Exhibit 4.2.24.2
STANDBY BOND PURCHASE AGREEMENT
dated January 23, 1997
among
The Connecticut Light and Power Company
Societe Generale, New York Branch
and
Fleet National Bank, as Trustee
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION 2
SECTION 1.1 Definitions 2
SECTION 1.2 Rules of Construction 10
ARTICLE 2 THE COMMITMENT 11
SECTION 2.1 Commitment to Purchase Bonds 11
SECTION 2.2 Method of Purchasing 11
SECTION 2.3 Reduction of Commitment; Termination 12
SECTION 2.4 Sale of Bank Bonds; Amortization of Bank Bonds 13
SECTION 2.5 Commitment Fees 14
SECTION 2.6 Request for Extension of Stated Expiration Date14
ARTICLE 3 THE BANK RATE 15
SECTION 3.1 Applicable Interest Rate; Other Interest Provisions
15
SECTION 3.2 Place of Payment, Etc 16
SECTION 3.3 Taxes 17
SECTION 3.4 Increased Costs; Funding Losses 17
SECTION 3.5 Basis for Determining Interest Rate Inadequate or Unfair
18
SECTION 3.6 Illegality 19
ARTICLE 4 CONDITIONS PRECEDENT 19
SECTION 4.1 Conditions Precedent to Effectiveness of this Agreement
19
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 22
SECTION 5.1 Organization 22
SECTION 5.2 Authorization 22
SECTION 5.3 Enforceability 22
SECTION 5.4 Approvals 22
SECTION 5.5 Financial Information 22
SECTION 5.6 Litigation 23
SECTION 5.7 No Misrepresentations 23
SECTION 5.8 Environmental Matters 23
SECTION 5.9 Investment Company Act 24
SECTION 5.10 Public Utility 24
ARTICLE 6 AFFIRMATIVE COVENANTS 25
SECTION 6.1 Financial Statements 25
SECTION 6.2 Certificates; Other Information 25
SECTION 6.3 Payment of Obligations 26
SECTION 6.4 Conduct of Business and Maintenance of Existence; Merger
26
SECTION 6.5 Maintenance of Property; Insurance 27
SECTION 6.6 Inspection; Books and Records; Discussions 27
SECTION 6.7 Notices 27
SECTION 6.8 Indemnity 28
ARTICLE 7 NEGATIVE COVENANTS 29
SECTION 7.1 Amendment of Any Related Document 29
ARTICLE 8 EVENTS OF DEFAULT; EVENTS OF TERMINATION 29
SECTION 8.1 Events of Default; Events of Termination 29
SECTION 8.2 Remedies 31
ARTICLE 9 MISCELLANEOUS 32
SECTION 9.1 Set-off; Limitation on Set-off 32
SECTION 9.2 Obligations Absolute 33
SECTION 9.3 Liability of the Bank 34
SECTION 9.4 Confidentiality 34
SECTION 9.5 Costs, Expenses and Stamp Taxes 35
SECTION 9.6 Participants 35
SECTION 9.7 Extension of Maturity 36
SECTION 9.8 Successors and Assigns 36
SECTION 9.9 Modification or Waiver of this Agreement 36
SECTION 9.10 No Waiver of Rights by the Bank; Cumulative Rights
36
SECTION 9.11 Severability 36
SECTION 9.12 Notices 36
SECTION 9.13 Governing Law 37
SECTION 9.14 Counterparts 37
Schedules
Schedule 5.5 Material Adverse Change
Schedule 5.8 Environmental Matters
Exhibits
Exhibit A Notice of Bank Purchase (Liquidity Purchase)
Exhibit B Notice of Bank Purchase (Mandatory Purchase)
Exhibit C Certificate of Event of Termination
STANDBY BOND PURCHASE AGREEMENT
STANDBY BOND PURCHASE AGREEMENT, dated January 23, 1997 (this
"Agreement"), among THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation
organized and existing under the laws of the State of Connecticut (the
"Company"), SOCIETE GENERALE, a banking corporation organized under the laws
of France, acting through its New York Branch (the "Bank"), and FLEET
NATIONAL BANK, a national banking association, as trustee under the Indenture
referred to below (including any successor trustee, the "Trustee").
W I T N E S S E T H:
WHEREAS, the Connecticut Development Authority, a body corporate
and politic, constituting a public instrumentality and a political
subdivision of the State of Connecticut (the "Authority"), has issued and
sold, pursuant to the Resolution (as defined below), $62,000,000 in aggregate
principal amount of its Pollution Control Revenue Bonds (The Connecticut
Light and Power Company Project -- 1996A Series) (the "Bonds"), pursuant to
the Original Indenture (as defined below), between the Authority and the
Trustee, as authorized pursuant to the Act (as defined below);
WHEREAS, concurrently with the execution of the Original Indenture
and the issuance of the Bonds pursuant thereto, the Company caused to be
delivered to the Trustee a letter of credit (the "Letter of Credit") issued
by Canadian Imperial Bank of Commerce, New York Agency;
WHEREAS, pursuant to an amendment and restatement of the Original
Indenture, the Company has determined to replace the Letter of Credit with an
Insurance Policy (as defined below) to be issued by the Bond Insurer (as
defined below) and a liquidity facility;
WHEREAS, the payment of the principal of and interest on the Bonds
(including Bank Bonds, as hereinafter defined) is to be insured by an
Insurance Policy (as defined below) to be issued by the Bond Insurer (as
defined below), in favor of the holders of the Bonds (including the Bank);
and
WHEREAS, the Company has requested the Bank to provide a liquidity
facility in support of the Company's obligations with respect to (a) the
portion of the Purchase Price (as defined below) corresponding to principal
of, and (b) the portion of the Purchase Price corresponding to interest on,
the Bonds delivered to the Paying Agent (as defined below);
WHEREAS, the Bank is willing to provide such liquidity facility on
the terms and conditions herein contained;
NOW, THEREFORE, in consideration of the premises herein contained,
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.1 Definitions. For purposes of this Agreement, the
terms set forth in this Article have the following meanings:
"Act" means the State Commerce Act, constituting Connecticut
General Statutes, Sections 32-1a through 32-23xx, as amended.
"Alternate Liquidity Facility" has the meaning ascribed to that
term in the Indenture.
"AMBAC Adverse Change" means the downgrading of the Bond Insurer's
claims-paying ability rating below an "A" by S&P or Moody's.
"Amortization Period" has the meaning ascribed to that term in
Section 2.4(c) hereof.
"Applicable LIBOR" means, at any time, LIBOR plus the Applicable
Margin.
"Applicable Margin" means, for any day, the percentage set forth
below in the column below such term and in the row corresponding to the
"Level" status in existence on such day:
Applicable Margin
Level 1 0.40%
Level 2 0.45%
Level 3 0.50%
Level 4 0.70%
Level 5 0.95%
Level 6 1.250%
"Authority" has the meaning assigned to that term in the recitals
to this Agreement.
"Authorized Officer" means (a) with respect to the Company, the
President, any Vice President, the Treasurer or Assistant Treasurer of the
Company, or (b) with respect to the Trustee or the Paying Agent, any Senior
Vice President, Vice President, Assistant Vice President, Senior Trust
Officer, Trust Officer or Assistant Trust Officer or any equivalent officer.
"Available Commitment" means on any day the sum of the Available
Principal Commitment and the Available Interest Commitment on such day.
"Available Interest Commitment" initially means $918,000
(calculated on the basis of an assumed rate of 12% per annum for 45 days on
the initial Available Principal Commitment) and thereafter means such amount
adjusted from time to time as follows: (a) downward by an amount that bears
the same proportion to such amount as the amount of any reduction in the
Available Principal Commitment pursuant to this definition bears to the
Available Principal Commitment prior to such reduction; and (b) upward by an
amount that bears the same proportion to such amount as the amount of any
increase in the Available Principal Commitment pursuant to clause (c) of the
definition of "Available Principal Commitment" bears to the Available
Principal Commitment prior to such increase; provided that after giving
effect to such adjustment the Available Interest Commitment shall never
exceed Nine Hundred Eighteen Thousand Dollars ($918,000). Any adjustments
pursuant to clauses (a) and (b) above shall occur simultaneously with the
event requiring such adjustment.
"Available Principal Commitment" initially means Sixty-Two Million
Dollars ($62,000,000) and thereafter means such amount adjusted from time to
time as follows: (a) downward by the amount of any reduction of the
Available Principal Commitment pursuant to Section 2.3 hereof; (b) downward
by the principal amount of any Bonds purchased by the Bank pursuant to
Section 2.2 hereof; and (c) upward by the principal amount of any Bonds
theretofore purchased by the Bank pursuant to Section 2.2 hereof, which are
resold by a Bank Bondholder pursuant to Section 2.4(a) or (b) hereof. The
Available Principal Commitment shall never exceed Sixty-Two Million Dollars
($62,000,000). Any adjustments pursuant to clauses (a), (b) and (c) above
shall occur simultaneously with the event requiring such adjustment.
"Bank" has the meaning set forth in the introductory paragraph.
"Bank Bondholder" means the Bank (but only in its capacity as owner
of Bank Bonds pursuant to this Agreement) and any other Person to whom the
Bank has sold Bank Bonds pursuant to Section 2.4(a) hereof.
"Bank Bonds" means each Bond purchased with funds provided by the
Bank hereunder, until such Bonds are remarketed in accordance with the
Indenture and Section 2.4(a) hereof or sold to the Company or its designee in
accordance with Section 2.4(b) hereof.
"Bank Purchase Date" means a Business Day during the Bank Purchase
Period on which the Bank is required to purchase Tendered Bonds pursuant to
Section 2.2 hereof.
"Bank Purchase Period" means the period from the date hereof to and
including the earliest of (a) the Stated Expiration Date then in effect, (b)
the close of business on the fifth Business Day following the Conversion Date
on which all of the Bonds shall have been converted to a Fixed Rate or a
Multiannual Rate (provided, however, that if less than all of the Bonds
shall have been converted to a Fixed Rate or Multiannual Rate, the Bank's
Available Commitment shall extend only to those Bonds not bearing interest at
the Fixed Rate or the Multiannual Rate), (c) the fifth Business Day following
the mandatory tender for purchase in connection with a Substitution Date, or
(d) the Purchase Termination Date
"Bank Rate" means the interest rate(s) applicable from time to time
on the Bank Bonds as determined in accordance with Section 3.1 of this
Agreement.
"Base Rate" means, at any time, a rate per annum equal to the
higher of (a) the Prime Rate in effect at such time or (b) the Federal Funds
Effective Rate in effect at such time plus the Applicable Margin.
"Bond Insurer" means AMBAC Indemnity Corporation, a Wisconsin-
domiciled stock insurance company.
"Bonds" has the meaning assigned to that term in the recitals to
this Agreement and shall include, unless the context otherwise requires, all
Bank Bonds.
"Business Day" means any day (i) on which banks in New York City
and the city in which the corporate trust office of the Trustee is located
are not required or authorized to remain closed and (ii) on which The New
York Stock Exchange is not closed.
"Claim" has the meaning set forth in Section 6.9.
"Closing Date" means the date on which the liquidity facility
provided by this Agreement shall have become effective.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, industrial substance or
waste, petroleum or petroleum-derived substance or waste, or any constituent
of any such substance or waste, including any such substance regulated under
any Environmental Law.
"Debt" means (a) indebtedness for borrowed money or for the
deferred purchase price of property or services, where such deferred purchase
price is, or should be, in accordance with GAAP, recorded as indebtedness,
(b) obligations as lessee under leases which are or should be, in accordance
with GAAP, recorded as capital leases and (c) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise)
to purchase or otherwise acquire, or otherwise to assure a credit against
loss in respect of, indebtedness or obligations of others of the kinds
referred to in clause (a) or (b) above.
"Defaulted Interest" means accrued interest payable on a Bond which
was not paid when due under the terms of the Indenture.
"Deferred Interest" has the meaning assigned to that term in
Section 3.1(c) of this Agreement.
"Deferred Interest Fee Amount" has the meaning assigned to that
term in Section 3.1(c) of this Agreement.
"Differential Interest Amount" means, with respect to any Bank
Bond, the excess of (a) interest which has accrued on such Bank Bond at the
Bank Rate, as determined in accordance with Section 3.1 hereof, up to but
excluding the Business Day on which such Bank Bond is sold pursuant to
Section 2.4, less (b) the interest accrued on such Bank Bond received by the
Bank Bondholder as part of the Sale Price.
"Dollars", "US$", "$" and "U.S. Dollars" mean the lawful currency
of the United States of America.
"Environmental Laws" means any and all Federal, national, state,
provincial, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental Authority
relating to pollution or protection of the environment, including without
limitation, laws relating to the Release or threatened Release of
Contaminants, into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata) or
otherwise relating to the presence, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Contaminants,
which such laws include, without limitation, the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. Section 9601
et seq.; the Superfund Amendment and Reauthorization Act of 1986, as amended,
Public Law 99-499, 100 Stat. 1613; the Emergency Planning and Community Right
to Know Act, as amended, 42 U.S.C. Section 1101 et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq..;
the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.;
the Surface Mining Control and Reclamation Act, as amended, 30 U.S.C.
Section 1201 et seq.; the Clean Water Act, as amended, (including the Federal
Water Pollution Control Act, as amended), 33 U.S.C. Section 1251 et seq.; the
Clean Air Act, as amended, 42, U.S.C. Section 7401 et seq.; the Safe Drinking
Water Act, as amended, 42 U.S.C. 300 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Section 1802 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C. Section 136
et seq.; any regulation promulgated under the foregoing; and any similar
state or local statute or ordinance; and all substitutions therefor.
"Environmental Liabilities and Costs" means all liabilities,
obligations, responsibilities, obligations to conduct Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages,
costs and expenses (including, without limitation, all reasonable fees,
disbursements and expenses of counsel, expert and consulting fees and costs
of investigations and feasibility studies), fines, penalties, and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future, resulting from any claim or demand, by
any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any Environmental Law,
arising from on-site environmental, health or safety conditions, or the
Release or threatened Release of a Contaminant into the environment, as a
result of past, present or future operations of the Company or any previous
owners or lessees of any properties.
"Environmental Lien" shall mean any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Euro-Dollar Business Day" means any Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London, England.
"Event of Default" has the meaning set forth in Section 8.1.
"Event of Termination" has the meaning set forth in Section 8.1.
"Federal Funds Effective Rate" means, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by the
Bank from three Federal funds brokers of recognized standing selected by it.
"Final Deferred Interest Fee Amount" has the meaning set forth in
Section 3.1(c).
"First Mortgage Bonds" has the meaning ascribed to that term in the
Indenture.
"Fixed Rate Conversion Date" has the meaning ascribed to that term
in the Indenture.
"GAAP" means generally accepted accounting principles, as applied
to a regulated utility, as in effect from time to time.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Hazardous Substance" means any toxic, caustic or otherwise
hazardous substance, including, without limitation, petroleum, its
derivatives, by-products and other hydrocarbons, whether or not regulated
under Federal, State or local environmental statutes, ordinances, rules,
regulations, or orders.
"Indenture" means the Indenture of Trust, dated as of May 1, 1996,
as amended and restated as of January 1, 1997, between the Authority and the
Trustee, as amended or supplemented from time to time.
"Insolvent" means with respect to any Multiemployer Plan, the
condition that such plan is insolvent within the meaning of such term as used
in Section 4241 of ERISA.
"Insurance Policy" has the meaning ascribed to that term in the
Indenture.
"Interest Component" has the meaning set forth in Section 2.1.
"Interest Payment Date" means the last day of each Interest Period
and, in the case of an Interest Period with respect to a Bank Rate based on
LIBOR of more than three months' duration, each day that would have been the
Interest Payment Date had successive Interest Periods of three months been
applicable.
"Interest Period" means (a) with respect to a Bank Rate based on
LIBOR, the period commencing on the date such Bank Rate becomes effective and
ending on the date one, two, three or six months thereafter, as the Company
may select; provided that (i) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period shall end
on the next preceding Euro-Dollar Business Day; (ii) any Interest Period
which begins on the last Euro-Dollar Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to clause (iii)
below, end on the last Euro-Dollar Business Day of the calendar month at the
end of such Interest Period; (iii) any Interest Period which would otherwise
end after the Stated Expiration Date shall end on the Stated Expiration Date;
and (iv) no Interest Period selected by the Company during the Amortization
Period shall end on a date subsequent to the next amortization date during
the Amortization Period; and (b) with respect to a Bank Rate based on the
Base Rate, the period commencing on the date such Bank Rate becomes effective
and ending on the last Business Day of the calendar quarter in which such
Rate becomes effective; provided that any Interest Period which would
otherwise end after the Stated Expiration Date shall end on the Stated
Expiration Date.
"Level" means, for any day, the highest applicable level set forth
below based on the applicable ratings of the Company's senior unsecured
long-term debt with S&P:
S&P Rating
Level 1 A- or above
Level 2 BBB+
Level 3 BBB
Level 4 BBB-
Level 5 BB+
Level 6 Below BB+
"LIBOR" means for any Interest Period, the rate per annum
(calculated on the basis of a year of 360 days for the actual number of days
elapsed) at which deposits are offered to the Bank in the London interbank
market at approximately 11:00 A.M., London time, on the third full Euro-
Dollar Business Day preceding the first day of such Interest Period in an
amount substantially equal to the principal amount of the Bank Bonds and with
a maturity comparable to such Interest Period.
"Lien" means collectively any mortgage, pledge, title retention
agreement, lien, claim, charge or other encumbrance or security interest.
"Loan Agreement" means the Loan Agreement, dated as of May 1, 1996,
as amended and restated as of December 1, 1996, between the Authority and the
Company, as amended, supplemented or otherwise modified from time to time.
"Mandatory Purchase Date" means each date on which Bonds are
required to be purchased pursuant to the Indenture.
"Maximum Interest Rate" means the lesser of (i) 18% per annum, or
(b) the maximum rate of interest on the relevant obligation permitted by
applicable law.
"Moody's" has the meaning ascribed to that term in the Indenture.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Notice of Bank Purchase" means in the case of a purchase of Bonds
by the Bank pursuant to the Indenture, a notice in the form of Exhibit A or
Exhibit B, as applicable, attached hereto and incorporated herein by this
reference.
"NU" means Northeast Utilities, an unincorporated voluntary
business association organized under the laws of the Commonwealth of
Massachusetts.
"Original Indenture" means the Indenture of Trust, dated as of May
1, 1996, between the Authority and the Trustee.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Person" means any natural person, corporation, firm, association,
limited liability company, government, governmental agency or other entity,
whether acting in an individual or fiduciary capacity.
"Plan" means, at any particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Prime Rate" means the rate of interest established and announced
by the Bank in New York, New York from time to time as its prime or base
rate. The Bank's prime rate or base rate is determined from time to time as
a means of pricing United States Dollar credit extensions to some United
States based customers and is neither directly fixed to any external rate of
interest or index nor necessarily the lowest rate of interest charged by the
Bank at any given time for any particular class of customer or credit
extensions.
"Purchase Price" with respect to any Bond or portion thereof on a
Bank Purchase Date therefor, has the meaning ascribed to that term in the
Indenture.
"Purchase Termination Date" has the meaning set forth in Section
8.2(a)(v).
"Related Documents" means, collectively, the Resolution, the Loan
Agreement, the First Mortgage Bonds, the Indenture, the Bonds, the Insurance
Policy, the Remarketing Agreement, the Tax Regulatory Agreement and the
Reoffering Circular.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, disbursal, leeching or migration
into the indoor or outdoor environment or into or out of any property owned
by the Company or any of its Subsidiaries including the movement of Con-
taminants through or in the air, soil, surface water, ground water or
property.
"Remarketing Agent" has the meaning ascribed to that term in the
Indenture.
"Remarketing Agreement" has the meaning ascribed to that term in
the Indenture.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way adjust Contaminants in the indoor or
outdoor environment; (b) prevent the Release or threat of Release or minimize
the further Release of Contaminants so that they do not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment; or (c) perform pre-remedial studies and investigations and post-
remedial monitoring and care.
"Reoffering Circular" means the Reoffering Circular of the Company,
dated January 20, 1997, including, without limitation, documents incorporated
therein by reference, used in connection with the reoffering of the Bonds,
and any supplement thereto used with respect to the Bonds.
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of such term
as used in Section 4241 of ERISA.
"Resolution" means, collectively, the resolution adopted April 17,
1996, by the Authority, with respect to the offer and sale of the Bonds, and
the resolution adopted December 18, 1996, by the Authority, with respect to
the replacement of the Letter of Credit with the Insurance Policy and this
Agreement.
"Sale Price" has the meaning set forth in Section 2.4(a).
"S&P" has the meaning ascribed to that term in the Indenture.
"Stated Expiration Date" means the later of (i) January 21, 1998,
or, if such day is not a Business Day, the next preceding Business Day, and
(ii) the last day of any extension of such date pursuant to Section 2.6 or,
if such day is not a Business Day, the next preceding Business Day.
"Substitution Date" means the effective date of an Alternate
Liquidity Facility.
"Tax Regulatory Agreement" has the meaning ascribed to that term in
the Indenture.
"Taxes" has the meaning set forth in Section 3.3.
"Tendered Bonds" means, as of any date, Bonds which are tendered or
deemed tendered for purchase pursuant to the Indenture.
"Trustee" has the meaning set forth in the introductory paragraph
of this Agreement.
SECTION 1.2 Rules of Construction. In this Agreement, the
following rules of construction and interpretation shall apply:
(a) The terms "herein", "hereof", "hereto", "hereinabove",
"hereinbelow", "hereunder", and words of similar import, refer to this
Agreement as a whole and not to any particular section, subsection,
paragraph, clause or other subdivision hereof, unless otherwise specifically
stated.
(b) Any headings preceding the text of any article or section of
this Agreement, and any table of contents and marginal notes appended hereto,
shall be solely for convenience of reference and shall neither constitute a
part of this Agreement nor affect its meaning, construction or effect.
(c) All accounting terms not specifically defined herein shall be
construed in accordance with GAAP, consistently applied, except as otherwise
stated herein.
(d) In this Agreement, in the computation of a period of time from
a specified date to a later specified date, the word "from" shall mean "from
and including" and the words "to" and "until" each shall mean "to but
excluding".
(e) Unless otherwise indicated, all references herein to
particular articles or sections are references to articles or sections of
this Agreement.
(f) All capitalized terms used herein and not otherwise defined
shall have the meanings ascribed thereto in the Indenture.
ARTICLE 2
THE COMMITMENT
SECTION 2.1. Commitment to Purchase Bonds. The Bank agrees, on
the terms and conditions contained in this Agreement, to purchase the
Tendered Bonds for its own account from time to time during the Bank Purchase
Period at the Purchase Price. The aggregate principal amount of all Bonds
purchased on any Bank Purchase Date shall not exceed the Available Principal
Commitment (calculated without giving effect to any purchase of Bonds by the
Bank on such date) on such date. The aggregate amount of the Purchase Price
comprised of interest on the Bonds (the "Interest Component") purchased on
any Bank Purchase Date shall equal the actual aggregate amount of interest
accrued on each such Bond to but excluding such Bank Purchase Date, and not
to exceed the Available Interest Commitment on such Bank Purchase Date. Any
Bonds so purchased shall thereupon constitute Bank Bonds and shall, from the
date of such purchase and while they are Bank Bonds, bear interest at the
Bank Rate and have other characteristics of Bank Bonds as set forth herein
and to the extent not in conflict herewith, in the Indenture.
SECTION 2.2 Method of Purchasing. Pursuant to Section 9.18 of the
Indenture, the Paying Agent will give notice to the Bank as follows if Bonds
are to be purchased by the Bank. If by 12:30 p.m. (New York City time) (1:00
p.m. if the Bonds are in the Daily Mode or Flexible Mode) on any Business Day
during the applicable Bank Purchase Period, the Bank receives written Notice
of Bank Purchase from the Paying Agent, the Bank will, so long as the Bank
Purchase Period shall not have expired, transfer not later than 3:00 p.m.
(New York City time) on the Bank Purchase Date to the Paying Agent, in funds
to be available as specified in such Notice of Bank Purchase, an amount equal
to the aggregate Purchase Price of such Bonds. The Bank shall not have any
responsibility for, or incur any liability in respect of, any act, or any
failure to act, by the Paying Agent which results in the failure of the
Paying Agent (a) to credit the appropriate account with funds made available
by the Bank pursuant to this Section or (b) to effect the purchase for the
account of the Bank of Bonds with such funds pursuant to this Section. The
Bank shall use its own funds to purchase Bonds. The Bonds purchased with
amounts made available hereunder shall be registered in the name of the Bank
and shall be held as Bank Bonds in trust by the Paying Agent for the benefit
of the Bank as provided in the Indenture, but upon the written request of the
Bank shall be promptly delivered by the Paying Agent to the Bank. Amounts
made available hereunder which are not so used to purchase Bonds will be
returned to the Bank no later than 4:30 p.m. (New York City time).
SECTION 2.3 Reduction of Commitment; Termination.
(a) Mandatory Reduction of Commitment. Upon any redemption,
repayment or other payment pursuant to the Indenture (including, without
limitation, defeasance of the Bonds pursuant to Section 12.1 of the
Indenture) of all or any portion of the principal amount of the Bonds (other
than Bank Bonds) so that such Bonds shall cease to be "Outstanding" (as
defined in the Indenture) under the Indenture, the aggregate Available
Principal Commitment of the Bank shall automatically be reduced by the
principal amount of such Bonds so redeemed, repaid or otherwise deemed paid,
and the Available Interest Commitment shall also be simultaneously reduced as
provided in the definition thereof in Section 1.1 hereof.
(b) Voluntary Termination or Reduction of Commitment. In the
event that (i) the Bank shall fail to purchase Tendered Bonds when required
under the terms and conditions of this Agreement, or (ii) bankruptcy,
insolvency, receivership, liquidation or other similar proceedings are
instituted by or against the Bank, or (iii) the Company shall have delivered
to the Bank a certificate to the effect that the Company has identified a
financial institution other than the Bank which will furnish an Alternate
Liquidity Facility; then the Company may, at any time thereafter, terminate
the Available Commitment in whole by giving the Bank not less than thirty
Business Days' notice in writing to such effect; provided that (A) in the
case of a termination following an event described in clause (i) or clause
(ii) of this sentence, the Company may terminate the Available Commitment
immediately by giving the Bank notice in writing to such effect; and (B) in
the case of clause (iii), the Company may terminate the Available Commitment
only if (1) the provider of an Alternate Liquidity Facility shall agree, in a
manner reasonably acceptable to the Bank, to purchase on the Substitution
Date any Bank Bonds, not otherwise remarketed, held by or on behalf of the
Bank or a Bank Bondholder at a purchase price equal to the principal amount
of such Bank Bonds plus accrued interest (including Deferred Interest)
thereon at the Bank Rate to the date of purchase of such Bank Bonds, and (2)
at the date of such purchase, the Company and/or such provider shall pay all
other amounts owing to the Bank hereunder (including accrued and unpaid
Differential Interest Amount and interest thereon).
(c) Termination. The Available Commitment shall automatically
terminate on the last day of the Bank Purchase Period.
SECTION 2.4 Sale of Bank Bonds; Amortization of Bank Bonds.
(a) Sales by Remarketing Agent. The Bank, and each other Bank
Bondholder, by its acceptance of a Bank Bond, hereby authorize the
Remarketing Agent pursuant to Section 9.19 of the Indenture to sell Bank
Bonds purchased by the Bank pursuant to Section 2.2 above on behalf of the
Bank or such Bank Bondholder at a price equal to the principal amount thereof
plus unpaid accrued interest thereon to but excluding the date such Bank
Bonds are to be sold pursuant to this Section 2.4(a) at the interest rate to
be borne by the Bonds after such sale or, if less, the Bank Rate (the "Sale
Price"); provided, that neither the Bank nor any other Bank Bondholder shall
have any obligation to deliver the Bank Bonds as directed by the Remarketing
Agent or sell such Bank Bonds unless the Company has paid or has duly
provided for (through the Insurance Policy or otherwise) the payment of the
Differential Interest Amount to the Bank or such other Bank Bondholder. Any
sale of a Bank Bond pursuant to this Section 2.4(a) shall be without recourse
to the seller and without representation or warranty of any kind. The Bank
agrees to deliver and, by its acceptance of a Bank Bond, each other Bank
Bondholder agrees to deliver (but only upon receipt by the Bank or such other
Bank Bondholder of U.S. Dollars in the amount of the Sale Price), to the
Paying Agent each Bank Bond sold by it pursuant to this Section 2.4(a),
including, without limitation, Bank Bonds which are deemed to have been
delivered in accordance with the provisions of the Indenture. After any sale
of Bank Bonds by the Remarketing Agent pursuant to this Section 2.4(a) and
payment to the Bank or the Bank Bondholder of the principal and interest
accrued on such Bank Bonds (including interest accrued at the Bank Rate),
such Bank Bonds so sold shall, from such sale date, cease to bear interest at
the Bank Rate and shall thereafter bear interest at a rate determined in
accordance with the Indenture.
(b) Repurchase by the Company of Bank Bonds. Upon the request of
the Company, the Bank or the Bank Bondholder shall sell the Bank Bonds (or
portions thereof) to the Company or its designee at a price equal to the
principal amount of the Bank Bonds plus accrued but unpaid interest thereon,
calculated at the Bank Rate. Upon receipt of the purchase price therefor,
the Bank shall execute and deliver to the Company, or its designee, as the
case may be, such instruments of assignment, and/or take such other action as
shall be reasonably necessary to cause such Bank Bonds to be registered in
the name of the Company or its designee, as the case may be, subject in each
case to the terms and conditions of the Indenture.
(c) Amortization of Bank Bonds. So long as no Event of
Termination shall have occurred and be continuing and so long as no Alternate
Liquidity Facility shall have become effective (with respect to which the
provider of such Alternate Liquidity Facility shall have purchased all Bank
Bonds then held by the Bank at a price equal to principal plus accrued
interest (including interest accrued at the Bank Rate)), then, upon (A) the
occurrence of an Event of Default or (B) the expiration of the Bank Purchase
Period, the Company shall amortize the Bank Bonds, and shall provide for the
Bank Bonds to be amortized pursuant to the Insurance Policy, over a five-year
period (the "Amortization Period"), in equal semi-annual installments,
commencing six months after the occurrence of such Event of Default or the
end of such Bank Purchase Period, as the case may be; provided, however, that
if the Bank Purchase Period shall have terminated because the Purchase
Termination Date shall have occurred, then this paragraph (c) shall not apply
and the remedies set forth in Section 8.2(a) shall apply. During such
Amortization Period, interest shall continue to accrue on the Bank Bonds at
the Bank Rate. Notwithstanding the foregoing, upon the occurrence of an
Event of Termination (even if such Event of Termination occurs during such
Amortization Period), the Bank shall tender the Bank Bonds to the Company for
immediate purchase, and the Company shall so purchase such Bank Bonds and any
additional Tendered Bonds purchased by the Bank during the remainder of the
Bank Purchase Period.
SECTION 2.5 Commitment Fees. The Company shall pay to the Bank a
commitment fee with respect to the average daily amount of the Available
Commitment at a rate per annum equal to the following:
Level 1 0.09%
Level 2 0.0125%
Level 3 0.15%
Level 4 0.175%
Level 5 0.25%
Level 6 0.40%
Such commitment fee shall be calculated on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed from the effective date of
this Agreement through and including the last day of the Bank Purchase
Period. Such commitment fee shall be payable in immediately available funds,
quarterly in arrears, on March 31, June 30, September 30 and December 31 (or,
if such day is not a Business Day, the next preceding Business Day) of each
year, with the first payment being due on March 31, 1997, with respect to the
period or portion thereof ending on such fee payment date, and on the last
day of the Bank Purchase Period or, if earlier, the date on which the
Available Commitment is terminated or reduced to zero. After the occurrence
of an Event of Termination and prior to the Purchase Termination Date, the
Available Commitment shall not be deemed to have been reduced during the
period by reason of such Event of Termination.
SECTION 2.6 Request for Extension of Stated Expiration Date. No
earlier than five months and no later than three months prior to the then
applicable Stated Expiration Date, the Company may request that the Bank
extend the Stated Expiration Date for an additional 364-day period. If the
Company shall make such a request, the Bank shall, within thirty (30) days of
receipt of such request, notify the Company, the Trustee and the Bond Insurer
in writing whether or not the Bank consents to such request and, if the Bank
does so consent, the conditions of such consent (including conditions
relating to commissions payable, legal documentation and the consent of the
Trustee). If the Bank shall not so notify the Company, the Authority, the
Trustee and the Bond Insurer, the Bank shall be deemed not to have consented
to such request. The Company acknowledges and agrees that the Bank has sole
discretion in deciding whether or not to extend the Stated Expiration Date.
The Bank agrees, upon satisfaction of all of its conditions for extension
(including, without limitation, the payment of any renewal fees and the costs
and expenses of effecting the extension of the Stated Expiration Date), to
issue its extension, either in the form of an amendment hereto or in the form
of a new agreement, at least 30 days prior to the then applicable Stated
Expiration Date.
ARTICLE 3
THE BANK RATE
SECTION 3.1 Applicable Interest Rate; Other Interest Provisions.
(a) Bank Rate. Any Bond purchased by the Bank pursuant to this
Agreement shall thereupon become a Bank Bond and shall bear interest at the
Bank Rate for the period commencing from the date that the Bank shall have
purchased such Bond and continuing until such Bond is paid in full or
remarketed in accordance with the Indenture and Section 2.4(a) hereof or
purchased by the Company in accordance with Section 2.4(b) hereof. The "Bank
Rate" for any Bank Bond shall be a rate per annum equal to the Base Rate,
unless and until the Company provides the Bank three Euro-Dollar Business
Days' prior notice (i) that it elects to have such Bank Bonds bear interest
at Applicable LIBOR, and (ii) of the Interest Period applicable thereto, in
which case such Bank Bonds shall bear interest based at Applicable LIBOR for
the Interest Period requested by the Company; provided that the Bank Rate
shall be subject to adjustment as hereinafter specified in paragraph (b) or
(c) below and subject to the limitations set forth in Sections 3.3, 3.4, 3.5
and 3.6; and provided, further, that at least three Euro-Dollar Business Days
prior to the end of any Interest Period, if the Company has not requested a
continuation of or change in such Interest Period, or fails to elect an
Interest Period, the Bank Bonds, upon the expiration of the then current
Interest Period, shall bear interest at the Base Rate until such time as the
Company has provided proper notice of an election pursuant to this Section
3.1(a). Notwithstanding anything to the contrary contained elsewhere in this
Agreement, if an Event of Termination shall have occurred and be continuing,
the Company may not elect Applicable LIBOR as the Bank Rate. The Bond
Insurer shall, pursuant to the Insurance Policy, guarantee the payment of
interest on the Bank Bonds at the Bank Rate. All accrued interest on Bank
Bonds shall be payable on each Interest Payment Date.
(b) Overdue Rate. If any obligation of the Company under this
Agreement (including, without limitation, the Company's obligations pursuant
to Sections 2.4(b)or 2.4(c)) is not paid when due (whether by acceleration,
redemption or otherwise), such overdue principal payment or other obligation
shall bear interest from the date such principal amount or other obligation,
as the case may be, was due until paid in full (after as well as before
judgment) at a rate per annum (computed on the basis of a year of 360 days
and actual days elapsed) equal to the Base Rate from time to time in effect
plus 2%, such interest to be payable on demand.
(c) Deferred Interest. For any period during which Bank Bonds are
outstanding and as to each Interest Period, in the event that the amount of
interest which would be payable on the Bank Bonds (calculated at the Bank
Rate for such Interest Period, or in the case of the payment of the
Differential Interest Amount, if any, on a Bank Bond, for the period from the
date of the most recent Interest Payment Date through but not including the
date on which such Bank Bond is remarketed) exceeds the Maximum Interest
Rate, the amount of such excess shall not be payable on the Interest Payment
Date for such Interest Period as interest on such Bank Bonds but shall be
deferred ("Deferred Interest"). Deferred Interest shall be allocated among
the Bank Bonds outstanding on such Interest Payment Date based upon the
principal amount thereof and the length of time such Bank Bonds were
outstanding during the Interest Period related to such Interest Payment Date.
Deferred Interest arising on any Interest Payment Date (i) shall, to the
extent permitted by law, bear interest (compounded quarterly on the last day
of each succeeding March, June, September and December) at a rate per annum
equal to the Base Rate plus 2% (computed on the basis of a year of 360 days
and actual days elapsed) until paid in full and (ii) shall become payable,
together with interest thereon, to the extent permitted by law, on the next
succeeding Interest Payment Date or Dates to the extent the interest
(including Deferred Interest and, to the extent permitted by law, interest on
Deferred Interest) payable on the Bank Bonds (if any) for the Interest Period
ending on such Interest Payment Date does not exceed the Maximum Interest
Rate. All amounts of interest payable on a Bond which is a Bank Bond,
including without limitation, Deferred Interest (and interest thereon, to the
extent permitted by law), for so long as such Bond shall remain a Bank Bond,
shall constitute interest on such Bond and shall be insured by the Insurance
Policy. To the extent Deferred Interest (or, to the extent permitted by law,
any interest thereon) shall be unpaid with respect to Bank Bonds, and such
Bonds shall be redeemed or remarketed or purchased by the Company or shall
otherwise cease to be Bank Bonds, such unpaid Deferred Interest (including,
to the extent permitted by law, any unpaid interest thereon) shall be
converted into a fee payable to the Bank (herein, the "Deferred Interest Fee
Amount") and shall bear interest at a rate per annum equal to the Base Rate
plus 2% (computed as aforesaid), compounded quarterly on the last day of each
succeeding March, June, September and December; provided, however, that on
the last Interest Payment Date or, if earlier, the date of the occurrence of
an Event of Termination, a fee equal to the entire remaining Deferred
Interest Fee Amount (the "Final Deferred Interest Fee Amount") shall be paid
by the Company to the Bank and any Bank Bondholders. The Bank and any Bank
Bondholder, by acceptance of the Bank Bonds, acknowledge that payment of any
Deferred Interest Fee Amount and any interest thereon (including the Final
Deferred Interest Fee Amount and any interest thereon) are not insured under
the terms of the Insurance Policy.
(d) Payment of Interest. On each Interest Payment Date, the
Company shall pay or cause to be paid to the Bank all interest then accrued
and unpaid on the Bank Bonds, including, without limitation, any unpaid
Differential Interest Amount.
SECTION 3.2 Place of Payment, Etc. All payments to the Bank
hereunder shall be made without set-off or counterclaim in lawful currency of
the United States and in immediately available funds at the Bank's office and
in accordance with the instructions specified opposite the Bank's name on the
signature page of this Agreement, or by such other method as the Bank may
specify in writing, after (a) 3:00 p.m., New York City time, on the due date
thereof if the Bank or the Trustee has informed the Company of such amount on
or before 12:00 noon on such day or (b) if the Bank or the Trustee notifies
the Company of such amount after 12:00 noon, New York City time, on any day,
12:00 noon, New York City time, on the Business Day immediately following the
date of such notice.
SECTION 3.3 Taxes. All payments to the Bank hereunder shall be
made free and clear of any and all present and future taxes, levies, imports,
duties, deductions, withholdings, fees, liabilities and similar charges
("Taxes"), unless any Taxes are required by law to be withheld or deducted.
If, as a result of any change in applicable law or regulations or in the
interpretation thereof by any governmental authority charged with the
administration thereof, or the introduction of any law or regulation, any
Taxes are required to be withheld or deducted from any amount payable to the
Bank hereunder, the amount payable will be increased to the amount which,
after deduction from such increased amount of all Taxes required to be
withheld or deducted therefrom, will yield to the Bank the amount stated to
be payable hereunder. The Company shall pay any such increases in amounts
payable hereunder to the extent such amounts are not paid by the Bond
Insurer. Notwithstanding the foregoing, the Company shall not be required to
pay any increased amounts pursuant to this Section 3.3 on account of
(a) Taxes measured by or based upon the overall net income of the Bank or (b)
United States withholding taxes that would not have been imposed but for the
failure of the Bank to be entitled to the benefits of the income tax treaty
between the United States and France or to deliver Form 1001, Form 4224, or
any similar form reasonably requested by the Company. The Bank shall give
notice to the Company of the imposition of any Taxes, provided any failure to
give such notice shall not relieve the Company of its obligations under this
Section 3.3. The Company will execute and deliver to the Bank at its request
such further instruments as may be necessary or desirable to give full force
and effect to any such increase. The Company will, upon the request of the
Bank, provide the Bank with evidence satisfactory to it of the payment of any
Taxes. If any Taxes required to be borne by the Company pursuant to this
Section 3.3 are paid by the Bank, the Company will, upon demand of the Bank,
reimburse the Bank for such payments, together with any interest, penalties
and expenses in connection therewith.
SECTION 3.4 Increased Costs; Funding Losses.
(a) Increased Costs. If any change, announced after the date
hereof, in applicable law, regulation, rule or directive, or any
interpretation thereof (including any request, guideline or policy, and
including, without limitation, Regulation D promulgated by the Board of
Governors of the Federal Reserve System as from time to time in effect) by
any authority charged with the administration or interpretation thereof:
(i) subjects the Bank to any tax with respect to this
Agreement on any amount paid or to be paid hereunder (other than any tax
excluded from indemnification pursuant to Section 3.3);
(ii) changes the basis of taxation of payments to the Bank of
any amounts payable hereunder (other than with respect to any tax
excluded from indemnification pursuant to Section 3.3);
(iii) imposes, modifies or deems applicable any reserve,
capital adequacy or deposit requirements against any assets held by,
deposits with or for the account of, or loans made or letters of credit
issued by, the Bank; or
(iv) imposes on the Bank any other condition affecting this
Agreement;
and the result of any of the foregoing is to increase the cost to the Bank of
maintaining this Agreement, or to reduce the amount of any payment (whether
of principal, interest or otherwise) receivable by the Bank hereunder,
including, without limitation, a reduction of the return to the Bank in
respect of these transactions calculated as a percentage of its assets or
equity, or any increase in cost resulting therefrom, or to require the Bank
to make any payment on or calculated by reference to the gross amount of any
sum received by it, in each case by an amount which the Bank in its sole
judgment reasonably deems material, then and in any such case:
(i) the Bank shall promptly notify the Company in writing of
such event;
(ii) the Bank shall promptly deliver to the Company a
certificate describing such event in reasonable detail together with the
date thereof, the amount of such increased cost or reduction or payment
and the way in which such amount has been calculated; and
(iii) the Company shall pay to the Bank, within thirty
(30) days after delivery of the certificate referred to in subsection
(ii) hereinabove, such an amount or amounts as will compensate the Bank
for such additional cost, reduction or payment for so long as the same
shall remain in effect.
(b) Funding Losses. If the Company makes any payment of
principal with respect to any advance (it being understood that the purchase
by the Bank of Bonds pursuant to this Agreement constitutes an advance for
purposes of this Section 3.4(b)) bearing interest based on LIBOR on any day
other than the last day of the Interest Period applicable thereto, or if any
Bank Bond bearing interest at a Bank Rate equal to Applicable LIBOR, is
remarketed or purchased prior to the end of the Interest Period applicable to
such Bank Bond, the Company shall reimburse the Bank on demand for any loss
(other than loss of the Applicable Margin) incurred by it in obtaining,
liquidating or re-employing deposits or other funding from third parties (and
any incidental costs relating thereto).
(c) Certificate. The certificate of the Bank, signed by an
officer of the Bank, as to additional amounts payable pursuant to this
Section 3.4 delivered to the Company shall be conclusive evidence of such
amounts absent manifest error. The benefit of this Section 3.4 shall be
available to the Bank regardless of any possible contention of invalidity or
inapplicability of any law, regulation, condition, directive or
interpretation.
SECTION 3.5 Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period with respect
to any advance bearing interest based on LIBOR (it being understood that the
purchase by the Bank of Bonds pursuant to this Agreement constitutes an
advance for purposes of this Section 3.5) (a) the Bank determines that
deposits in Dollars (in the applicable amounts) are not being offered in the
relevant market for such Interest Period or (b) LIBOR will not adequately and
fairly reflect the cost to the Bank of funding the advance hereunder for such
Interest Period, the Bank shall forthwith give notice thereof to the Company,
whereupon until the Bank notifies the Company that the circumstances giving
rise to such suspension no longer exist, the Base Rate shall replace LIBOR
for purposes of interest rate determinations hereunder for such Interest
Period (and all references herein to Applicable LIBOR for such purposes
shall, unless the context otherwise requires, be deemed to be references to
the Base Rate).
SECTION 3.6 Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank (including any applicable
lending office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for the Bank (including any applicable lending
office) to make, maintain or fund any advance (it being understood that the
purchase by the Bank of Bonds pursuant to this Agreement constitutes an
advance for purposes of this Section 3.6) bearing interest based on LIBOR,
the Bank shall forthwith give notice thereof to the Company, whereupon until
the Bank notifies the Company that the circumstances giving rise to such
suspension no longer exist, the obligation of the Bank to fund at LIBOR and
the right of the Company to request LIBOR shall be suspended. Before giving
any notice to the Company pursuant to this Section, the Bank shall designate
a different lending office if such designation will avoid the need for giving
such notice and will not, in the judgment of the Bank, be otherwise
disadvantageous to the Bank. If the Bank shall determine that it may not
lawfully continue to maintain and fund any outstanding LIBOR advance to
maturity and shall so specify in such notice, the Company shall elect that
such advance bear interest based on the Base Rate in a principal amount equal
to the principal amount of such affected LIBOR advance for an Interest Period
coincident with the remaining term of the Interest Period applicable to such
affected LIBOR advance.
ARTICLE 4
CONDITIONS PRECEDENT
SECTION 4.1 Conditions Precedent to Effectiveness of this
Agreement. The Bank's obligation to enter into and perform its obligations
under this Agreement is subject to the fulfillment, to the satisfaction of
the Bank and its counsel, of each of the following conditions as of the date
of this Agreement:
(a) The Act; the Resolution. Neither the Act nor the Resolution
shall have been revoked or rescinded, or modified or amended in any material
respect adverse to the interests of the Bank or the holders of the Bonds.
(b) Executed Documents. The Bank shall have received an executed
copy of this Agreement and executed or certified copies of each of the
Related Documents (other than the Bonds and the First Mortgage Bonds, of
which the Bank shall have received specimens thereof).
(c) Replacement of the Letter of Credit. All conditions contained
in the Original Indenture and the Loan Agreement for the replacement of the
Letter of Credit shall have been satisfied.
(d) The Insurance Policy. The Insurance Policy shall be effective
and shall provide for (i) the payment of interest on the Bank Bonds at the
Bank Rate and (ii) amortization of the Bank Bonds in equal semi-annual
installments during the Amortization Period. The Insurance Policy shall be
in substantially the form of Appendix E to the Reoffering Circular, shall
have been issued to the Trustee and shall provide that after the Bank has
purchased Tendered Bonds in accordance with the Indenture, the Bond Insurer
shall make scheduled payments of principal of and shall pay interest on Bank
Bonds at the Bank Rate and shall also provide for the amortization of Bank
Bonds during the Amortization Period.
(e) Certificate. The Bank shall have received a certificate from
the Company, dated the date of this Agreement and duly executed by an
Authorized Officer, stating that on and as of the date thereof, except as
otherwise disclosed to the Bank as of the date of this Agreement:
(i) the Company has obtained all consents, permits, licenses
and approvals of, has made all registrations and declarations with, and
has taken all other actions with respect to, governmental authorities
required under law to be obtained, made or taken by the Company, to
authorize the issuance and sale of the Bonds, the replacement of the
Letter of Credit, and the execution, delivery and performance of this
Agreement and the Related Documents to which the Company is a party and
the consummation of the transactions contemplated thereby, and all of
the foregoing remain in full force and effect;
(ii) to the best knowledge of the Authorized Officer executing
the certificate, no Event of Default or event which, with the giving of
notice or the passage of time or both would constitute an Event of
Default, has occurred or would occur after giving effect to the issuance
of the Bonds or this Agreement;
(iii) all representations and warranties of the Company
set forth in this Agreement and the Related Documents to which the
Company is a party are true and correct in all material respects, except
to the extent that any such representation or warranty relates solely to
a prior date;
(iv) the Company is not in default of its obligations under
this Agreement or any of the Related Documents to which it is a party;
(v) except for any pending or threatened action, suit,
investigation or proceeding disclosed in the Reoffering Circular or
otherwise disclosed to the Bank in writing prior to the date hereof (as
to which certification is not being made), there is no action, suit,
investigation or proceeding pending or, to the best knowledge of the
Authorized Officer executing the certificate, threatened (A) in
connection with the Bonds, the replacement of the Letter of Credit or
this Agreement or any of the other transactions contemplated by this
Agreement or the Related Documents, or (B) against or affecting the Com-
pany, the result of which is reasonably likely to have a materially
adverse effect on the business, financial condition or operations of the
Company or the ability of the Company to perform or observe any of its
duties, liabilities or obligations under this Agreement or any of the
Related Documents.
(f) Proceedings and Certifications. The Bank shall have received
a copy, certified by an Authorized Officer, of all proceedings taken by the
Company authorizing the transactions hereunder and contemplated hereby,
including, without limitation, the execution and delivery of this Agreement
and all other documents and agreements contemplated hereby, together with
such other certifications as to matters of fact as shall reasonably be
requested by the Bank or its counsel.
(g) Incumbency Certificate. The Bank shall have received a
certificate of the Secretary or Assistant Secretary of the Company certifying
the names and true signatures of the officials of the Company authorized to
sign this Agreement and the other documents to be delivered by the Company
hereunder, and shall also cover such other matters incident to the
transactions contemplated by this Agreement as the Bank or its counsel may
request.
(h) Opinion of Company Counsel. The Bank shall have received an
opinion addressed to it of Day, Berry & Howard, counsel to the Company, dated
the Closing Date, in form and substance satisfactory to the Bank and its
counsel.
(i) Opinion of Bond Counsel. The Bank shall have received the
Bond Counsel's opinion, addressed to it from Whitman Breed Abbott & Morgan,
as Bond Counsel.
(j) Opinion of Bond Insurer's Counsel. The Bank shall have
received the opinion of counsel to the Bond Insurer, dated the date of this
Agreement, in form and substance satisfactory to the Bank and its counsel.
(k) Reoffering Circular. The Bank shall have received the
Reoffering Circular with respect to the Bonds.
(l) Other Documents, Etc. The Bank shall have received such other
documents, certificates, and opinions as the Bank or its counsel may
reasonably request, including, without limitation, organizational documents
of the Authority, the Company, and the Bond Insurer, and all matters relating
to this Agreement and the Bonds shall be satisfactory to the Bank.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Bank to enter into and perform its
obligations under this Agreement, the Company hereby represents and warrants
solely to the Bank as follows:
SECTION 5.1 Organization. The Company is duly organized, validly
existing and in good standing under the laws of the State of Connecticut, and
has all requisite corporate power and authority to own or lease its
properties and to conduct its business as now conducted and as proposed to be
conducted, and is duly qualified and authorized to engage in business as a
public utility in the State of Connecticut.
SECTION 5.2 Authorization. The execution, delivery and
performance by the Company of this Agreement and the Related Documents to
which it is a party are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and (a) do not contravene,
violate or breach: (i) any law, regulation, order of any court or other
agency of government, or contractual restriction binding on or affecting the
Company or its properties; (ii) the Certificate of Incorporation or By-laws
of the Company; or (iii) any indenture, mortgage, loan agreement or other
contract or instrument to which the Company is a party or by which it or its
assets are bound; and (b) do not result in or require the creation of any
Lien (except as provided in or contemplated by this Agreement or the Related
Documents) upon or with respect to any of the Company's properties.
SECTION 5.3 Enforceability. This Agreement is, and the Related
Documents to which the Company is a party are, legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity
or at law).
SECTION 5.4 Approvals. No authorization of, approval or other
action by, and no notice to or filing with, any Governmental Authority is re-
quired for the due execution, delivery and performance by the Company of this
Agreement or any Related Document, except those which have been, or will be
simultaneously with the execution hereof, duly obtained or made and are in
full force and effect.
SECTION 5.5 Financial Information. (i) The audited balance sheet
of the Company as at December 31, 1995, and the audited statements of income
and cash flows of the Company for the fiscal year then ended as set forth in
the Company's Annual Report on Form 10-K for such fiscal year and (ii) the
unaudited balance sheet of the Company as at September 30, 1996 and the
unaudited statements of income and cash flows of the Account Party for the
nine-month period then ended as set forth in the Company's Quarterly Report
on Form 10-Q for the period then ended, fairly present in all material
respects the financial condition and results of operations of the Company at
and for the respective periods ended on such dates, and have been prepared in
accordance with generally accepted accounting principles consistently
applied. Since December 31, 1995, there has been no material adverse change
in the financial condition, operations, properties or prospects of the
Company and its Subsidiaries, if any, taken as a whole, except to the extent,
if any, described in the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1996 or in the Company's Current Reports on Form
8-K, dated January 31, 1996, March 30, 1996 and 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, or in Schedule 5.5 hereto.
SECTION 5.6 Litigation. Except for any pending or threatened
action, suit, investigation or proceeding as disclosed in the Reoffering
Circular or otherwise disclosed to the Bank in writing prior to the date
hereof (as to which no representation or warranty is being made), there is no
action, suit or proceeding (or to the best knowledge of the Company,
investigation) pending or, to the best knowledge of the Company, threatened
(a) in connection with this Agreement or any of the transactions contemplated
by this Agreement or the Related Documents, or (b) against or affecting the
Company, the result of which is reasonably likely to have a materially
adverse effect on the business, financial condition or operations of the
Company or the ability of the Company to perform or observe any of its
duties, liabilities or obligations under any of this Agreement or any of the
Related Documents.
SECTION 5.7 No Misrepresentations. Except for information
contained in the Reoffering Circular describing the Bank, the Authority, the
Bond Insurer or The Depository Trust Company, as to which no representation
or warranty is made, (a) the Reoffering Circular as of its issue date was,
and any supplement or amendment thereto will be, accurate in all material
respects for the purposes for which their use is or shall be authorized, and
(b) the Reoffering Circular as of its issue date did not, and any such
supplement or amendment will not, contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they are or were made,
not misleading.
SECTION 5.8 Environmental Matters. Except as disclosed or for
matters identified on Schedule 5.8 or in the Reoffering Circular (as to which
no representation or warranty is made):
(a) The operations of the Company comply in all respects with all
applicable Environmental Laws concerning environmental health and safety
except where the failure to comply would not have a material adverse effect
on the financial condition of the Company;
(b) The Company has obtained or made timely application for all
environmental, health and safety permits necessary for its operation. All
such permits previously obtained are in effect or timely application for
renewal thereof is pending, and no action to revoke the same is pending and
the period to appeal such permits have expired, and the Company is in
compliance with all terms and conditions of such permits except where the
failure to comply would not have a material adverse effect on the financial
condition of the Company;
(c) With respect to property currently or formerly owned or
operated by it, the Company is not (at the time of ownership or operation)
subject to any outstanding written notice or order from, or agreement with,
any governmental authority or other Person in respect to which the Company
(i) is required to take any Remedial Action which would or might reasonably
be expected to have a material adverse effect individually or in the ag-
gregate on the business, operations, prospects, assets or financial condition
of the Company or (ii) would be reasonably likely to be required to incur any
Environmental Liabilities and Costs arising from the Release or threatened
Release of a Contaminant into the environment that would or might reasonably
be expected to result in a material adverse effect on the business,
operations, prospects, assets or financial condition of the Company;
(d) The Company has not received written notification pursuant to
Environmental Laws that any of its current or past operations, or any by-
product thereof, is related to or subject to any investigation by any
governmental authority evaluating whether any Remedial Action is needed to
respond to a Release or threatened Release of a Contaminant into the
environment, which investigation is reasonably likely to lead to the Company
having to take Remedial Action, or having to incur Environmental Liabilities
and Costs, in each case which would have a material adverse effect on the
business, operations, prospects, assets or financial condition of the
Company; and
(e) The Company has not filed any notice under any applicable
Environmental Law reporting a Release of a Contaminant into the environment
which is reasonably likely to lead to any Governmental Authority or any other
Person having to take Remedial Action or having to incur Environmental
Liabilities and Costs, which would have a material adverse effect on the
business, operations, prospects, assets or financial condition of the
Company.
SECTION 5.9 Investment Company Act. The Company is not an
"investment company", or a company "controlled by an investment company"
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 5.10 Public Utility. All outstanding shares of capital
stock having ordinary voting power for the election of directors of the
Company have been validly issued, are fully paid and nonassessable, and are
owned beneficially by NU, free and clear of any Lien. NU is a "holding
company" (as defined in the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act")). Except for the post-closing filing on Form U-6B-2
required to be made with the Securities and Exchange Commission pursuant to
the 1935 Act, the Company is not required to obtain any consents or make any
filings pursuant to the 1935 Act in order to execute, deliver and perform
this Agreement or any of the Related Documents to which it is a party.
SECTION 5.11 All Other Representations and Warranties Accurate.
All representations and warranties made by the Company in any of the Related
Documents are true and complete in all material respects.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as this Agreement is in effect, and until all amounts
payable under any of this Agreement or the Bank Bonds are indefeasibly paid
in full, the Company agrees, solely for the benefit of the Bank, that it will
perform and observe the covenants set forth below:
SECTION 6.1 Financial Statements. The Company will furnish to the
Bank:
(a) as soon as available and in any event within 105 days after
the end of each fiscal year of the Company, a copy of the Company's report on
Form 10-K submitted to the Securities and Exchange Commission with respect to
such fiscal year, or, if the Company ceases to be required to submit such
report, a copy of the annual audit report for such year for the Company
including therein a consolidated balance sheet of the Company as of the end
of such fiscal year and consolidated statements of income and retained
earnings and of cash flows of the Company for such fiscal year, all in
reasonable detail and certified by (i) a nationally-recognized independent
public accountant and (ii) by the Chief Financial Officer, Treasurer,
Assistant Treasurer or Comptroller of the Company as having been prepared in
accordance with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements referred to in
Section 5.5; and
(b) as soon as available and in any event within 60 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Company, a copy of the Company's Quarterly Report on Form 10-Q submitted to
the Securities and Exchange Commission with respect to such quarter, or if
the Company ceases to be required to submit such report, a consolidated
balance sheet of the Company as of the end of such fiscal quarter and
consolidated statements of income and retained earnings and of cash flows of
the Company for the period commencing at the end of the previous fiscal year
and ending with the end of such fiscal quarter, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the Chief Financial
Officer, Treasurer, Assistant Treasurer or Comptroller of the Company as
having been prepared in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements referred to in Section 5.
SECTION 6.2 Certificates; Other Information. The Company will
furnish to the Bank:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Event of Default or event which with notice or lapse of time or both
would become an Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.1(a) and (b), a certificate of an Authorized
Officer stating that, to the best of such officer's knowledge, the Company
during such period has in all material respects observed or performed all of
its covenants and other agreements, and satisfied every condition, contained
in this Agreement and the Related Documents to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any Event
of Default or event which with notice or lapse of time or both would become
an Event of Default, in each case except as specified in such certificate;
(c) promptly after the filing thereof, copies of each prospectus
(excluding any prospectus contained in any Form S-8), and Current Report on
Form 8-K, if any, which the Company files with, the Securities and Exchange
Commission or any governmental authority which may be substituted therefor;
and
(d) promptly, such additional financial and other information as
the Bank may from time to time reasonably request.
SECTION 6.3 Payment of Obligations. The Company shall pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed on it or its income, profits or revenues or any of
its properties, except when the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the
Company.
SECTION 6.4 Conduct of Business and Maintenance of Existence;
Merger.
(a) The Company shall continue to engage in business as a public
utility under the laws of the State of Connecticut and preserve, renew and
keep in full force and effect its corporate existence and take all reasonable
action to maintain all rights, licenses, approvals, privileges and franchises
necessary or desirable in the normal conduct of its business, except as
otherwise permitted by Sections 6.4(b) and 6.5; comply with all of its
contractual obligations and all applicable laws except to the extent that
failure to comply therewith would not, in the aggregate, have a material
adverse effect on the business, operations, property or financial or other
condition of the Company.
(b) Nothing contained in this Agreement shall prevent any lawful
consolidation or merger of the Company with or into any other corporation or
corporations lawfully authorized to acquire and operate the properties of the
Company, or a series of consolidations or mergers, in which the Company or
its successor or successors shall be a party, or any sale of all or
substantially all of the properties of the Company as an entirety to a
corporation lawfully authorized to acquire and operate the same; provided
that, upon any such consolidation, merger of the Company into another
corporation or sale, the corporation formed by such consolidation, or into
which such merger may be made, or making such purchase shall execute and
deliver to the Bank an instrument, in form and substance reasonably
satisfactory to the Bank, whereby such corporation shall effectively assume
the due and punctual payment of any amounts due hereunder and the due and
punctual performance and observance of all covenants and agreements to be
performed by the Company pursuant to this Agreement; and provided, further,
that immediately after such consolidation, merger or sale no Event of Default
shall have occurred and be continuing; and, thereupon, such corporation shall
succeed to and be substituted for the Company hereunder with the same effect
as if such successor corporation had been named herein.
(c) Every such successor corporation shall possess, and may
exercise, from time to time, each and every right and power hereunder of the
Company, in its name or otherwise; and any act, proceeding, resolution or
certificate by any of the terms of this Agreement, required or provided to be
done, taken and performed or made, executed or verified by any board or
officer of the Company shall and may be done, taken and performed or made,
executed or verified with like force and effect by the corresponding board or
officer of any such successor corporation.
(d) If consolidation, merger or sale or other transfer is made as
permitted by this Section, the provisions of this Section shall continue in
full force and effect and no further consolidation, merger or sale or other
transfer shall be made except in compliance with the provisions of this
Section 6.4.
SECTION 6.5 Maintenance of Property; Insurance. The Company shall
keep all property useful and necessary in its business in good working order
and condition, except where the failure to do so would not have a material
adverse effect on the business, operations, property or financial or other
condition of the Company; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts
and against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business; and fur-
nish to the Bank, upon written request, full information as to the insurance
carried.
SECTION 6.6 Inspection; Books and Records; Discussions. The
Company shall keep proper books of records and account in conformity with
GAAP and all applicable laws in which entries shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of the Bank to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the
Company with officers and employees of the Company and with its independent
certified public accountants; provided that the foregoing shall not require
the Company to waive any attorney-client privilege or violate any
confidentiality agreements to which it is a party.
SECTION 6.7 Notices. The Company shall give notice to the Bank
promptly after the Company has knowledge:
(a) of the occurrence of any Event of Default or event which with
notice or lapse of time or both would become an Event of Default;
(b) of the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with respect to
any Plan, or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings
or the taking of any other action by the PBGC or the Company or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from, or the termination, Reorganization or Insolvency of, any Plan; and
(c) of any notices received from the Bond Insurer.
Each notice pursuant to this section shall be accompanied by a statement of
an Authorized Officer setting forth details of the occurrence referred to
therein and stating what action the Company proposes to take with respect
thereto, it being understood and agreed that timely delivery of the financial
statements and reports required by Section 6.2(c) will fulfill the notice
requirements of this Section 6.7 with respect to the information contained in
such financial statements and reports.
SECTION 6.8 Indemnity.
(a) The Company will indemnify, defend and hold harmless the Bank,
its officers, directors, employees and agents, from and against all damages,
losses, liabilities, penalties, judgments, costs or expenses which may be
incurred as a result of any claims, suits, actions, investigations or other
proceedings (each, a "Claim") which may be threatened or instituted against
any such indemnified person by any third party by reason of or in connection
with (i) any violation or alleged violation by the Company of any
Environmental Law, (ii) the presence, handling, use, transportation or dispo-
sal by the Company, or allegation thereof, of Hazardous Substances, (iii) the
imposition of Environmental Liabilities and Costs on the Company or (iv) the
operation of the Company other than by the Bank or the Bank's designee.
(b) To the extent permitted by law, the Company will indemnify,
defend and hold harmless the Bank, its officers, directors, employees and
agents, from and against all damages, losses, liabilities or reasonable costs
or expenses which may be incurred as a result of any Claim (other than any
Claim with respect to Taxes) which may be threatened or instituted against
any such indemnified person by any third party by reason of or in connection
with the negotiation, execution, delivery, performance or transfer of, or
payment or failure to pay under, this Agreement or the Related Documents, or
in connection with the issuance and sale of the Bonds or the use of the
proceeds from the sale of the Bonds, including those Claims resulting from
any misstatement in or omission from the Reoffering Circular (except one
resulting from information supplied by the Bank or in sections dealing with
the Bank) or the use of the proceeds of any purchase of Bonds by the Bank
hereunder; provided that the Company shall not have any liability or
obligation to any such indemnified person to the extent that any such damage,
loss, liability, cost or expense results from such indemnified person's, or
the Bank's, gross negligence or willful misconduct.
ARTICLE 7
NEGATIVE COVENANTS
So long as this Agreement is in effect, and until all amounts
payable under this Agreement and the Bank Bonds are indefeasibly paid in
full, the Company agrees, solely for the benefit of the Bank, that unless the
Bank shall otherwise consent in writing:
SECTION 7.1 Amendment of Any Related Document. The Company shall
not enter into or consent to any amendment, modification or termination of
any Related Document, except (a) as may be required to comply with applicable
law, (b) as necessary to obtain a credit rating on the Bonds by S&P, Moody's
or any other rating agency then rating the Bonds, or (c) for amendments that
would not affect the rights and obligations of the Bank under such Related
Document. With respect to any amendment to any Related Document of the type
described in clause (a), (b) or (c) of the preceding sentence, the Bank
hereby agrees that it shall cooperate with the Company in delivering its
consent which may nevertheless be required under such Related Document.
ARTICLE 8
EVENTS OF DEFAULT; EVENTS OF TERMINATION
SECTION 8.1 Events of Default; Events of Termination.
(a) The occurrence of any of the following events shall constitute
an "Event of Default":
(i) The Company shall not (A) purchase any Bank Bonds when
required by this Agreement, (B) pay principal of or accrued interest on
any Bank Bond, when due, or (C) pay any other amount payable by the
Company to the Bank hereunder within two days of the applicable due date
thereof;
(ii) Any representation or warranty of the Company made in, or
deemed to have been made by the Company pursuant to, this Agreement or
any of the Related Documents to which the Company is a party, or by any
of its officials in any certificate, agreement, instrument or statement
contemplated by or made or delivered pursuant to or in connection
herewith or therewith (including, without limitation, the Reoffering
Circular), shall prove to have been incorrect in any material respect
when made or when deemed made;
(iii) Any "Event of Default" under the Indenture or any
"event of default" under the Loan Agreement shall have occurred and be
continuing;
(iv) The Company shall fail to perform or observe any covenant
or agreement set forth in Article 7;
(v) The Company shall fail to perform or observe any other
term, covenant or agreement (other than one described in any other
paragraph of this Section 8.1) contained in this Agreement or the
Related Documents on its part to be performed or observed, and any such
failure shall remain unremedied for thirty (30) days after written
notice thereof shall have been given to the Company by the Bank;
(vi) Any default or similar event shall occur under any
document evidencing indebtedness having an aggregate principal amount in
excess of $10,000,000 to which the Company is a party, the effect of
which is to permit the holder or holders of such indebtedness, or a
trustee or agent on behalf of such holder or holders, to cause any such
indebtedness to become due prior to its stated maturity, or any such
indebtedness shall be declared to be due and payable prior to its stated
maturity or shall not be paid when due;
(vii) The Company shall make a general assignment for the
benefit of creditors, file a petition in bankruptcy, be unable generally
to pay its debts as they become due, or be adjudicated insolvent or
bankrupt or there shall be entered any order or decree granting relief
in any voluntary or involuntary case commenced by or against the Company
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or the Company shall petition or apply to any court
or administrative body for the appointment of any receiver, trustee,
liquidator, assignee, custodian, sequestrator (or other similar
official) of the Company or of any substantial part of the Company's
properties, or shall commence any proceeding in a court of law for a
reorganization, readjustment of debt, dissolution, liquidation,
assignment or other similar procedure under the laws or statutes of any
jurisdiction, whether now or hereafter in effect, or there shall be
commenced against the Company any such proceeding in a court of law
which remains undismissed or not discharged, vacated or stayed within
ninety (90) days after commencement, or the Company by any act shall
indicate its consent to, approval of or acquiescence in any of the fore-
going or take any action for the purpose of effecting any of the
foregoing; or
(viii) The Company shall commence proceedings seeking to
limit its liability under this Agreement or the Bank Bonds.
(b) The occurrence of any of the following events shall constitute
an "Event of Termination":
(i) The Bond Insurer shall fail to pay: (A) principal of or
accrued interest on the Bonds, including, without limitation, accrued
interest at the Bank Rate on the Bank Bonds, when, as and in the amounts
required under the Insurance Policy, or (B) any amounts required to
amortize the Bank Bonds pursuant to Section 2.4(c);
(ii) Unless earlier replaced with an alternate insurance
policy in lieu of the Insurance Policy issued by a Bond Insurer
acceptable to the Bank, (A) the Insurance Policy for any reason ceases
to be in full force and effect or is declared by a court of competent
jurisdiction to be null and void, or (B) the Bond Insurer denies that it
has any further liability under the terms of the Insurance Policy;
(iii) Unless replaced with a Bond Insurer acceptable to
the Bank, a proceeding is instituted in a court having jurisdiction in
the premises seeking an order for relief, rehabilitation,
reorganization, conservation, liquidation or dissolution in respect to
the Bond Insurer or for any substantial part of the Bond Insurer's
property under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or other
similar official) and such proceeding is not terminated for a period of
thirty (30) consecutive days or such court enters any order granting the
relief sought in such proceeding or the Bond Insurer shall institute or
take any corporate action for the purpose of instituting any such
proceeding; or the Bond Insurer shall become insolvent or unable to pay
its debts as they mature or claims under any of its insurance policies
as such claims are made, shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law or shall consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or other similar official) of the Bond
Insurer or for any substantial part of its property, or shall make a
general assignment for the benefit of creditors, or shall fail generally
to pay its debts or claims as they become due, or shall take any
corporate action in furtherance of any of the foregoing; or
(iv) An AMBAC Adverse Change shall have occurred.
SECTION 8.2 Remedies.
(a) Upon the occurrence of an Event of Termination and so long as
such Event of Termination is continuing:
(i) the Bank may tender the Bank Bonds to the Company for
immediate repurchase;
(ii) the Bank may, upon notice to the Company (except that no
notice shall be required upon the occurrence of an Event of Termination
specified in Section 8.1(b)(ii) or (iii)), declare all accrued sums
payable to the Bank by the Company hereunder to be immediately due and
payable, whereupon the same shall become immediately due and payable,
without demand, presentment, protest or further notice of any kind, all
of which are expressly waived;
(iii) the Bank may pursue any remedy available to it as a
Bondholder under the Indenture;
(iv) the Bank may pursue any other remedy available to the
Bank under this Agreement or the Related Documents, at law or in equity;
and/or
(v) notify the Trustee, by delivery of a certificate in the
form of Exhibit C hereto (a "Certificate of Event of Termination") that
such Event of Termination has occurred and is continuing, and that the
Bank's obligations hereunder to purchase Tendered Bonds shall terminate
on the first Business Day following the forty-fifth day (the "Purchase
Termination Date") after the Trustee shall have received such
Certificate of Event of Termination. The Trustee hereby agrees to take
all necessary action under the Indenture to notify the holders of the
bonds of the Purchase Termination Date.
(b) Upon the occurrence and during the continuance of an Event of
Default, so long as no Event of Termination shall have occurred, (i) the
Company shall, or shall cause, the Bank Bonds to be amortized in accordance
with Section 2.4(c), or (ii) the Bank may pursue any remedies against the
Company available to it as a Bondholder under the Indenture or under this
Agreement or the Related Documents at law or in equity, including, without
limitation, seeking the specific performance by the Company of its
obligations hereunder.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Set-off; Limitation on Set-off.
(a) In addition to any rights now or hereafter granted under
applicable law (including, but not limited to, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, to
the fullest extent permitted under applicable law, during the continuance of
any Event of Default the Bank is hereby authorized at any time and from time
to time, without notice to the Company or to any other person or entity, any
such notice being hereby expressly waived, to set-off and to appropriate and
apply any and all deposits (general or special) by the Bank, and any other
indebtedness at any time held or owing by the Bank, to or for the credit or
the account of the Company against and on account of the accrued obligations
and liabilities of the Company to the Bank hereunder, irrespective of whether
or not the Bank shall have made any demand hereunder.
(b) Anything in paragraph (a) above to the contrary
notwithstanding but without modifying any other provision of this Agreement,
the Bank waives any right referred to in paragraph (a) above, and any other
right which it may have at law or otherwise to set-off and apply such de-
posits or indebtedness referred to in paragraph (a) above, if there shall be
a purchase by the Bank of Tendered Bonds pursuant to Section 2.2 hereof
hereunder during the pendency of any proceeding by or against the Company
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property; provided that
such waiver shall terminate and be of no force and effect when and to the
extent that both (i) the exercise of any such right would not result in the
Bank's being released, prevented or restrained from or delayed in fulfilling
the Bank's obligations hereunder and (ii) the absence of such waiver would
not result in the lowering or withdrawal by S&P, if the Bonds are rated by
S&P, of its rating of the Bonds.
(c) The Bank agrees promptly to notify the Company after the
exercise of any set-off and application referred to in paragraph (a),
provided that the failure to give such notice shall not affect the validity
of such set-off and application.
SECTION 9.2 Obligations Absolute. The obligations of the Company
under this Agreement shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms hereof under all cir-
cumstances whatsoever (provided that such circumstances shall not constitute
willful misconduct or gross negligence of the Bank) conforming to (g) below,
including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of this Agreement, the
Bonds, the Related Documents or any other agreement or instrument relating
thereto;
(b) any amendment or waiver of, extension of the Stated Expiration
Date of, increase in the Available Commitment of or consent to departure
from, this Agreement in conformity with the provisions of this Agreement;
(c) any amendment or waiver of, or consent to departure from the
Related Documents or any other agreement or instrument relating thereto
(other than this Agreement);
(d) the existence of any claim, set-off, defense or other right
which the Company may have at any time against the Trustee, any beneficiary
or any transferee of advances made by the Bank hereunder (or any persons or
entities for whom the Trustee, any such beneficiary or any such transferee
may be acting), the Paying Agent, the Bank (other than the defense of payment
to the Bank, or other performance, in accordance with the terms of this
Agreement), or any other person or entity, whether in connection with this
Agreement, any related agreement or instrument or any unrelated transaction,
agreement or instrument;
(e) any statement or any other document presented hereunder
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect whatsoever;
provided that any payment by the Bank in connection therewith shall not have
constituted gross negligence or willful misconduct of the Bank;
(f) payment by the Bank hereunder against presentation of a
demand, draft(f) or certificate which does not comply with the terms hereof;
provided that such payment shall not have constituted gross negligence or
willful misconduct of the Bank;
(g) the exercise or non-exercise by the Bank of any rights or
remedies it may have under or pursuant to this Agreement or the Related
Documents; and
(h) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, provided that such other circumstance or
happening shall not constitute willful misconduct or gross negligence of the
Bank.
SECTION 9.3 Liability of the Bank.
(a) The Company assumes all risks of the acts or omissions of the
Trustee, the Paying Agent and the Remarketing Agent and any transferee
beneficiary hereof with respect to their use of the proceeds hereof.
Neither the Bank nor any of its officers, directors, employees or agents
shall be liable or responsible for (i) the use which may be made of the
proceeds hereof or for any acts or omissions of the Trustee, the Paying
Agent, the Remarketing Agent or any transferee in connection therewith, (ii)
the validity, sufficiency or genuineness of documents, or of any endorse-
ment(s) thereon, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged, (iii) payment by
the Bank against presentation of documents which do not comply with the terms
hereof, including failure of any documents to bear any reference or adequate
reference to this Agreement, or (iv) any other circumstances whatsoever in
making or failing to make payment hereunder, except only that the Company
shall have a claim against the Bank, and the Bank shall be liable to the
Company, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by the Bank's willful misconduct or gross negligence in determining
whether documents presented hereunder comply with the terms of this
Agreement. In furtherance and not in limitation of the foregoing, the Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
(b) The Bank may receive, accept and pay any demands or other
documents and instruments (otherwise in order) signed by or issued to the
receiver, trustee in bankruptcy or custodian of anyone named herein as the
person by whom drafts, demands and other documents and instruments are to be
made or issued.
(c) The Bank shall not have any liability to the Company for, and
the Company hereby waives any right to object to, payment made hereunder
against a demand containing non-substantive variations in punctuation,
capitalization, spelling or similar matters. The determination whether a
demand has been made before the expiration hereof and whether a demand is in
proper and sufficient form for compliance herewith shall be made by the Bank
in its sole discretion, which determination shall be conclusive and binding
upon the Company; provided that such determination shall not have constituted
gross negligence or willful misconduct of the Bank.
SECTION 9.4 Confidentiality. The Bank acknowledges that certain of
the information to be furnished to it pursuant to this Agreement may be non-
public information. The Bank hereby agrees that it will keep all non-public
information to be furnished to it pursuant hereto confidential in accordance
with its normal banking procedures and, will make no disclosure to any other
Person of such information until the same shall have become public, except
(a) in connection with the enforcement or protection of the Bank's interests,
rights or remedies under this Agreement or any of the Related Documents, (b)
pursuant to subpoena or similar process, (c) to bank examiners and other
governmental authorities, (d) to independent auditors or counsel, (e) to any
parent or affiliate of the Bank, or (f) to any participant or proposed
participant pursuant to Section 9.6 hereof who has agreed to be bound by the
provisions of this Section 9.4.
SECTION 9.5 Costs, Expenses and Stamp Taxes.
(a) All costs and expenses paid or incurred by the Bank
(including, without limitation, reasonable attorneys' fees and disbursements,
but excluding overhead and other internal costs of the Bank) in connection
with the negotiation, preparation, review, execution and delivery of this
Agreement and the Related Documents shall be paid by the Company. The
Company agrees to pay on demand all costs and expenses paid or incurred by
the Bank, if any, in connection with the amendment or enforcement of this
Agreement and the Related Documents, and the protection of the rights of the
Bank hereunder and thereunder (including reasonable counsel fees and
disbursements but excluding overhead and other internal costs of the Bank).
(b) The Company shall pay all stamp and other similar taxes and
fees payable by the Bank in connection with the preparation, execution,
delivery, filing and recording of this Agreement and any other documents
contemplated hereby and agrees to save the Bank harmless from and against all
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes and fees.
SECTION 9.6 Participants. The Bank shall have the right to grant
participations from time to time (to be evidenced by one or more
participation agreements or certificates of participation) in this Agreement
to one or more other banking institutions; provided that (a) the Bank's
obligations to the Company under this Agreement shall remain unchanged,
(b) the Bank shall remain solely responsible to the Company for the
performance of such obligations, (c) the Company shall continue to deal
solely and directly with the Bank in connection with the Bank's rights and
obligations under this Agreement, and (d) the participant shall have agreed
to be bound by the provisions of Section 9.4 hereof. Each banking institu-
tion purchasing such a participation shall in the discretion of the Bank have
all rights of the Bank hereunder to the extent of the participation
purchased; provided that (i) no participant shall be entitled to receive
payment hereunder of any amount greater than the amount which would have been
payable to the Bank if the Bank had not sold a participation to such
participant, (ii) if and when the consent of the Bank shall be required
hereunder, the consent of such participant(s) shall not be required, (iii)
the Company shall not be required to provide notice or furnish information
hereunder to any such participant, and (iv) no participant shall be entitled
to the rights of the Bank to exercise remedies under Article VIII hereof.
Notwithstanding the foregoing, the Bank shall not be entitled to receive
payment of any amount under Article III hereof greater than the amount which
would have been payable to the Bank if the Bank had not sold a participation
to any participant.
SECTION 9.7 Extension of Maturity. If any payment to the Bank
would become due and payable other than on a Business Day, such payment shall
instead become due on the next preceding Business Day and, as applicable,
interest shall be payable in accordance with this Agreement up to the date
payment is actually made at the rate specified herein.
SECTION 9.8 Successors and Assigns. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by the Company, the
Bank and the Trustee and their respective successors and assigns.
Notwithstanding anything contained herein to the contrary, (a) the rights and
duties of the Company hereunder may not be assigned or transferred, except in
compliance with Section 6.4 or with the prior written consent of the Bank and
(b) the rights and duties of the Trustee hereunder may not be assigned except
with the prior written consent of the Bank.
SECTION 9.9 Modification or Waiver of this Agreement. This
Agreement is intended by the parties hereto as a final expression of their
agreement with respect to the subject matter hereof, and is intended as a
complete and exclusive statement of the terms and conditions of that agree-
ment. No modification or waiver of any provision of this Agreement
(including this Section 9.9) shall be effective unless the same shall be in
writing and signed by the Bank and the Company and the Trustee. Any
modification or waiver referred to in this Section 9.9 shall be effective
only in the specific instance and for the specific purpose for which given.
No notice to or demand on the Company in any case shall entitle the Company
to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 9.10 No Waiver of Rights by the Bank; Cumulative Rights.
No course of dealing or failure or delay on the part of the Bank in
exercising any rights, power or privilege hereunder will operate as a waiver
of such right and no single or partial exercise of any right shall preclude
any other or further exercise or the exercise of any right, power or
privilege. The rights of the Bank under this Agreement are cumulative and
not exclusive of any rights or remedies which the Bank would otherwise have.
SECTION 9.11 Severability. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall negotiate in good faith to replace any
invalid, illegal or unenforceable provision with a valid provision, which, to
the extent possible, will preserve the economic effect of the invalid,
illegal or unenforceable provisions.
SECTION 9.12 Notices. All notices and communications hereunder
shall be given by hand delivery, with a receipt being obtained therefor, by
United States certified or registered mail, or by telegram, telex or by other
telecommunication device capable of creating written record of such notice
and its receipt. To the extent that any telecommunication notice is
permitted hereunder, the parties hereto shall provide appropriate telex and,
to the extent available, facsimile numbers. Notices and communications
hereunder shall be effective when received and shall be sent to the following
addresses (or to such other address(es)) of which either party hereto shall
notify the other party in accordance herewith):
If to the Bank, Societe Generale
to: New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: Gordon R. Eadon
with a copy to: Christy & Viener
620 Fifth Avenue
New York, New York 10020
Attention: Steven R. Berger, Esq.
If to the Company, The Connecticut Light and Power Company
to: c/o Northeast Utilities Service Company
107 Selden Street
Berlin, Connecticut 06037
Attention: Assistant Treasurer
If to the Trustee: Fleet National Bank
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
SECTION 9.13 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York.
SECTION 9.14 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original but both or
all of which, when taken together, shall constitute but one document, and
shall become effective when copies hereof which, when taken together, bear
the signatures of each of the parties hereto shall be delivered to the
Company and the Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto
authorized as of the date first written above.
THE CONNECTICUT LIGHT AND POWER COMPANY
By: /s/David R. McHale
Assistant Treasurer--Finance
Payment Instructions:
SOCIETE GENERALE, New York Branch
Societe Generale
New York
ABA No. 026004226
Re: The Connecticut Light and Power Company
By: /s/Gordon R. Eadon
Vice President
FLEET NATIONAL BANK, as Trustee
By: /s/Kathy A. Larimore
Assistant Vice President
SCHEDULE 5.5
Material Adverse Change
None.
SCHEDULE 5.8
Environmental Matters
None.
NOTICE OF BANK PURCHASE
(Liquidity Purchase)
The undersigned, a duly authorized officer of FLEET NATIONAL BANK,
as paying agent (the "Paying Agent"), hereby certifies to Societe Generale,
New York Branch (the "Bank"), in accordance with the Standby Bond Purchase
Agreement (the "Standby Bond Purchase Agreement"), dated January 23, 1997,
among The Connecticut Light and Power Company, a corporation organized and
existing and qualified to do business as a public utility under the laws of
the State of Connecticut (the "Company") the Bank and the Trustee (all
capitalized terms herein having the meanings ascribed thereto in the Standby
Bond Purchase Agreement), that:
1. Notice of tender of Bonds for purchase pursuant to Section
9.18 of the Indenture has been received.
2. Insufficient moneys are available for such purchase pursuant
to Section 9.18(B) of the Indenture.
3. ____(a) The total principal amount of the Bonds (or portions
thereof) for which there is not sufficient moneys referred to above is
$____________, which amount does not exceed the Available Principal
Commitment.
____(b) Accrued, but unpaid, interest on such Bonds (or
portions thereof)(other than Defaulted Interest), computed in accordance with
the terms of the Bonds and the Indenture, as of the date of delivery hereof
to the Bank is $____________, which amount does not exceed the Available
Interest Commitment.(1)
4. The Bonds referred to above are hereby tendered to the Bank
for purchase pursuant to the Standby Bond Purchase Agreement on the date
hereof for an aggregate purchase price of $_______________,(2) which amount
does not exceed the Available Commitment.
5. Subject to Section 2.3(f) of the Indenture, upon completion of
purchase, the Paying Agent will cause the Trustee to (a) register such Bonds,
or if a Bond for which notice of tender for purchase pursuant to Section 9.18
of the Indenture has been given is not delivered, to issue a new Bond in
replacement of the undelivered Bond, in the name of the Bank or if directed
in writing by the Bank its nominee or designee on the Bond Register, and (b)
promptly deliver, or cause to be delivered, in a manner consistent with
Section 2.3(G)(9) of the Indenture, such Bonds to the Paying Agent (to be
held by the Paying Agent in trust for the benefit of the Bank) or as the Bank
may otherwise direct in writing in accordance with the Standby Bond Purchase
Agreement.
6. The Bank Purchase Date is ______________, 19__ and the wire
instructions for payment of the Purchase Price are as follows: [insert
payment instructions].
(1) If the Bonds are to be purchased on an interest payment date therefore,
this amount will exclude the interest payable on such date. If the exclusion
results in no interest, delete (b).
(2) Insert the sum of principal and accrued interest shown in pargraphs 3(a)
and (b).
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _______ day of ____________, 199_.
/s/
as Paying Agent
By: /s/
Title:
NOTICE OF BANK PURCHASE
(Mandatory Purchase)
The undersigned, a duly authorized officer of FLEET NATIONAL BANK,
as paying agent (the "Paying Agent"), hereby certifies to Societe Generale,
New York Branch (the "Bank"), in accordance with the Standby Bond Purchase
Agreement (the "Bond Purchase Agreement"), dated January 23, 1997, among The
Connecticut Light and Power Company, a corporation organized and existing and
qualified to do business as a public utility under the laws of the State of
Connecticut (the "Company"), the Bank and the Trustee (all capitalized terms
herein having the meanings ascribed thereto in the Standby Bond Purchase
Agreement), that:
1. Bonds (or portions thereof) have been tendered or deemed
tendered for mandatory purchase pursuant to Section 9.18 of the Indenture in
connection with the occurrence of [a Proposed Conversion Date] [the Stated
Expiration Date] [a default tender pursuant to the Bank's notice of
termination dated _________________].
2. Insufficient moneys are available for such purchase pursuant
to Section 9.18(B) of the Indenture.
3. ______(a) The total principal amount of the Bonds referred to
above is $_________, which amount does not exceed the Available Principal
Commitment.
______(b) Accrued, but unpaid interest on such Bonds(other
than Defaulted Interest), computed in accordance with the terms of the Bonds
and the Indenture, as of the date of delivery hereof to the Bank is
$___________, which amount does not exceed the Available Interest
Commitment.(1)
4. The Bonds referred to above are being delivered to the Bank
for purchase pursuant to the Standby Bond Purchase Agreement on the date
hereof for an aggregate purchase price of $_________(2) which amount does not
exceed the Available Commitment.
5. Subject to Section 2.3(f) of the Indenture upon completion of
purchase, the Paying Agent will cause the Trustee to (a) register such Bonds
or, if a Bond subject to mandatory purchase pursuant to Section 9.18 of the
Indenture is not delivered, to issue a new Bond in replacement of the
undelivered Bond, in the name of the Bank or if directed in writing by the
Bank its nominee or designee on the Bond Register, and (b) promptly deliver,
or cause to be delivered, in a manner consistent with Section 2.3(G)(9) of
the Indenture, such Bonds to the Paying Agent (to be held by the Paying Agent
in trust for the benefit of the Bank) or as the Bank may otherwise direct in
writing in accordance with the Standby Bond Purchase Agreement.
6. The Bank Purchase Date is ________, 199_ and the wire
instructions for payment of the Purchase Price are as follows: [insert
payment instructions].
(1) If the Bonds are to be purchased on an interest payment date therefor,
this amount will exclude the interest payable on such date. If the exclusion
results in no interest, delete (b).
(2) Insert the sum of principal and accrued interest shown in pargraphs 3(a)
and (b).
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ______ day of ___________, 199_.
as Paying Agent
By:
Title:
EXHIBIT C
CERTIFICATE OF EVENT OF TERMINATION
Date:
___________________, as Trustee
[address]
Re: Standby Bond Purchase Agreement, dated January 23, 1997, among The
Connecticut Light and Power Company, Societe Generale, New York
Branch, and Fleet National Bank, as trustee (the "Standby Bond
Purchase Agreement")
Societe Generale, acting through its New York Branch (the "Bank")
hereby certifies to __________________, as Trustee, with respect to the
Standby Bond Purchase Agreement as follows:
1. Capitalized terms not otherwise defined herein shall have the
same respective meanings as in the Standby Bond Purchase Agreement.
2. One or more of the following event(s) has occurred and is
continuing:
(i) The Bond Insurer has failed to pay: (A) principal of
or accrued interest on the Bonds, including, without limitation, accrued
interest at the Bank Rate on the Bank Bonds, or (B) an amount required
to amortize the Bank Bonds pursuant to Section 2.4(c) of the Standby
Bond Purchase Agreement, when, as and in the amounts required under the
Insurance Policy.
(ii) the Insurance Policy has not been replaced with an
insurance policy issued by a Bond Insurer acceptable to the Bank, and
(A) either the Insurance Policy for any reason has ceased to be in full
force and effect or has been declared by a court of competent
jurisdiction to be null and void, or (B) the Bond Insurer has denied
that it has any further liability under the terms of the Insurance
Policy;
(iii) the Bond Insurer has not been replaced with a
bond insurer acceptable to the Bank, and a proceeding has been
instituted in a court having jurisdiction in the premises seeking an
order for relief, rehabilitation, reorganization, conservation,
liquidation or dissolution in respect to the Bond Insurer or for any
substantial part of the Bond Insurer's property under any applicable
bankruptcy, insolvency or other similar law now in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or other similar official), and such proceeding has not
been terminated for a period of thirty (30) consecutive days or such
court has entered an order granting the relief sought in such proceeding
or the Bond Insurer has instituted or taken corporate action for the
purpose of instituting any such proceeding; or the Bond Insurer has
become insolvent or unable to pay its debts as they mature or claims
under any of its insurance policies as such claims are made, has
commenced a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, has consented to the
entry of an order for relief in an involuntary case under any such law
or has consented to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Bond Insurer or for any substantial part
of its property, or has made a general assignment for the benefit of
creditors, or has failed generally to pay its debts or claims as they
become due, or has taken corporate action in furtherance of any of the
foregoing; or
(iv) an AMBAC Adverse Change has occurred.
3. Accordingly, the Bank hereby notifies the Trustee that the
Bank's obligations under the Standby Bond Purchase Agreement to purchase
Tendered Bonds shall terminate on the first Business Day following the forty-
fifth day after the Trustee shall have received this Certificate of Event of
Termination and requests that the Trustee take the actions required to be
taken to notify the holders of the bonds under the Amended and Restated
Indenture of Trust, dated as of May 1, 1996, and Amended and Restated as of
January 1, 1997 (as amended, supplemented or modified from time to time, the
"Indenture"), between the Connecticut Development Authority and the Trustee,
that such Event of Termination has occurred and of the Purchase Termination
Date.
SOCIETE GENERALE, New York Branch
By