharge such duty or execute such certificate or other document.
"Bank" means any bank or banks designated from time to time as a "Bank"
under the Standby Bond Purchase Agreement, except that if one or more
Alternate Liquidity Facilities are in effect, such term means any entity or
entities obligated to make payments under each Alternate Liquidity Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F) of
the Indenture. If any person claims to the Trustee to be a Beneficial Owner,
for purposes of Section 2.4(C) of the Indenture, such person shall prove such
claim to the satisfaction of the Trustee with such documentation and
signature guaranties as the Trustee may request.
"Bonds" means the $62,000,000 Pollution Control Revenue Bonds (The
Connecticut Light and Power Company Project - 1996A Series) authorized and
issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman Breed Abbott & Morgan or such other
nationally recognized bond counsel selected by the Authority and reasonably
satisfactory to the Borrower and the Trustee.
"Bond Insurer" shall mean AMBAC Indemnity Corporation, a Wisconsin-
domiciled stock insurance company.
"Borrower" means (i) The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut, and its successors and assigns and (ii) any surviving resulting
or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday, (ii)
that is a day on which banks located in Hartford, Connecticut and New York,
New York are not required or authorized to remain closed, (iii) that is a day
on which banking institutions in all of the cities in which the principal
offices of the Trustee, the Mortgage Trustee and the Paying Agent and, if
applicable, the Remarketing Agent and the Bank are located and are not
required or authorized to remain closed and (iv) that is a day on which the
New York Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and
regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes effective
with respect to a Bond, and with respect to a Bond in the Multiannual Mode,
the date on which a new Rate Period becomes effective.
"Debt Service Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"Disclosure Documents" shall mean the Borrower's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, the Borrower's Quarterly
Reports on Form 10-Q for the fiscal quarters ended March 31, 1996, June 30,
1996 and September 30, 1996 and the Borrower's Current Reports on Form 8-K
dated January 31, 1996, March 30, 1996, April 15, 1996, June 6, 1996, June
18, 1996, June 28, 1996, July 22, 1996, August 19, 1996, November 25, 1996
and January 20, 1997.
"DTC" or "The Depository Trust Company" shall mean the limited-purpose
trust company organized under the laws of the State of New York which shall
act as securities depository for the Bonds, and any successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with Section
6.3(H) of this Agreement and proceedings pursuant to such section are
continuing, (2)(a)(i) a private ruling specifically applicable to the Bonds
or (ii) the receipt by any Bondowner of a notice of assessment and demand for
payment from the Internal Revenue Service and (b)(i) the expiration of the
appeal period provided therein if no appeal is taken or (ii) if an appeal is
taken, a final unappealable decision by a court of competent jurisdiction;
provided that in the case of an event described in clause (2) that the
Authority or the Bondowner, as the case may be, has given the Borrower and
the Trustee prompt written notice of any application for such a private
ruling or, as the case may be, any proposed assertion of taxability by the
Internal Revenue Service and, if the Borrower agrees to pay all expenses in
connection therewith, permits the Borrower to contest such action, either
directly or in the name of the registered owner, through any level of appeal
determined by the Borrower, or (3) the admission in writing by the Borrower,
in the case of clause (1), (2) and (3) to the effect that the interest on the
Bonds is includable in the gross income for federal income tax purposes
(other than for purposes of any alternative minimum tax, environmental tax or
foreign branch profits tax) of an owner or former owner thereof, other than
for a period during which such owner or former owner is or was a "Substantial
User" of the Project or a "Related Person" as such terms are defined in the
Code. For purposes of this definition, the term owner or Bondowner means the
Beneficial Owner of the Bonds so long as the Book-Entry Only System (as
defined in Section 2.3(F) of the Indenture) is in effect.
"Event of Default" means an Event of Default as defined in Section 7.1
hereof.
"Financing Documents" means this Agreement, the Tax Regulatory Agreement
and the Mortgage Bonds.
"Indenture" means the Amended and Restated Indenture of Trust, of even
date herewith, by and between the Authority and the Trustee, together with
all indentures supplemental thereto made and entered into in accordance
therewith.
"Insurance Policy" shall mean the municipal bond insurance policy issued
by the Bond Insurer insuring the payment, when due, of the principal of and
interest on the Bonds as provided therein.
"Interest Payment Date" shall mean each date on which interest is
payable on the Bonds as provided in the forms of the Bonds.
"Moody's" means Moody's Investors Services, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Authority, at the direction of the
Borrower, by notice to the Trustee and the Borrower.
"Mortgage" means the Indenture of Mortgage and Deed of Trust dated as of
May 1, 1921, between the Borrower and the Mortgage Trustee, as heretofore
amended and supplemented and as hereafter amended or supplemented in
accordance with the provisions thereof.
"Mortgage Bonds" means the 1996 Series B First Mortgage Bonds issued by
the Borrower and delivered to the Trustee pursuant to Section 3.7 hereof and
the Mortgage to secure the Borrower's obligation to make the loan payments
and to make payments in respect of the Purchase Price, if applicable, of the
Bonds.
"Mortgage Indentures" means (i) the Mortgage, (ii) that certain First
Mortgage Indenture and Deed of Trust dated as of January 1, 1958, by and
between The Hartford Electric Light Company (which merged with and into the
Borrower as of June 30, 1982) and Old Colony Trust Company (which merged into
First National Bank of Boston by merger effective January 4, 1971), as
trustee, as amended and supplemented, and (iii) any other mortgage indenture
which may hereafter be created so long as such mortgage indenture covers the
property pledged under the indentures named in (i) and (ii) above or
otherwise covers substantially all of the property of the Borrower.
"Mortgage Trustee" means Bankers Trust Company or any successor as the
trustee under the Mortgage.
"Net Proceeds" when used with respect to any insurance or condemnation
award, means the gross proceeds from such award less all expenses (including
attorney's fees and expenses and any extraordinary expenses) incurred in the
collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as in
effect on August 1, 1986.
"Outstanding", when used with reference to a Bond or Bonds, as of any
particular date, means all Bonds which have been authenticated and delivered
under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or
redemption prior to maturity or surrendered to the Trustee for
cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for the
payment or redemption of which there has been separately set aside and
held in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of the
principal or applicable Redemption Price thereof, together with
accrued interest on such Bond to the payment or redemption date,
which payment or redemption date shall be specified in irrevocable
instructions given to the Trustee to apply such monies to such
payment on the date so specified; or
(b) obligations of the kind described in subsection 12.1(A)
of the Indenture in such principal amounts, of such maturities,
bearing such interest and otherwise having such terms and
qualifications as shall be necessary to provide monies in an amount
sufficient to effect payment of the principal or applicable
Redemption Price of such Bond, together with accrued interest on
such Bond to the payment or redemption date, which payment or
redemption date shall be specified in irrevocable instructions
given to the Trustee to apply such obligations to such payment on
the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to the
Paying Agent on the Purchase Date, provided sufficient funds for payment
of the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds shall
have been authenticated and delivered under Article III of the
Indenture; and
(5) any Bond deemed to have been paid as provided in subsection
12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed pursuant
to Section 9.10 of the Indenture (and may include the Trustee), and its
successor or successors and any other corporation which may at any time be
substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the lien
of the Mortgage Indentures, (ii) liens and encumbrances permitted by the
Mortgage Indentures, (iii) liens for taxes not yet due and payable, (iv) any
lien created by this Agreement and the Indenture, (v) utility, access and
other easements and rights-of-way, that will not interfere with or impair the
value or use of the Project as herein provided, (vi) any mechanic's,
laborer's, materialman's, supplier's or vendor's lien or right in respect
thereof if payment is not yet due and payable and for which statutory lien
rights exist, and (vii) such minor defects, irregularities, easements, and,
rights-of-way (including agreements with any railroad the purpose of which is
to service the railroad siding) as normally exist with respect to property
similar in character to the Project and which do not materially impair the
value or use of the property affected thereby for the purpose for which it
was acquired hereunder.
"Plant" means the Millstone 3 nuclear electric generating plant in
Waterford, Connecticut, at which plant the Project is located.
"Principal User" means any principal user of the Project within the
meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954
Code, as applicable, including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who holds the
largest ownership interest in the Project), lessee or user of more than 10%
of the Project measured either by occupiable space or fair rental value under
any formal or informal agreement or, under the particular facts and
circumstances, anyone who is a principal customer of the Project. The term
"principal customer" means any person, who purchases output of the Project
under a contract if the percentage of output taken or to be taken by such
person, multiplied by a fraction the numerator of which is the term of such
contract and the denominator of which is the economic life of the Project,
exceeds 10%. In the case of a person who purchases output of an electric or
thermal energy, gas, water or other similar facility, such person is a
principal customer if the total output purchased by such person during any
one-year period beginning with the date the facility is placed in service is
more than 10 percent of the facility's output during each such period.
Co-owners or co-lessees who are shareholders in a corporation or who are
collectively treated as a partnership subject to subchapter K under section
761(a) of the Code are not treated as Principal Users merely by reason of
their ownership of corporate or partnership interests.
"Project" includes the Project Equipment more fully described in
Appendix A.
"Redemption Price" means, when used with respect to a Bond or a portion
thereof, the principal amount of such Bond or portion thereof plus the
applicable premium, if any, payable upon redemption thereof pursuant to the
Indenture.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut
Nuclear Unit dated as of September 1, 1973, among the Borrower and the other
participants from time to time in ownership of the Millstone 3 nuclear
electric generating plant in Waterford, Connecticut, pertaining to the
ownership, construction and operation of Millstone 3, as such agreement has
been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized and
existing under the laws of the State of New York, its successors and their
assigns and, if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "S&P" shall be
deemed to refer to any other nationally recognized securities rating agency
designated by the Trustee at the direction of the Borrower.
"Standby Bond Purchase Agreement" means, initially, the Standby Bond
Purchase Agreement dated January 23, 1997, and any extensions thereof, among
the Borrower, the Trustee and Societe Generale, New York Branch, as amended
and supplemented, and thereafter upon the issuance of an Alternate Liquidity
Facility, such term shall mean such Alternate Liquidity Facility.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within the
meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954 Code,
as applicable.
"Supplemental Indenture" means any indenture supplemental to the
Indenture or amendatory of the Indenture, adopted by the Authority in
accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds
becomes or became includable in the gross income of the recipient thereof
(other than the Borrower or another Substantial User or Related Person) for
federal income tax purposes for any cause, as determined by a Determination
of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated as
of the date of initial issuance and delivery of the Bonds, among the
Authority, the Borrower and the Trustee, and any amendments and supplements
thereto.
"Term", when used with reference to this Agreement, means the term of
this Agreement determined as provided in Article III hereof.
"Trustee" means Fleet National Bank, and its successor or successors
hereafter appointed in the manner provided in the Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein", "hereunder"
and any similar terms, as used in this Agreement, refer to this
Agreement, and the term "hereafter" means after, and the term
"heretofore" means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the
singular number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations,
partnerships (including limited partnerships), trusts, corporations and
other legal entities, including public bodies, as well as natural
persons.
(4) Any headings preceding the texts of the several Articles and
Sections of this Agreement, and any table of contents appended to copies
hereof, shall be solely for convenience of reference and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
(5) Nothing contained in this Agreement shall be construed to
cause the Borrower to become the agent for the Authority or the Trustee
for any purpose whatsoever, nor shall the Authority or the Trustee be
responsible for any shortage, discrepancy, damage, loss or destruction
of any part of the Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be given
or made by any person or party hereunder shall be at the sole discretion
of the party whose approval, consent or acceptance is required.
(7) All notices to be given hereunder shall be given in writing
within a reasonable time unless otherwise specifically provided.
(8) This Agreement shall be governed by and construed in
accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid by
any court of competent jurisdiction, the invalidity of such provision
shall not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Standby Bond
Purchase Agreement or Alternate Liquidity Facility in effect, upon
receipt by the Trustee of a certificate from the Bank stating that all
amounts payable to the Bank under the Standby Bond Purchase Agreement or
Alternate Liquidity Facility, as the case may be, have been paid in
full, all references to the Bank, the Standby Bond Purchase Agreement or
Alternate Liquidity Facility, as the case may be, in this Agreement, the
Mortgage Bonds, the Indenture, and the Bonds shall be ineffective.
(11) All references herein to the consent or approval of the Bank
shall only be of effect hereunder to the extent that the Standby Bond
Purchase Agreement or Alternate Liquidity Facility is in full force and
effect and the Bank is not in default thereunder.
(12) All references herein to the consent or approval of the Bond
Insurer shall only be of effect hereunder to the extent that the
Insurance Policy is in full force and effect and the Bond Insurer is not
in default thereunder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority
represents and warrants that:
(1) It is a body corporate and politic constituting a public
instrumentality and political subdivision of the State, duly organized
and existing under the laws of the State including the Act. The
Authority is authorized to issue the Bonds in accordance with the Act
and to use the proceeds thereof to finance the Project.
(2) The Authority has complied with the provisions of the Act and
has full power and authority pursuant to the Act to consummate all
transactions contemplated by the Bonds, the Indenture and the Financing
Documents.
(3) By resolution duly adopted by the Authority and still in full
force and effect, the Authority has authorized the execution, delivery
and due performance of the Bonds, the Indenture and the Financing
Documents, and the taking of any and all action as may be required on
the part of the Authority to carry out, give effect to and consummate
the transactions contemplated by this Agreement and the Indenture, and
all approvals necessary in connection with the foregoing have been
received.
(4) The Bonds have been duly authorized, executed, authenticated,
issued and delivered, constitute valid and binding special obligations
of the Authority payable solely from revenues or other receipts, funds
or monies pledged therefor under the Indenture and from any amounts
otherwise available under the Indenture, and are entitled to the benefit
of the Indenture. Neither the State nor any municipality thereof is
obligated to pay the Bonds or the interest thereon. Neither the faith
and credit nor the taxing power of the State nor any municipality
thereof is pledged for the payment of the principal, and premium, if
any, of and interest on the Bonds.
(5) The execution and delivery of the Bonds, the Indenture and
the Financing Documents and compliance with the provisions thereof, will
not conflict with or constitute on the part of the Authority a violation
of, breach of or default under its by-laws or any statute, indenture,
mortgage, deed of trust, note agreement or other agreement or instrument
to which the Authority is a party or by which the Authority is bound,
or, to the knowledge of the Authority, any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Authority or any of its activities or properties, and all consents,
approvals, authorizations and orders of governmental or regulatory
authorities which are required for the consummation by the Authority of
the transactions contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the Indenture,
the Authority will apply the proceeds of the Bonds to the purposes
specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at law
or in equity before or by any court, public board or body pending or
threatened against or affecting the Authority, or to the best knowledge
of the Authority, any basis therefor, wherein an unfavorable decision,
ruling or finding would adversely affect the transactions contemplated
hereby or by the Indenture, or which, in any way, would adversely affect
the validity of the Bonds, or the validity of or enforceability of the
Indenture or the Financing Documents, or any agreement or instrument to
which the Authority is a party and which is used or contemplated for use
in consummation of the transactions contemplated hereby and by the
Indenture.
(8) It has not made any commitment or taken any action which will
result in a valid claim for any finders or similar fees or commitments
in respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax
Regulatory Agreement are by this reference incorporated in this
Agreement as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the Sharing
Agreement, the Borrower is the owner of a 52.933% undivided interest in the
Millstone 3 nuclear electric generating plant in Waterford, Connecticut, at
which the Project is located. The Sharing Agreement designates the Borrower
as one of two lead participants and, together with such other lead
participant, the Borrower has sole responsibility for operation and
maintenance of Millstone 3, subject to the provisions of the Sharing
Agreement. Every obligation of the Borrower hereunder with respect to the
Project (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations set
forth in this Section, to exercise all rights granted to it pursuant to the
Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower represents
and warrants that:
(1) The Borrower has been duly incorporated and validly exists as
a corporation in good standing under the laws of the State of
Connecticut, is not in violation of any provision of its certificate of
incorporation or its by-laws, has corporate power to enter into and
perform the Financing Documents, and by proper corporate action has duly
authorized the execution and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally binding
obligations of the Borrower, enforceable in accordance with their
respective terms, except to the extent that such enforceability may be
limited by bankruptcy or insolvency or other laws affecting creditors'
rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing Documents,
the consummation of the transactions contemplated thereby, nor the
fulfillment by the Borrower of or compliance by the Borrower with the
terms and conditions thereof is prevented or limited by or conflicts
with or results in a breach of, or default under the terms, conditions
or provisions of any contractual or other restriction of the Borrower,
evidence of its indebtedness or agreement or instrument of whatever
nature to which the Borrower is now a party or by which it is bound, or
constitutes a default under any of the foregoing. No event has occurred
and no condition exists which, upon the execution and delivery of any
Financing Documents, constitutes an Event of Default hereunder or an
event of default thereunder or, but for the lapse of time or the giving
of notice, would constitute an Event of Default hereunder or an event of
default thereunder.
(4) There is no action or proceeding pending or, to the knowledge
of the Borrower, threatened against the Borrower before any court,
administrative agency or arbitration board that will materially and
adversely affect the ability of the Borrower to perform its obligations
under the Financing Documents except as disclosed in the Disclosure
Documents; and all authorizations, consents and approvals of
governmental bodies or agencies required in connection with the
execution and delivery of the Financing Documents and in connection with
the performance of the Borrower's obligations hereunder or thereunder
have been obtained.
(5) The execution, delivery and performance of the Financing
Documents and any other instrument delivered by the Borrower pursuant to
the terms hereof or thereof are within the corporate powers of the
Borrower and have been duly authorized and approved by the board of
directors of the Borrower and are not in contravention of law or of the
Borrower's certificate of incorporation or by-laws, as amended to date,
or of any undertaking or agreement to which the Borrower is a party or
by which it is bound.
(6) The Borrower represents that it has not made any commitment or
taken any action which will result in a valid claim for any finders' or
similar fees or commitments in respect of the transactions described in
this Agreement other than the fees to various parties to the
transactions contemplated hereby which have been heretofore paid or
provided.
(7) The Project is included within the definition of a "project"
in the Act, and its estimated cost is equal to or in excess of
$61,300,000. The Borrower intends the Project to be and continue to be
an authorized project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory
Agreement are eligible costs of a project financed by bonds issued by
the Authority under the Act, and may be financed by amounts in the
Project Fund under the Indenture. None of the proceeds of the Bonds
will be used directly or indirectly as working capital or to finance
inventory.
(9) The Project is in compliance with all applicable federal,
State and local laws and ordinances (including rules and regulations)
relating to zoning, building, safety and environmental quality the
non-compliance with which would materially adversely affect the
performance by the Borrower of any of its obligations hereunder.
(10) Except as described in the Disclosure Documents, the Borrower
has obtained all necessary material approvals from any and all
governmental agencies requisite to the Project, and has also obtained
all material occupancy permits and authorizations from appropriate
authorities authorizing the occupancy and use of the Project for the
purposes contemplated hereby. The Borrower further represents and
warrants that it has completed the Project in accordance with all
material federal, State and local laws, ordinances and regulations
applicable thereto.
(11) The availability of financial assistance from the Authority as
provided herein and in the Indenture has induced the Borrower to locate
the Project in the State. The Borrower does not presently intend to
lease the Project.
(12) The Borrower will not take or omit to take any action which
action or omission will in any way cause the proceeds of the Bonds to be
applied in a manner contrary to that provided in the Indenture and the
Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and
knows of no action that any other person, firm or corporation has taken
or intends to take, which would cause interest on the Bonds to be
includable in the gross income of the recipients thereof for federal
income tax purposes. The representations, certifications and statements
of reasonable expectation made by the Borrower in the Tax Regulatory
Agreement and relating to Project description, composite issues, bond
maturity and average asset economic life, use of Bond proceeds,
arbitrage and related matters are hereby incorporated by this reference
as though fully set forth herein.
(14) The Borrower has good and marketable or good and merchantable
title to the Project subject only to Permitted Encumbrances and to
irregularities or defects in title which may exist which do not
materially impair the use of such properties in the Borrower's business.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in
accordance with the terms of this Agreement, the Authority agrees to make a
loan to the Borrower from the proceeds of the Bonds in the amount of
$62,000,000 and the Borrower agrees to borrow such amount from the Authority.
(B) The loan shall be made at the time of delivery of the Bonds
and receipt of payment therefor by the Authority against receipt by the
Authority of the Note (as such term is defined in the Original Loan
Agreement) duly executed and delivered to evidence the pecuniary indebtedness
of the Borrower hereunder. As and for the loan the Authority shall apply the
proceeds of the Bonds as provided in the Indenture on the terms and
conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than 10:00
A.M. on the date on which such payment of principal (including principal
called for redemption) of, premium, if any, or interest on Bonds shall become
due in an amount equal to the payment then coming due on such Bonds less the
amounts, if any, then held in the Debt Service Fund and available to pay the
same. The Borrower may make payments to the Debt Service Fund earlier than
required by this section, but such payments shall not affect the accrual of
interest. In addition, the Borrower shall pay to the Trustee, as and when
the same shall become due, all other amounts due under the Financing
Documents, together with interest thereon at the then applicable rate as set
forth herein in Section 6.2(G). The Borrower shall have the option to prepay
its loan obligation in whole or in part at the times and in the manner
provided in Article VIII hereof.
(D) The payments to be made under Section 3.1(C) shall be
appropriately adjusted to reflect the date of issue of Bonds, accrued
interest deposited in the Debt Service Fund, if any, and any purchase or
redemption of Bonds so that there will be available on each payment date the
amount necessary to pay the interest and principal due or coming due on the
Bonds and so that accrued interest will be applied to the installments of
interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the
Borrower shall also have a continuing obligation to pay to the Trustee for
deposit in the Debt Service Fund an amount equal to interest on the overdue
principal but the installment payments required under this section shall not
otherwise bear interest. Redemption premiums shall not bear interest.
(F) In the event the Borrower should fail to make any of the
payments required under the foregoing provisions of this Section 3.1, the
item or installment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid, and the
Borrower agrees to pay or cause to be paid the same with interest thereon at
the rate determined in accordance with Article II of the Indenture until paid
in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further
expressly agrees to pay to the Trustee as and when the same shall become due,
(i) an amount equal to the initial and annual fees of the Trustee for the
ordinary services of the Trustee rendered and its ordinary expenses incurred
under the Indenture, including fees and expenses as Paying Agent and the fees
and expenses of Trustee's counsel, including fees and expenses as registrar
and in connection with preparation and delivery of new Bonds upon exchanges
or transfers, (ii) the reasonable fees and expenses of the Trustee and any
Paying Agents on the Bonds for acting as paying agents as provided in the
Indenture, including fees and expenses of the Paying Agent as registrar and
in connection with the preparation of new Bonds upon exchanges, transfers or
redemptions, (iii) the reasonable fees and expenses of the Bank and the
Remarketing Agent for the performance of their duties as provided in the
Indenture, including the reasonable fees of their counsel and other expenses
the Remarketing Agent may incur in providing for accurate offering documents
in connection therewith, (iv) the reasonable fees and charges of the Trustee
for extraordinary services rendered by it and extraordinary expenses incurred
by it under the Indenture, including reasonable counsel fees and expenses,
and (v) fees and expenses of Bond Counsel and the Authority for any future
action requested of either.
(B) For so long as the Bonds remain Outstanding, the Borrower also
agrees to pay directly to the Authority on each anniversary date of the date
of issuance of the Bonds a fee equal to one-sixteenth (1/16) of 1% of the
outstanding principal amount of the Bonds, such fee to be payable, without
notice, demand or invoice of any kind, at the Authority's address as set
forth herein or at such other address and to the attention of such other
person, or to such account, as the Authority may stipulate by written notice
to the Borrower.
(C) The Borrower also agrees to pay all amounts payable by it
under the Financing Documents at the time and in the manner therein provided.
(D) The Borrower also agrees to pay all Rebate Amounts (and
penalties, if any) due to the United States of America pursuant to Section
148 of the Code.
Section 3.3. Manner of Payment. The payments provided for in Section
3.1 hereof shall be made by any reasonable method providing immediately
available funds at the time and place of payment directly to the Trustee for
the account of the Authority and shall be deposited in the Debt Service Fund.
The additional payments provided for in Section 3.2 shall be made in the same
manner directly to the entitled party or to the Trustee for its own use or
disbursement to the Paying Agent, as the case may be.
Section 3.4. Obligation Unconditional. The obligations of the
Borrower under the Financing Documents shall be absolute and unconditional,
irrespective of any defense or any rights of setoff, recoupment or
counterclaim it might otherwise have against the Authority or the Trustee.
The Borrower will not suspend or discontinue any such payment or terminate
this Agreement (other than in the manner provided for hereunder) for any
cause, including, without limiting the generality of the foregoing, any acts
or circumstances that may constitute failure of consideration, failure of
title, or commercial frustration of purpose, or any damage to or destruction
of the Project, or the taking by eminent domain of title to or the right of
temporary use of all or any part of the Project, or any change in the tax or
other laws of the United States, the State or any political subdivision of
either thereof, or any failure of the Authority or the Trustee to perform and
observe any agreement or covenant, whether expressed or implied, or any duty,
liability or obligation arising out of or connected with the Financing
Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the
Borrower and the Borrower acknowledges that, among other things, the
Borrower's loan payments and all of the Authority's right, title and interest
under the Financing Documents to which it is a party (except its rights under
Section 6.2 hereof) are being concurrently with the execution and delivery
hereof endorsed, pledged and assigned without recourse by the Authority to
the Trustee as security for the Bonds as provided in the Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently with
the execution and delivery of the Original Loan Agreement sold and delivered
the Bonds under and pursuant to a resolution adopted by the Authority on
April 17, 1996, authorizing their issuance under and pursuant to the
Indenture. The proceeds of sale of the Bonds shall be applied as provided in
Articles IV and V of the Indenture.
Section 3.7. Issuance, Delivery and Surrender of Mortgage Bonds. In
order to provide the benefit of a first mortgage lien to secure the
obligation of the Borrower to make the loan payments and Purchase Price
payments with respect to the Bonds, concurrently with the execution hereof,
the Borrower shall issue and deliver to the Trustee the Mortgage Bonds. The
Mortgage Bonds shall be issued in an aggregate principal amount equal to the
aggregate principal amount of the Bonds issued and delivered by the
Authority, have the same final maturity date as the Bonds and shall bear
interest at a rate equal to the rate of the Bonds. Upon payment of the
principal of and premium, if any, on any of the Bonds and payment of all
accrued interest in connection therewith, whether at maturity or prior to
maturity by redemption or otherwise, or upon provision for the payment
thereof having been made in accordance with Section 12.1 of the Indenture,
Mortgage Bonds in an aggregate principal amount equal to the aggregate
principal amount of the Bonds so paid, or for the payment of which such
provision has been made, shall be deemed fully paid and the obligations of
the Borrower thereunder terminated as provided in the Mortgage and shall be
surrendered by the Trustee to the Mortgage Trustee for cancellation. The
Trustee shall promptly notify the Mortgage Trustee by telephone, confirmed in
writing, of any such payment on the Bonds. In accordance with the terms
thereof, the Mortgage Bonds shall be issued to and registered in the name of
the Trustee and shall not be sold, assigned, pledged or transferred, except
to effect transfer to any successor Trustee under the Indenture.
Section 3.8. Redemption of Mortgage Bonds. The Borrower covenants
that it will not redeem Mortgage Bonds pursuant to the Mortgage, and it will
not take such action as will result in the Mortgage Trustee or the Borrower
being under any obligation to redeem any Mortgage Bonds, except as may be
permitted by this Agreement and the Indenture.
Section 3.9. Effective Date and Term. (A) This Agreement shall become
effective upon its execution and delivery by the parties hereto, shall remain
in full force from such date and, subject to the provisions hereof (including
particularly Articles VII and VIII), shall expire on such date as the
Indenture shall be discharged and satisfied in accordance with the provisions
of subsection 12.1(A) thereof. The Borrower's obligations under Sections 6.2
and 6.3 hereof, however, shall survive the expiration of this Agreement.
(B) Within 60 days of such expiration the Authority shall deliver
to the Borrower any documents and take or cause the Trustee, at the
Borrower's expense, to take any such reasonable actions as may be necessary
to effect the cancellation, release and satisfaction of the Indenture and the
Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section 5.8(F)
of the Indenture, if the amount received by the Paying Agent from demands
made under the Standby Bond Purchase Agreement and deposited with the Paying
Agent, together with all other amounts (including remarketing proceeds)
received by the Paying Agent for the purchase of Bonds supported by a Standby
Bond Purchase Agreement and tendered pursuant to Section 2.3(G)(1)(c) or (d),
2.3(G)(2)(c) or 2.3(G)(3)(c) or (d) of the Indenture, is not sufficient to
pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent
shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the
Remarketing Agent and the Trustee of such deficiency by telephone promptly
confirmed in writing. The Borrower shall pay to the Paying Agent in
immediately available funds by 4:00 P.M. on the Purchase Date an amount equal
to the Purchase Price of such Bonds less the amount, if any, available to pay
the Purchase Price in accordance with Section 9.18 of the Indenture from the
proceeds of the remarketing of such Bonds or from demands made under a
Standby Bond Purchase Agreement, as reported by the Paying Agent. Bonds so
purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Standby Bond Purchase Agreement. The Borrower has
arranged, concurrently with the execution hereof, for the delivery of the
Standby Bond Purchase Agreement having an initial term expiring 364 days from
the date of delivery, and providing for the Paying Agent to be entitled to
demand on or prior to the Stated Expiration Date (as defined therein), an
amount that is not less than the sum of that portion of the purchase price
corresponding to principal of the Outstanding Bonds and that portion of the
purchase price corresponding to interest on such Bonds. If at any time the
Borrower shall obtain actual knowledge that the senior unsecured short-term
debt of the issuer of the Standby Bond Purchase Agreement is rated below "A-
1" by S&P or "P-1" by Moody's, then the Borrower shall, within 120 days of
obtaining such actual knowledge, arrange for the delivery of an Alternate
Liquidity Facility satisfying the requirements of Section 3.12(B) hereof.
Section 3.12. Substitution or Replacement of Standby Bond Purchase
Agreement. (A) Upon satisfaction of the requirements set forth in, and
subject to the requirements of, this Section 3.12, the Borrower may provide
for an Alternate Liquidity Facility or replace a Standby Bond Purchase
Agreement or Alternate Liquidity Facility then in effect with an Alternate
Liquidity Facility. The approval by the Borrower of an assignment of all or
a part of a Bank's commitment under the Standby Bond Purchase Agreement or an
Alternate Liquidity Facility shall be deemed the replacement of the Standby
Bond Purchase Agreement or an Alternate Liquidity Facility, as the case may
be, for the purposes of this Section 3.12. In no event, however, shall the
Standby Bond Purchase Agreement being replaced be terminated or released
until (1) the Borrower has given not less than forty-five (45) days' written
notice to the Trustee, the Paying Agent and the Remarketing Agent, and the
Paying Agent has received the proceeds of all outstanding demands on the
Standby Bond Purchase Agreement being replaced, and (2) if any Bonds
supported by the Standby Bond Purchase Agreement being replaced are in the
Daily Mode or the Weekly Mode, until the Paying Agent has given not less than
thirty (30) days' written notice of the termination or release of the Standby
Bond Purchase Agreement to owners of such Bonds in the Daily Mode or the
Weekly Mode and (3) if any of the Bonds supported by the Standby Bond
Purchase Agreement being replaced are in the Flexible Mode, earlier than on
the second Business Day after an Effective Date for all such Bonds supported
by the Standby Bond Purchase Agreement. If a notice of mandatory tender for
purchase required by the Form of the Daily Mode Bond or the Weekly Mode Bond
is given as a result of the substitution of an Alternate Liquidity Facility
for an existing Standby Bond Purchase Agreement which causes a withdrawal,
suspension or reduction in the rating of the Bonds by either Moody's or S&P,
then the Trustee shall not accept an Alternate Liquidity Facility during the
period between the giving of such notice and the Purchase Date.
Prior to the provision of an Alternate Liquidity Facility or the
replacement of any Standby Bond Purchase Agreement, the Borrower shall have
delivered to the Trustee and the Paying Agent: (i) an opinion of counsel for
the issuer of the Alternate Liquidity Facility to the effect that it
constitutes a legal, valid and binding obligation of the issuer enforceable
in accordance with its terms; (ii) an opinion of Bond Counsel, counsel for
the issuer of the Alternate Liquidity Facility, counsel for the Borrower or
counsel for the Trustee to the effect that the Alternate Liquidity Facility
meets the requirements of this Section 3.12; and (iii) a certificate of the
Bank that all amounts due under the Standby Bond Purchase Agreement have been
paid and that the Borrower has fulfilled all its obligations arising out of
such agreement.
(B) Notwithstanding anything to the contrary contained herein,
each Alternate Liquidity Facility must:
(i) be on terms no less favorable to the Borrower than the Standby
Bond Purchase Agreement, in the case of a substitution or replacement
thereof, and entitle the Paying Agent to draw upon or demand payment and
receive in immediately available funds an amount equal to the sum of the
principal amount of Bonds supported by the Alternate Liquidity Facility,
any premium applicable thereto, and forty-five (45) days' accrued
interest at the Maximum Interest Rate on the principal amount of Bonds
then outstanding in the Daily Mode, the Flexible Mode or the Weekly
Mode;
(ii) provide for a term which may not expire in less than 360 days
and which may not expire or be terminated prior to the fifth Business
Day after the mandatory tender for purchase as provided in Section
2.3(G)(1)(d), 2.3(G)(2)(c) or 2.3(G)(3)(d) of the Indenture;
(iii) support all Bonds in the same Mode; and
(iv) be the obligation of an issuer whose senior unsecured short-
term debt is rated at least "A-1" by S&P and "P-1" by Moody's.
(C) At its option, the Borrower may at any time terminate the
Standby Bond Purchase Agreement for all or part of the Bonds without making
provision for an Alternate Liquidity Facility, provided that (1) the Borrower
has given not less than forty-five (45) days' written notice to the Trustee,
the Paying Agent and the Remarketing Agent, and the Paying Agent has received
the proceeds of all outstanding demands on the Standby Bond Purchase
Agreement being terminated, and (2) if any Bonds supported by the Standby
Bond Purchase Agreement being terminated are in the Daily Mode or the Weekly
Mode, the Paying Agent has given not less than thirty (30) days' written
notice of the termination of the Standby Bond Purchase Agreement to owners of
such Bonds in the Daily Mode or the Weekly Mode and (3) if any of the Bonds
supported by the Standby Bond Purchase Agreement being replaced are in the
Flexible Mode, the Standby Bond Purchase Agreement shall in no event be
terminated earlier than on the second Business Day after an Effective Date
for all such Bonds supported by the Standby Bond Purchase Agreement.
Prior to the termination of any Standby Bond Purchase Agreement pursuant
to the provisions of this Section 3.12(C), the Borrower shall have delivered
to the Trustee and the Paying Agent the written consent from the Bond Insurer
to such termination of the Standby Bond Purchase Agreement.
Section 3.13. Securities Laws. In any remarketing of Bonds under this
Agreement, the Borrower shall at all times comply with applicable federal and
state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if at
any time it becomes necessary or desirable to have a Paying Agent capable of
performing in New York, New York, it shall remove Fleet National Bank as
Paying Agent and a successor shall be appointed pursuant to Section 9.11 of
the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents
and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs and
expenses in connection with the preparation of the Financing Documents and
the Indenture, the preparation and delivery of any legal instruments and
documents necessary in connection therewith and their filing and recording,
if required, and all taxes and charges payable in connection with any of the
foregoing. Such costs and all other costs of the Project shall be paid by
the Borrower or from the Project Fund in the manner and to the extent
provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost of
Project. Neither the Authority, nor the Trustee, nor any Bondholder makes
any warranty, either expressed or implied, as to the Project or its condition
or that it will be suitable for the Borrower's purposes or needs, or that the
insurance required hereunder will be adequate to protect the Borrower's
business or interest, or that the proceeds of the Bonds will be sufficient to
finance the Project.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter be
lawfully assessed or levied upon the Project or any part thereof, or upon the
rents, issues, or profits thereof, whether directly or indirectly. With
respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid during
the Term.
(B) The Borrower may, at its expense and in its own name, in good
faith contest any such taxes, assessments and other charges and payments in
lieu of taxes including assessments and, in the event of such contest, may
permit the taxes, assessments or other charges or payments in lieu of taxes,
including assessments so contested to remain unpaid, provided prior written
notice thereof has been given to the Trustee and reserves to the extent
required by the Reimbursement Agreement are maintained, during the period of
such contest and any appeal therefrom. Nothing herein shall preclude the
Borrower, at its expense and in its own name and behalf, from applying for
any tax exemption allowed by the federal government, the State or any
political or taxing subdivision thereof under any existing or future
provision of law which grants or may grant such tax exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project
against loss or damage by fire, flood, lightning, windstorm, vandalism and
malicious mischief and other hazards, casualties, contingencies and extended
coverage risks in such amounts and in such manner as is required by
applicable federal or state law and shall pay when due the premiums thereon.
(B) The Borrower further agrees that it will at all times carry
public liability insurance with respect to the Project to the extent required
by applicable federal or state law.
(C) As an alternative to the hazard insurance and public liability
insurance requirements of subsections (A) or (B) above the Borrower may
self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be
effected under overall blanket or excess coverage policies of the Borrower or
any affiliate and may be carried with any insurer other than an unauthorized
insurer under the Connecticut Unauthorized Insurers Act. The Borrower shall
furnish evidence satisfactory to the Authority or the Trustee, promptly upon
the request of either, that the required insurance coverage is valid and in
force.
Section 4.5. Compliance with Law. The Borrower will observe and
comply with all material laws, regulations, ordinances, rules, and orders
(including without limitation those relating to zoning, land use,
environmental protection, air, water and land pollution, wetlands, health,
equal opportunity, minimum wages, worker's compensation and employment
practices) of any federal, state, municipal or other governmental authority
relating to the Project except during any period during which the Borrower at
its expense and in its name shall be in good faith contesting its obligation
to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the Borrower
will keep and maintain or cause the Project to be kept and maintained in
accordance with sound utility operating practice and in good condition,
working order and repair, will not commit or suffer any waste thereon, and
will make all material repairs and replacements thereto which may be required
in connection therewith. Nothing in this Section 4.6 shall (1) apply to any
portion of the Project beyond its useful or economic life or (2) apply to the
use and disposition by the Borrower of any part of the Project in the
ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project shall
be damaged or either partially or totally destroyed, or if title to or the
temporary use of the whole or any part thereof shall be taken or condemned by
a competent authority for any public use or purpose, there shall be no
abatement or reduction in the amounts payable by the Borrower hereunder and
the Borrower shall continue to be obligated to make such payments. In any
such case the Borrower shall promptly give written notice thereof to the
Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or
Destruction. In the event of any such condemnation, damage or destruction
the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage
Indentures and the Sharing Agreement concerning the repair,
reconstruction or restoration of the Project or give notice to the
Authority and the Trustee of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its option
to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or Condemnation.
The Net Proceeds from any insurance or condemnation award with respect to the
Project shall be applied as provided in the Mortgage Indentures, or, in the
event that the Mortgage Indentures have been discharged or are no longer in
effect, shall be applied at the direction of the Borrower with the approval
of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence;
Conditions under which Exceptions Permitted. (A) The Borrower covenants and
agrees that, during the Term of this Agreement it will maintain its corporate
existence, will continue to be a corporation either organized under the laws
of or duly qualified to do business as a foreign corporation in the State and
in all jurisdictions necessary in the operation of its business, will not
dissolve or otherwise dispose of all or substantially all of its assets and
will not consolidate with or merge into another corporation or permit one or
more other corporations to consolidate with or merge into it.
(B) The Borrower may, however, without violating the agreements
contained in this Section, consolidate with or merge into another corporation
or permit one or more other corporations to consolidate with or merge into
it, or sell or otherwise transfer to another corporation all or substantially
all of its assets as an entity and thereafter liquidate or dissolve, if (a)
the Borrower is the surviving, resulting or transferee corporation, as the
case may be, or (b) in the event the Borrower is not the surviving, resulting
or transferee corporation, as the case may be, such corporation (i) is a
solvent corporation either organized under the laws of or duly qualified to
do business as a foreign corporation subject to service of process in the
State and (ii) assumes in writing all of the obligations of the Borrower
herein, and under the Mortgage Bonds.
Section 6.2. Indemnification, Payment of Expenses, and Advances. (A)
The Borrower agrees to protect, defend and hold harmless the Trustee, the
Paying Agent, the Authority, the State, agencies of the State and the
members, servants, agents, officers, employees and directors of the Trustee,
the Paying Agent, the Authority or the State (the "Indemnified Parties"),
from any claim, demand, suit, action or other proceeding and any liabilities,
costs, and expenses whatsoever by any person or entity whatsoever, arising or
purportedly arising from or in connection with the Financing Documents, the
Indenture, the Bonds, or the transactions contemplated thereby or actions
taken thereunder by any person (including without limitation the filing of
any information, form or statement with the Internal Revenue Service), except
for any wilful and material misrepresentation, wilful misconduct or gross
negligence on the part of the Indemnified Parties and except for any bad
faith on the part of any Indemnified Party other than the Authority.
The Borrower agrees to indemnify and hold harmless any Indemnified Party
against any and all claims, demands, suits, actions or other proceedings and
all liabilities, costs and expenses whatsoever caused by any untrue statement
or misleading statement or alleged untrue statement or alleged misleading
statement of a material fact contained in the written information provided by
the Borrower in connection with the issuance of the Bonds or incorporated by
reference therein or caused by any omission or alleged omission from such
information of any material fact required to be stated therein or necessary
in order to make the statements made therein in the light of the
circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any
damage or injury to the persons or property of the Borrower or its members,
directors, officers, agents, servants or employees, or any other person who
may be about the Project due to any act or omission of any person other than
the Authority or the Trustee or their respective members, directors,
officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees that
no Indemnified Party shall be liable for, and agrees to hold each Indemnified
Party harmless against, any attorney fees and expenses, expenses or damages
incurred because of any investigation, review or lawsuit commenced by the
Trustee or the Authority in good faith with respect to the Financing
Documents, the Indenture, the Bonds and the Project Realty and the Project
Equipment, and the Authority or the Trustee shall promptly give written
notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee contained herein shall be deemed
to be the covenants, stipulations, promises, agreements and obligations of
the Authority and the Trustee and not of any member, director, officer or
employee of the Authority or the Trustee in its individual capacity, and no
recourse shall be had for the payment of the Bonds or for any claim based
thereon or hereunder against any member, director, officer or employee of the
Authority or the Trustee or any natural person executing the Bonds.
(E) In case any action shall be brought against one or more of the
Indemnified Parties based upon any of the above and in respect of which
indemnity may be sought against the Borrower, such Indemnified Party shall
promptly notify the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any such action shall
not relieve it of any liability which it may have to any Indemnified Party
otherwise than under this Section 6.2. In case any such action shall be
brought against any Indemnified Party and it shall notify the Borrower of the
commencement thereof, the Borrower shall be entitled to participate in and,
to the extent that it shall wish, to assume the defense thereof with counsel
satisfactory to such Indemnified Party, and after notice from the Borrower to
such Indemnified Party of the Borrower's election so to assume the defense
thereof, the Borrower shall not be liable to such Indemnified Party for any
subsequent legal or other expenses attributable to such defense, except as
set forth below, other than reasonable costs of investigation subsequently
incurred by such Indemnified Party in connection with the defense thereof.
The Indemnified Party shall have the right to employ its own counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (i) the employment of counsel by
such Indemnified Party has been authorized by the Borrower; (ii) the
Indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the Borrower and the Indemnified Party in the
conduct of the defense of such action (in which case the Borrower shall not
have the right to direct the defense of such action on behalf of the
Indemnified Party); or (iii) the Borrower shall not in fact have employed
counsel reasonably satisfactory to the Indemnified Party to assume defense of
such action; provided, however, that Borrower shall not be responsible for
the fees and expenses of more than one such law firm unless an Indemnified
Party shall have reasonably concluded that there may be a conflict of
interest between such Indemnified Party and any other Indemnified Party
requiring the use of separate counsel, or Borrower has not employed counsel
which is satisfactory to each Indemnified Party. The Borrower shall not be
liable for any settlement of any action or claim effected without its
consent.
(F) The Borrower also agrees to pay all reasonable or necessary
out-of-pocket expenses of the Authority in connection with the issuance of
the Bonds, the administration of the Financing Documents and the enforcement
of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or perform
any act under the Financing Documents, the Trustee or the Authority may pay
the amount or perform the act, in which event the costs, disbursements,
expenses and reasonable counsel fees and expenses thereof, together with
interest thereon from the date the expense is paid or incurred at the prime
interest rate generally prevailing among banks in the State on the date of
the advance plus 1% shall be an additional obligation hereunder payable upon
demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority against
the Borrower irrespective of any action taken by or on behalf of the owners
of the Bonds.
(I) The obligations of the Borrower under this section,
notwithstanding any other provisions contained in the Financing Documents,
shall survive the termination of this Agreement and shall be recourse to the
Borrower, and for the enforcement thereof any Indemnified Party shall have
recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments Upon
Taxability. (A) For purpose of this Section, the term owner means the
Beneficial Owner of the Bonds so long as the Book-Entry System is in effect.
(B) The representations, warranties, covenants and statements of
expectation of the Borrower set forth in the Tax Regulatory Agreement are by
this reference incorporated in this Agreement as though fully set forth
herein.
(C) If any owner of the Bonds receives from the Internal Revenue
Service a notice of assessment and demand for payment with respect to
interest on any Bond (except a notice and demand based upon the assertion
that the owner of the Bonds is a Substantial User or Related Person), an
appeal may be taken by the owner of the Bonds at the option of the Borrower.
Without limiting the generality of the foregoing, the Borrower shall have the
right to direct the Trustee to direct the owner of the Bonds to take such
appeal or not to take such appeal. In either case all expenses of the appeal
including reasonable counsel fees and expenses shall be paid by the Borrower,
and the owner of the Bonds and the Borrower shall cooperate and consult with
each other in all matters pertaining to any such appeal, except that no owner
of the Bonds shall be required to disclose or furnish any non-publicly
disclosed information, including, without limitation, financial information
and tax returns.
(D) Not later than 90 days following a Determination of
Taxability, the Borrower shall pay to the Trustee an amount sufficient, when
added to the amount then in the Debt Service Fund and available for such
purpose, to retire and redeem all Bonds then Outstanding, in accordance with
Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments provided
for in this Section shall be absolute and unconditional, and the failure of
the Authority or the Trustee to execute or deliver or cause to be executed or
delivered any documents or to take any action required under this Agreement
or otherwise shall not relieve the Borrower of its obligation under this
Section. Notwithstanding any other provision of this Agreement or the
Indenture, the Borrower's obligations under this Section shall survive the
termination of this Agreement and the Indenture.
(F) [Reserved].
(G) The occurrence of a Determination of Taxability shall not be
an Event of Default hereunder but shall require only the performance of the
obligations of the Borrower stated in this Section, the breach of which shall
constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority
shall, upon (1) the release of a published Revenue Ruling by the Internal
Revenue Service and the receipt by the Authority of an opinion of Bond
Counsel to the effect that such ruling may adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes, and
(2) receipt from the Borrower, within 30 days after the Authority has mailed
copies of such ruling and such opinion to the Borrower, of a written request
to proceed in accordance with this Section, proceed to apply for and use its
best efforts to obtain a ruling from the Internal Revenue Service, pursuant
to Revenue Procedure 96-16 or any other procedures subsequently established
by the Internal Revenue Service, as to the qualification or continued
qualification of interest on the Bonds for exclusion from gross income for
federal income tax purposes. The Authority and the Borrower shall cooperate
and consult with each other in all matters pertaining to such ruling request.
All expenses of the Authority in connection with such application including
reasonable counsel fees shall be paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees that
it shall promptly notify the Authority and the Trustee upon the occurrence of
any of the following events, in each case, whether as a result of a
determination by the Borrower, the Connecticut Department of Public Utility
Control or the United States Nuclear Regulatory Commission or its successors,
(1) Abandonment of a substantial portion of the Project at
any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's
ownership interest in the Project other than (i) to a
company which is part of Northeast Utilities, (ii) in
connection with a merger, consolidation, or sale of
assets permitted by Section 6.1(B) hereof, (iii) in
connection with any form of financing (including without
limitation the grant of a mortgage or security interest
or sale in connection with a sale and lease back) by the
Borrower, (iv) in any case in which the remaining
aggregate ownership interest of Northeast Utilities is
greater than 50 percent, (v) of any portion of the
Project beyond its useful or economic life, or (vi) in
the ordinary course of the Borrower's business. For
purposes of this paragraph, "Northeast Utilities" means
Northeast Utilities, its subsidiaries (whether direct or
indirect) and their successors and assigns; or
(3) Any determination, following damage or destruction of all
or substantially all of the Project, not to repair,
reconstruct, relocate or replace the Project.
(B) In the event that the Authority receives notice from the
Borrower of the occurrence of any event described in subsection (A) of this
Section 6.4, the Borrower agrees that the Authority may, not later than one
year after the receipt of such notice from the Borrower, declare that payment
of all amounts due under the Financing Documents shall be accelerated by
notice to the Borrower and the Trustee stating that such amounts are due and
payable by the Borrower in full on a date selected by the Borrower and set
forth in a notice to the Trustee and the Authority, which date shall be not
later than three years from the date of mailing of the Authority's
acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the provisions
of this Section shall be subject to the provisions of Section 7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The
Authority and the Borrower agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for correcting any inadequate or incorrect description of the
Project Realty or Project Equipment or for carrying out the intention of or
facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture.
The Borrower covenants and agrees that it will comply with the provisions of
the Indenture with respect to the Borrower and that the Trustee and the
Bondholders shall have the power and authority provided in the Indenture.
The Borrower further agrees to aid in the furnishing to the Authority or the
Trustee of opinions that may be required under the Indenture. The Borrower
covenants and agrees that the Trustee shall be entitled to and shall have all
the rights, including the right to enforce against the Borrower the
provisions of the Financing Documents, pertaining to the Trustee
notwithstanding the fact that the Trustee is not a party to the Financing
Documents.
Section 6.7. Assignment of Agreement or Mortgage Bonds. (A) The
Borrower may not assign its rights, interests or obligations hereunder or
under the Mortgage Bonds except as may be permitted pursuant to Section
6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer any
of the Financing Documents or the revenues and other receipts, funds and
monies to be received thereunder during the Term except to the Trustee as
provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly
authorized agents shall have (1) the right at all reasonable times to enter
upon and to examine and inspect the Project and (2) such rights of access
thereto as may be reasonably necessary for the proper maintenance and repair
thereof in the event of failure by the Borrower to perform its obligations
under this Agreement, subject, in each case, to all applicable laws, rules,
regulations, orders and guidelines. The Authority and the Trustee shall also
be permitted, at all reasonable times, to examine the books and records of
the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after
becoming aware of any condition or event which constitutes, or with the
giving of notice or the passage of time would constitute, an Event of Default
or an "Event of Default" under Section 8.1 of the Indenture, the Borrower
shall deliver to the Authority, the Bank, if any, the Remarketing Agent, the
Paying Agent and the Trustee a notice stating the existence and nature
thereof and specifying the corrective steps, if any, the Borrower is taking
with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in the
performance of this Agreement will not discriminate or permit discrimination
against any person or group of persons on the grounds of race, color,
religion, national origin, age, sex, sexual orientation, marital status,
physical or learning disability, political beliefs, mental retardation or
history of mental disorder in any manner prohibited by the laws of the United
States or of the State.
(B) The Borrower will comply with the provisions of the resolution
adopted by the Authority on June 14, 1977, as amended, and the policy of the
Authority implemented pursuant thereto concerning the promotion of equal
employment opportunity through affirmative action plans. The resolution
requires that all borrowers receiving financial assistance from the Authority
adopt and implement an affirmative action plan prior to the closing of the
loan. The plan shall be updated annually as long as the Bonds remain
Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees that
it shall in all instances act in good faith in incurring costs, expenses and
legal fees in connection with the transactions contemplated by this Agreement
and the Indenture.
Section 6.12. Bond Insurer Notice Provisions. (A) While the Insurance
Policy is in effect, the Borrower shall furnish to the Bond Insurer (the
attention of the Surveillance Department, unless otherwise indicated):
(a) as soon as practicable after the filing thereof, a copy of each of
the Borrower's Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K filed with the
Securities and Exchange Commission; and
(b) such additional information it may reasonable request.
(B) The Borrower will permit the Bond Insurer to discuss the affairs,
finances and accounts of the Borrower or any information the Bond Insurer may
reasonably request regarding the security for the Bonds with appropriate
officers of the Borrower. The Borrower will, subject to the provisions of
applicable law, permit the Bond Insurer to have access to the Project and
have access to and to make copies of all books and records relating to the
Bonds at any reasonable time.
(C) The Bond Insurer shall have the right to direct an accounting at
the Borrower's expense, and the Borrower's failure to comply with such
direction within thirty (30) days after receipt of written notice of the
direction from the Bond Insurer shall be deemed a default hereunder;
provided, however, that if compliance cannot occur within such period, then
such period will be extended so long as compliance is begun within such
period and diligently pursued, but only if such extension would not
materially adversely affect the interests of any registered owner of the
Bonds.
(D) To the extent that the Borrower enters into a continuing disclosure
agreement with respect to the Bonds, the Bond Insurer shall be included as
party to be notified.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the Borrower
in the Financing Documents or any certificate, statement, data or
information furnished in writing to the Authority or the Trustee by the
Borrower in connection with the closing of the initial issue of the
Bonds or included by the Borrower in its application to the Authority
for assistance proves at any time to have been incorrect when made in
any material respect.
(2) Failure by the Borrower to pay any amount that has become due
and payable with respect to the Bonds or any other amount due and
payable pursuant to the Financing Documents and the continuance of such
failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default
notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section 8.1(A)
of the Indenture (other than an occurrence under Section 8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant,
condition or agreement hereunder or under the Financing Documents
(except those referred to above) and (a) continuance of such failure for
a period of sixty days after receipt by the Borrower of written notice
specifying the nature of such failure or (b) if by reason of the nature
of such failure the same cannot be remedied within the sixty day period,
the Borrower fails to proceed with reasonable diligence after receipt of
the notice to cure the failure.
(6) The Borrower shall (a) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian or the like of itself or
of its property, (b) admit in writing its inability to pay its debts
generally as they become due, (c) make a general assignment for the
benefit of creditors, (d) be adjudicated a bankrupt or insolvent, or (e)
commence a voluntary case under the Federal bankruptcy laws of the
United States of America or file a voluntary petition or answer seeking
reorganization, an arrangement with creditors or an order for relief or
seeking to take advantage of any insolvency law or file an answer
admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding; or corporate action
shall be taken by it for the purpose of effecting any of the foregoing;
or if without the application, approval or consent of the Borrower, a
proceeding shall be instituted in any court of competent jurisdiction,
seeking in respect of the Borrower an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment of
a trustee, receiver, liquidator or custodian or the like of the Borrower
or of all or any substantial part of its assets, or other like relief in
respect thereof under any bankruptcy or insolvency law, and, if such
proceeding is being contested by the Borrower in good faith, the same
shall continue undismissed, or pending and unstayed, for any period of
90 consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default
shall have occurred, the Trustee, or the Authority where so provided herein,
may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII of
the Indenture, may cause all amounts payable under the Financing
Documents to be immediately due and payable without notice or demand of
any kind, whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any
Bondholder, may proceed to enforce the obligations of the Borrower to
the Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity it
may have to collect the amounts then due and thereafter to become due,
or to enforce the performance or observance of the obligations,
agreements, and covenants of the Borrower under the Financing Documents.
(B) In the event that any Event of Default or any proceeding taken
by the Authority (or by the Trustee on behalf of the Authority) thereon shall
be waived or determined adversely to the Authority, then the Event of Default
shall be annulled and the Authority and the Borrower shall be restored to
their former rights hereunder, but no such waiver or determination shall
extend to any subsequent or other default or impair any right consequent
thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the Borrower
shall fail to notify the Authority of the occurrence of any event set forth
in Section 6.4(A) hereof within 60 days of the determination thereof as
provided in Section 6.4(A), the Authority may, not later than one year after
obtaining knowledge of such determination and so long as such failure is
continuing, send a notice to the Trustee and the Borrower calling for the
acceleration of all of the Borrower's obligations under the Financing
Documents and for the redemption of all of the Bonds Outstanding. Any such
notice (i) shall set forth in reasonable detail the event giving rise to the
Borrower's obligation under Section 6.4(A), (ii) shall be accompanied by such
evidence thereof as shall be acceptable to the Trustee, and (iii) shall
specify the dates upon which (a) notice of redemption of the Bonds is to be
given by the Trustee (which shall not be less than 180 days from the date of
the notice being given to the Trustee by the Authority) and (b) the date
redemption of Bonds is to occur (which shall be a date at least thirty days
after notice of redemption is to be given by the Trustee).
(B) If, after receipt of notice from the Authority as
provided in Section 6.4(B), the Borrower shall fail to select a date for
redemption of all Outstanding Bonds, the Authority may, not earlier than 60
days prior to the date which is three years after the date notice was mailed
to the Borrower as provided in Section 6.4(B), send a notice to the Trustee
and the Borrower calling for the redemption of all of the Bonds then
Outstanding. Any such notice shall specify the date that notice of
redemption is to be given by the Trustee and the date that such redemption is
to occur.
(C) On or before the redemption date specified by the Trustee
in its notice of redemption pursuant to this Section, the Borrower shall pay,
as a final loan payment hereunder, a sum sufficient, together with other
funds on deposit with the Trustee and available for such purpose, to redeem
all Bonds then Outstanding under the Indenture at 100% of the principal
amount thereof plus accrued interest to the redemption date. The Borrower
shall also pay or provide for all reasonable and necessary fees of the
Trustee and any Paying Agent accrued and to accrue through the date of
redemption of the Bonds and all other amounts due or to become due under the
Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise required
by law, neither the Authority, the Trustee nor any Bondholder shall be
obligated to do any act whatsoever or exercise any diligence whatsoever to
mitigate the damages to the Borrower if an Event of Default shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Authority or the Trustee is intended to be exclusive of any
other available remedy or remedies but each and every such remedy shall be
cumulative and shall be in addition to every remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute.
Delay or omission to exercise any right or power accruing upon any default or
failure by the Authority or the Trustee to insist upon the strict performance
of any of the covenants and agreements herein set forth or to exercise any
rights or remedies upon default by the Borrower hereunder shall not impair
any such right or power or be considered or taken as a waiver or
relinquishment for the future of the right to insist upon and to enforce, by
injunction or other appropriate legal or equitable remedy, strict compliance
by the Borrower with all of the covenants and conditions hereof, or of the
right to exercise any such rights or remedies, if such default by the
Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and is
hereby granted, the option to prepay its loan obligation and to cause the
corresponding optional redemption of the Bonds pursuant to Section 2.4(A) of
the Indenture at such times, in such amounts, and with such premium, if any,
for such optional redemption as set forth in the forms of the Bonds, by
delivering a written notice to the Trustee in accordance with Section 8.2
hereof, with a copy to the Authority, setting forth the amount to be
prepaid, the amount of Bonds requested to be redeemed as a result of such
prepayment, and the date on which such Bonds are to be redeemed. Such
prepayment must be sufficient to provide monies for the payment of interest
and Redemption Price in accordance with the terms of the Bonds requested to
be redeemed with such prepayment and all other amounts then due under the
Financing Documents. In the event of any complete prepayment of its loan
obligation, the Borrower shall, at the time of such prepayment, also pay or
provide for the payment of all reasonable or necessary fees and expenses of
the Authority, the Trustee and the Paying Agent accrued and to accrue through
the final payment of all the Bonds. Any such prepayments shall be applied to
the redemption of Bonds in the manner provided in Section 2.4(A) of the
Indenture, and credited against payments due hereunder in the same manner.
(B) The Borrower shall have, and is hereby granted, the option to
prepay its loan obligation in full at any time without premium if any of the
following events shall have occurred, as evidenced in each case by the filing
with the Trustee of a certificate of an Authorized Representative of the
Borrower to the effect that one of such events has occurred and is
continuing, and describing the same:
(1) Damage or destruction to the Plant or the Project to such
extent that in the opinion of the Borrower (expressed in a resolution
adopted by the Board of Directors of the Borrower (a "Board
Resolution")) and of an architect or engineer acceptable to the Borrower
(who may be an employee of the Borrower), both filed with the Authority
and the Trustee, (a) the Plant or the Project, as the case may be,
cannot be reasonably repaired, rebuilt, or restored within a period of
six (6) months to their condition immediately preceding such damage or
destruction, or (b) normal operations are thereby prevented from being
carried on at the Plant for a period of not less than six (6) months.
(2) Loss of title to or use of a substantial part of the Plant or
the Project as a result of the exercise of the power of eminent domain
which, in the opinion of the Borrower (expressed in a Board Resolution)
and of an architect or engineer acceptable to the Borrower (who may be
an employee of the Borrower), both filed with the Authority and the
Trustee, prevents or is likely to prevent normal operations from being
carried on at the Plant for a period of not less than six (6) months.
(3) A substantial part of the Plant or the Project shall become
obsolete in the opinion of the Borrower (expressed in a Board
Resolution).
(4) A change in the Constitution of the State of Connecticut or of
the United States of America or legislative or executive action (whether
local, state, or federal) or a final decree, judgment or order of any
court or administrative body (whether local, state, or federal) that
causes this Agreement to become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the parties as
expressed herein or, imposes unreasonable burdens or excessive
liabilities upon the Borrower with respect to the Plant or the Project
or the operation thereof.
(5) The operation of the Plant or the Project shall have been
enjoined or shall otherwise have been prohibited by any order, decree,
rule or regulation of any court or of any local, state, or federal
regulatory body, administrative agency or other governmental body for a
period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in the
economic availability of fuel, materials, supplies, labor, equipment, or
other properties or things necessary for the efficient operation of the
Plant or the Project shall have occurred which, in the judgment of the
Borrower (expressed in a Board Resolution), render the continued
operation of the Plant uneconomical.
In any such case the final loan payment shall be a sum sufficient, together
with other funds deposited with Trustee and available for such purpose, to
redeem all Bonds then outstanding under the Indenture at the redemption price
of 100% of the principal amount thereof plus accrued interest to the
redemption date or dates and all other amounts then due under the Financing
Documents, and the Borrower shall also pay or provide for all reasonable or
necessary fees and expenses of the Trustee and Paying Agent and the
Remarketing Agent accrued and to accrue through final payment for the Bonds.
The Borrower shall deliver a written notice to the Trustee, with a copy to
the Authority, requesting the redemption of the Bonds under the Indenture,
which notice shall have attached thereto the applicable certificate of the
Authorized Representative of the Borrower. The Borrower's right to so
request the redemption of the Bonds upon the occurrence of any single event
listed in this Section 8.1(B) shall expire six (6) months, and any such
redemption shall occur within nine (9) months, after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant to
Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the prepayment
date if Bonds to be redeemed with the amounts to prepaid pursuant to the
Indenture are then in the Flexible Mode, and forty-five (45) days before the
prepayment date if Bonds to be redeemed with the amounts so prepaid pursuant
to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower shall
pay or cause the prepayment of its loan obligation following a Determination
of Taxability in the manner provided in Section 6.3 of this Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain Events.
The Borrower shall pay or cause the prepayment of its loan obligation, prior
to the maturity of the Bonds, on a date selected by the Borrower, which date
shall be not later than three years after the date of mailing to the Borrower
of notice from the Authority of the Authority's election to accelerate the
Borrower's loan obligation hereunder as provided in Sections 6.4 and 7.3
hereof.
Section 8.5. Mandatory Prepayment Pursuant to Standby Bond Purchase
Agreement. The Borrower shall pay or cause the prepayment of its loan
obligation in accordance with the mandatory amortization provisions relating
to Bank Bonds (as such term is defined in the Standby Bond Purchase
Agreement) contained in the Standby Bond Purchase Agreement.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the Bonds
and all loan payments made by the Borrower and all other monies received by
the Authority or the Trustee under the Financing Documents shall be applied
solely and exclusively in the manner and for the purposes expressed and
specified in the Indenture and in the Bonds and as provided in this
Agreement.
(B) The Borrower shall have and may exercise all the rights,
powers and authority given the Borrower in the Indenture and in the Bonds,
and the Indenture and the Bonds shall not be modified, altered or amended in
any manner which adversely affects such rights, powers and authority or
otherwise adversely affects the Borrower without the prior written consent of
the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The Authority
and the Borrower agree that this Agreement is executed in part to induce the
purchase by others of the Bonds and for the further securing of the Bonds,
and accordingly that all covenants and agreements on the part of the
Authority and the Borrower as to the amounts payable with respect to the
Bonds hereunder are hereby declared to be for the benefit of the holders from
time to time of the Bonds and may be enforced as provided in the Indenture on
behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure the
Borrower shall be rendered unable wholly or in part to carry out its
obligations under this Agreement, then except as otherwise expressly provided
in this Agreement, if the Borrower shall give notice and full particulars of
such force majeure in writing to the Authority within a reasonable time after
occurrence of the event or cause relied on, the obligations of the Borrower,
other than its obligation to make the payments required under the terms
hereof or of the Mortgage Bonds, so far as they are affected by such force
majeure, shall be suspended during the continuance of the inability then
claimed which shall include a reasonable time for the removal of the effect
thereof, but for no longer period, and the Borrower shall endeavor to remove
or overcome such inability with all reasonable dispatch. The term "force
majeure", as employed herein, means acts of God, strikes, lockouts or other
industrial disturbances, acts of the public enemy, orders of any kind of the
Government of the United States, of the State or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods,
washouts, droughts, arrests, restraining of government and people, civil
disturbances, explosions, partial or entire failure of utilities, shortages
of labor, material, supplies or transportation, or any other similar or
different cause not reasonably within the control of the party claiming such
inability. It is understood and agreed that the settlement of existing or
impending strikes, lockouts or other industrial disturbances shall be
entirely within the discretion of the Borrower and that the above
requirements that any force majeure shall be reasonably beyond the control of
the Borrower and shall be remedied with all reasonable dispatch shall be
deemed to be fulfilled even though such existing or impending strikes,
lockouts and other industrial disturbances may not be settled and could have
been settled by acceding to the demands of the opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with the
concurring written consent of the Trustee and, if required by the Indenture,
of the owners of the Bonds given in accordance with the provisions of the
Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by registered or certified mail, postage
prepaid, addressed as follows: if to the Authority, at 845 Brook Street,
Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan
Administration; if to the Borrower, c/o Northeast Utilities Service Company
at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant
Treasurer; if to the Remarketing Agent, Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Municipal Bond Department; if to
the Paying Agent, Fleet National Bank, 777 Main Street, Hartford, Connecticut
06115, Attention: Corporate Trust Department; and if to the Trustee, Fleet
National Bank, 777 Main Street, Hartford, Connecticut 06115, Attention:
Corporate Trust Department. A duplicate copy of each notice, certificate or
other communication given hereunder by either the Authority or the Borrower
to the other shall also be given to the Trustee. The Authority, the
Borrower, the Remarketing Agent, the Paying Agent and the Trustee may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together
with all agreements executed by the parties concurrently herewith or in
conjunction with the sale of the Bonds, shall completely and fully supersede
all other prior understandings or agreements, both written and oral, between
the Authority and the Borrower relating to the lending of money and the
Project, including those contained in any commitment letter executed in
anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be
executed simultaneously in several counterparts each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this Agreement
are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
executed in its corporate name by a duly Authorized Representative, and the
Borrower has caused this Agreement to be executed in its corporate name by
its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By
Name: /s/Antone C. Botelho, III
Authorized Representative
The Connecticut Light and
Power Company
By
Name: /s/David R. McHale
Title: Assistant Treasurer-Finance
APPENDIX A
DESCRIPTION OF PROJECT EQUIPMENT
I. POLLUTION CONTROL FACILITIES
(a) Condensate Polishing Demineralizer Resin Regeneration System
(b) Water Treating Resin Regeneration System
(c) Boron Recycle Facility
(d) Liquid Waste Management System
(e) Gaseous Waste Degasification System
(f) Gaseous Waste (HVAC) System
(g) Oil Separators
II. SEWAGE DISPOSAL FACILITIES
(a) Sanitary Waste System
III. SOLID WASTE FACILITIES
(a) Screen Wash and Disposal System
(b) Radioactive Solid Waste System
(c) Spent Fuel Facility