Exhibit 10.31.4
PURCHASE AND SALE AGREEMENT
AGREEMENT ("Agreement") entered into this 28th day of July, 1997 by and
between CONNECTICUT GENERAL LIFE INSURANCE COMPANY, a Connecticut corporation
having its principal place of business in Bloomfield, Connecticut ("CGLIC"),
LIFE INSURANCE COMPANY OF NORTH AMERICA, a Pennsylvania corporation having
its principal place of business in Philadelphia, Pennsylvania ("LINA"), and
LIFE INSURANCE COMPANY OF GEORGIA, a Georgia corporation having its principal
place of business in Atlanta, Georgia ("LIC") (CGLIC, LINA and LIC are
sometimes individually referred to herein as "Seller" and collectively as the
"Sellers"); WESTERN NATIONAL LIFE INSURANCE COMPANY a Texas corporation
having its principal place of business in Houston, Texas ("WLIC"), ML CBO
VII, Series 1997-C-3 ("ML CBO3"), a Cayman Islands entity having its
principal place of business in George Town, Grand Cayman (WLIC and ML CBO3
are sometimes individually referred to herein as "Purchaser" and collectively
as the "Purchasers"), and THE ROCKY RIVER REALTY COMPANY, a Connecticut
corporation having its principal place of business in Berlin, Connecticut
(the "Company").
All of Sellers' agreements hereunder are subject to the provisions of
Section 5 below.
Sellers own an aggregate of $11,784,689.32 principal amount of 8.81%
Guaranteed Senior Secured Notes, Series A, due April 14, 2007 (the "Series A
Notes") issued by the Company in the original aggregate principal amount of
$15,000,000 pursuant to Note Agreements dated April 14, 1992 between the
Sellers, the Company and certain others (collectively, the "Note Agreements")
and certain other Operative Agreements, as defined in the Note Agreements.
Purchasers desire to purchase $5,892,344.81 aggregate principal amount of the
Series A Notes (the "Notes") from Sellers, as set forth more fully below and
in Exhibit A hereto. Simultaneously with the consummation of the
transactions contemplated herein, the Company is separately repurchasing from
Sellers the remaining outstanding Series A Notes not being purchased and sold
hereunder. Capitalized terms used herein which are defined in the Note
Agreements have the respective meanings set forth therein, unless otherwise
defined herein or the context otherwise requires.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and agreements herein
contained, the parties have agreed and do hereby agree as follows:
1. Transfer of Notes. Upon the terms set forth in this Agreement,
Sellers will sell, assign, transfer and deliver to Purchasers, and Purchasers
will purchase from Sellers, at the Closing (as defined in Section 6) and as
contemplated in the escrow letter agreement dated July 28, 1997 among the
Sellers, the Purchasers, the Company and the individuals to whom it is
addressed (the "Escrow Letter"), the Notes and all the rights of the Sellers
with respect to the Notes under the related Note Agreements, free and clear
of all liens, charges and encumbrances of any nature whatsoever, in the
principal amounts and for the amounts to be paid to the Sellers set forth on
Exhibit A hereof.
2. Representations and Warranties of Sellers. Each of the Sellers
represents and warrants for itself only to the Purchasers that:
(a) Organization of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state
of incorporation, and has valid corporate authority to execute and deliver
this Agreement and to sell the Notes held by it as provided herein.
(b) Authority. The execution, delivery and performance of this
Agreement, the Note Agreement and the other Operative Agreements to which
Seller is a party and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized and approved by
Seller and no further corporate action by Seller is or shall be required for
such execution, delivery or performance. This Agreement and the Operative
Agreements to which Seller is a party have been duly executed and delivered
by Seller and constitute the legal, valid and binding Agreements of Seller
enforceable against Seller in accordance with their terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general application affecting the rights of
creditors and by general equity principles. No governmental or regulatory
approval is necessary for the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby by the
Sellers.
(c) No Liens. When sold to Purchasers as provided herein, the
Notes will be free of all liens, charges and encumbrances of any nature
whatsoever.
(d) No Registration. Based on Purchasers' representations herein,
the sale of the Notes hereunder is not required to be registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities or
"Blue Sky" laws.
3. Representations and Warranties of Purchasers. Each Purchaser represents
and warrants for itself only to the Sellers and the Company as follows:
(a) Organization and Authority of Purchaser. Purchaser is duly
organized, validly existing and in good standing under the laws of its state
of incorporation or foreign jurisdiction, as applicable, and has valid
corporate authority to execute and deliver this Agreement and to purchase the
Notes to be purchased by it as provided herein.
(b) Authority. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by Purchaser, have received all
necessary governmental or regulatory approval and no further corporate action
by Purchaser is or shall be required for such execution, delivery,
performance or consummation.
(c) No Registration. Purchaser understands that the Notes have not
been and will not be registered under the Securities Act of 1933, as amended
(the "Act"), or any state securities or "Blue Sky" laws, and may be resold
only if registered pursuant to the provisions of the Act and applicable state
securities laws or if an exemption from such registration is available; that
neither the Company nor the Seller is required to register the Notes; and
that any transfer must comply with the agreements and documents that govern
the Notes. Each Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Notes it
purchases hereunder.
(d) Status of Purchaser, Purpose of Purchase. The Purchaser is a
sophisticated institutional investor that is an "accredited investor" within
the meaning of Rule 501 under the Act and has knowledge and experience in
financial and business matters and is capable of evaluating the merits and
risks of its investment in the Notes and is able to bear the economic risk of
such investment. The Purchaser represents that it is not (i) an employee
benefit plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), whether or not it is subject to
the provisions of Title I of ERISA or (ii) a plan described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended. The Purchaser
is acquiring the Notes for its own account, and not with a present view to,
or for sale in connection with any, distribution thereof, provided that the
disposition of the Purchaser's property shall at all times be and remain
within its control.
(e) No Solicitation. The Notes were not offered or sold to Purchaser
by any form of general solicitation or general advertising.
(f) Independent Investigation. Purchaser acknowledges that it has
conducted, to the extent it deemed necessary, an independent investigation of
such matters, and has had the opportunity to receive such information as, in
its judgment, is necessary for it to make an informed investment decision,
and has not relied upon the Seller for any investigation or assessment to
evaluate the transaction contemplated hereby.
(g) Public Information. Certain information that may be pertinent to
the Purchaser's decision to purchase the Notes can be obtained from a variety
of public sources, including the Securities and Exchange Commission. The
Purchaser has obtained and carefully reviewed the Company's most recent
Annual Report on Form 10K and the press releases and other public disclosures
made by the Company since the filing of its annual report.
(h) Reliance. The Seller has not made any representation or warranty,
express or implied, of any kind to the Purchasers, other than as set forth
herein. Seller has no obligation to Purchaser, express or implied, including
without limitation fiduciary obligations, except for the obligations
specifically set forth in this Agreement or in the Escrow Letter.
Purchaser is fully aware that, with regard to the sale of the Notes
it is purchasing hereunder, Seller is relying upon the truth and accuracy of
these representations and warranties.
4. Representations and Warranties of the Company. The Company represents
and warrants to Purchasers as follows:
(a) Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Connecticut and
has valid corporate authority to execute and deliver this Agreement.
(b) Authority. The execution, delivery and performance of this
Agreement, the Note Agreement and the other Operative Agreements and the
consummation of the transactions contemplated hereby and thereby have been
duly and validly authorized and approved by the Company and no further
corporate action by the Company is or shall be required for such execution,
delivery, performance or consummation. This Agreement and the other
Operative Agreements have been duly executed and delivered by the Company and
constitute the legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or similar laws of general application affecting the rights of
creditors and by general equity principles. No governmental or regulatory
approval is necessary for the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby by the
Company.
(c) No Conflict or Restrictions. The Company is not now under any
obligation of a contractual or other nature to any person, firm or
corporation which is inconsistent or in conflict with this Agreement, the
Notes, the Note Agreement or the other Operative Agreements, or which would
prevent, limit or impair in any way its performance of its obligations
hereunder or thereunder.
(d) Title to Property. The Company owns the Office Lease Property free
and clear of all liens, charges and encumbrances, other than as permitted
under the Note Agreement and other Operative Agreements.
(e) Series B Notes. The Company has paid off in full and retired the
Series B Notes. The Series A Notes which are not being purchased and sold
hereunder are being repurchased simultaneously with the consummation of the
transactions contemplated herein.
(f) Defaults; Guaranty. There are no Defaults or Events of Default
under the Notes or the Note Agreement. Since December 31, 1996, there has
been no material adverse change in the financial condition of the Company
other than as disclosed in Northeast Utilities' 1996 Annual Report, Annual
Report on Form 10-K for the year ended December 31, 1996, Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997 and its Current Reports on
Form 8-K filed after January 1, 1997. The Guaranty has been duly authorized,
executed and delivered by, and constitutes a legal, valid and binding
obligation of, the Guarantor enforceable against the Guarantor in accordance
with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
application affecting the rights of creditors and by general equity
principles and is in full force and effect.
(g) Documentation. True and complete copies of the Notes, the
applicable Note Agreement and the other Operative Agreements have been
provided to Purchasers.
(h) No Registration. Based on Purchasers' representations herein, the
sale and purchase of the Notes hereunder is not required to be registered
under the Act or any state securities or "Blue Sky" laws.
5. Sellers' Agreements. Notwithstanding any other provisions of this
Agreement, the undertakings and agreements of CGLIC, LINA, and LIC in this
Agreement constitute agreements and undertakings of each of them individually
and not collectively, and any and all such undertakings and agreements are
for the benefit of the Purchasers only, and are not intended to nor shall
they be construed as conferring any benefit on or creating any rights in
favor of the Company with respect to the Sellers or any of them.
The Sellers have not verified any matters covered by any representations
and warranties of the Company to Purchasers contained in this Agreement, and
Sellers shall in no way be deemed to have agreed with any such
representations and warranties of the Company (except to the extent covered
by specific representations and warranties of Sellers under Section 2 hereof)
to have any duty of due diligence or disclosure to the Purchasers with
respect to those matters covered by the Company's representations and
warranties contained in this Agreement.
Further, in the event that the transactions contemplated hereunder and
by the Escrow Letter are not timely consummated, Sellers have not waived and
each of them specifically reserves any and all rights they and each of them
may have with respect to the Company under the terms of the Note Agreement,
the Operative Agreements, and any other agreements or documents delivered to
them or any of them in connection with the transactions which are covered by
or are the subject of the Note Agreement (collectively, the "Sellers'
Transaction Documents"). Specifically, and without in any way limiting the
generality of the preceding sentence, in the event the transactions
contemplated hereunder and by the Escrow Letter are not timely consummated,
the Sellers have not and shall not be deemed to have consented to or agreed
to the provisions, or to have consented to the deferral of the exercise of
any rights they or any of them may have under any of the Sellers' Transaction
Documents or to any waiver, modification or amendment of or with respect to
any of the Sellers' Transaction Documents, including, without limitation, the
rights of the Sellers under Section 4.2(b) of the Note Agreement.
6. Closing. The closing of the purchase and sale of the Notes as
provided for herein (the "Closing") shall take place on or before July 30,
1997 as contemplated in the Escrow Letter.
The obligations under this Agreement of each party to this Agreement
shall be terminated and shall be of no further force and effect if the
transactions contemplated hereby, including receipt by Sellers of all
payments due to Sellers hereunder in connection with their sale of the Notes,
and receipt by Sellers of all payments due to Sellers in connection with the
separate contemporaneous repurchase by the Company from Sellers of the
remaining outstanding Series A Notes have not occurred on or before July 30,
1997, time being of the essence.
7. Payment of Consideration. At the Closing, (i) each Seller shall
execute and deliver to the Purchaser purchasing the Notes an assignment of
the Notes and Sellers' rights under the related Note Agreement as shall be
appropriate to carry out the intent of this Agreement and sufficient to sell,
assign, transfer and deliver to Purchasers all of Sellers' right, title and
interest in and to the Notes; (ii) Purchasers shall deliver to Sellers the
consideration (to be paid by Purchasers) for the Notes and Sellers' rights
with respect to the Notes under the related Note Agreement as set forth on
Exhibit A hereof by wire transfer of immediately available funds; (iii) the
Company shall pay to each Seller by wire transfer of immediately available
funds the amount (to be paid by the Company) set forth on Exhibit A hereto
with respect to the Notes and (iv) the Company shall deliver to Purchasers at
the addresses for physical delivery therefor set forth on Exhibit A
replacement notes relating to the Notes purchased by Purchasers hereunder and
an opinion of counsel substantially in the form of Exhibit B hereto.
8. Consent Regarding Note Agreement. The Purchasers hereby consent
that so long as they shall hold the Notes, they will only seek to enforce the
below-referenced provisions of the Note Agreement as if such provisions
provide as follows:
(a) Section 3.1: The definition of "Major Subsidiary" shall
exclude Public Service Company of New Hampshire and North Atlantic Energy
Corporation for all completed fiscal years of NU ending on or before December
31, 1998. Furthermore, the term "Major Subsidiary" shall be limited to
Western Massachusetts Electric Company, a Massachusetts corporation; The
Connecticut Light and Power Company, a Connecticut corporation; Public
Service Company of New Hampshire, a New Hampshire corporation; and North
Atlantic Energy Corporation, a New Hampshire corporation, so long as each of
these Subsidiaries from time to time either holds more than ten percent (10%)
of the consolidated assets of Guarantor and its Subsidiaries (as defined in
Section 3.1 of the Note Agreement), or accounts for more than ten percent
(10%) of the consolidated earnings of Guarantor and its Subsidiaries, both
tests measured as of the end of the most recently completed fiscal year of
Guarantor.
(b) Sections 4.2(b) and 11.1(h): The term "Investment Grade" is
replaced in each place where it appears in Section 4.2 (b) of the Note
Agreement with the term "Minimum Grade", which for those purposes and for
purposes of Section 11.1(h) of the Note Agreement is defined as "a rating by
Moody's Investor Services, Inc. (or any successor) of what is currently
referred to as "B1" or higher, or by Standard & Poor's Corporation (or any
successor) of what is currently known as "B+" or higher, respectively. In
addition, the notification required by Section 11.1(h) of the Note Agreement
shall apply only to becoming aware that Moody's Investors Services, Inc. or
Standard & Poor's Corporation (or any successor to either such entity if
either or both do not then exist) has placed the senior debt of any Major
Subsidiary on a so-called "watch list" prior to a possible downgrading to a
rating lower than Minimum Grade.
(c) Transfer. Each Purchaser agrees that, without the prior
written consent of the Company, it will not sell, assign, transfer or deliver
any Note unless it shall arrange to make the provisions of this Section 8
survive any subsequent transfer of the Note.
9. Purchasers' Covenant. Each Purchaser hereby covenants, promises
and agrees (a) to perform each and all of the covenants, agreements and
obligations under the Note Agreement and the Operative Agreements to be
performed by the Sellers thereunder on or after the date hereof, at the time,
in the manner and in all respects as provided in such documentation, and (b)
to be bound by each and all of the terms and provisions of the Note Agreement
and the Operative Agreements as though such documentation had originally been
made, executed and delivered by such Purchaser on the date hereof, as such
terms and provisions have been amended by this Agreement as to Purchasers.
10. Miscellaneous
(a) Modification. The rights and duties hereunder may not be
modified, revised or terminated except by a writing signed by all parties
hereto or their duly authorized representatives.
(b) Expenses of Parties; Brokers. Except as otherwise
specifically provided for herein, each party hereto shall bear all expenses
incurred by it in connection with this Agreement including, without
limitation, the charges of its counsel and other experts or brokers. Each
party hereto further represents and warrants that no agent, broker,
investment banker, person or firm acting on its behalf is or will be entitled
to any broker's or finder's fee or any other commission or similar fee
directly or indirectly from any of the parties hereto in connection with any
of the transactions contemplated herein, except for the fee of Donaldson
Lufkin & Jenrette Securities Corporation, which the Company agrees to pay.
(c) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same agreement of the parties
hereto.
(d) Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the day and year first above written.
CONNECTICUT GENERAL LIFE WESTERN NATIONAL LIFE INSURANCE
INSURANCE COMPANY COMPANY
By CIGNA Investments, Inc. By CONSECO Capital Management, Inc.,
acting as Investment Advisor
s/s Lawrence A. Drake s/s Gary F. Greaur
By Lawrence A. Drake By Gary F. Greaur
Its Managing Director Its Assistant Vice President
LIFE INSURANCE COMPANY ML CBO VII, Series 1997-C-3
OF NORTH AMERICA By CONSECO Capital Management, Inc.,
By CIGNA Investments, Inc. acting as Investment Advisor
s/s Lawrence A. Drake s/s Gary F. Greaur
By Lawrence A. Drake By Gary F. Greaur
Its Managing Director Its Assistant Vice President
LIFE INSURANCE COMPANY THE ROCKY RIVER REALTY COMPANY
OF GEORGIA
By ING Investment Management, Inc.
its Agent
s/s Fred C. Smith s/s David R. McHale
By Fred C. Smith By David R. McHale
Its SVP and Managing Its Assistant Treasurer
Director