Exhibit 10.31.5
PURCHASE AND SALE AGREEMENT
AGREEMENT ("Agreement") entered into this 26th day of September, 1997 by
and between ROYALTON COMPANY, a Cayman Islands entity having its principal
place of business in George Town, Grand Cayman (the "Purchaser"), and THE
ROCKY RIVER REALTY COMPANY, a Connecticut corporation having its principal
place of business in Berlin, Connecticut (the "Company" or the "Seller").
Pursuant to Note Agreements each dated April 14, 1992 between the Company and
certain others (collectively, the "Original Note Agreement") and certain
other Operative Agreements, as defined in the Original Note Agreement, the
Company issued $15,000,000 aggregate principal amount of 8.81% Guaranteed
Senior Secured Notes, Series A, due April 14, 2007 (the "Series A Notes").
As contemplated by and provided for in the Original Note Agreement, certain
of the Series A Notes have been assigned and transferred by the original
holders thereof to subsequent purchasers and holders thereof and the
remaining outstanding Series A Notes have been repurchased by the Company to
be reissued to the Purchaser under the terms of the Amendment to Note
Agreement dated as of September 26, 1997 (together with the Original Note
Agreements, the "Note Agreement") and as further provided herein, which
reissued note in the aggregate principal amount of $5,828,180.14 (the "Note")
is to be of the same series and tenor as the Series A Notes repurchased by
the Company. Purchaser desires to purchase the Note from Seller, as set
forth more fully below and in Exhibit A hereto. Capitalized terms used
herein which are defined in the Note Agreement 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 Note. Upon the terms set forth in this Agreement,
Seller will sell, assign, transfer and deliver to Purchaser, and Purchaser
will purchase from Seller, at the Closing (as defined in Section 4), the Note
for the amount to be paid to the Company set forth on Exhibit A hereof.
2. Representations and Warranties of Purchaser. Purchaser represents and
warrants as follows:
(a) Organization and Authority of Purchaser. Purchaser is duly
organized, validly existing and in good standing under the laws of its
foreign jurisdiction and has valid corporate authority to execute and deliver
this Agreement and to purchase the Note.
(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 Note has 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
the Company is not required to register the Note; and that any transfer must
comply with the agreements and documents that govern the Note. The Purchaser
will comply with all applicable federal and state securities laws in
connection with any subsequent resale of the Note 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 Note 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 Note 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 Note was 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 Note 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) Principal Amount. The Note is in the outstanding principal amount
of $5,828,180.14, no part of which has been terminated, paid or otherwise
reduced.
3. Representations and Warranties of the Company. The Company represents
and warrants to Purchaser 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, the Note
Agreement and the Modification and Confirmation of Assignment of Leases,
Rents and Profits, Security Agreement and Negative Pledge (the
"Modification").
(b) Authority. The execution, delivery and performance of this
Agreement, the Note Agreement and the other Operative Agreements, including
the Note, 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.
(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 Reports
on Form 10-Q for the quarters ended March 31, 1997 and June 30, 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.
4. Closing. The closing of the purchase and sale of the Notes as
provided for herein (the "Closing") shall take place on or before September
26, 1997, or at such other time as mutually agreed to by the parties hereto.
5. Payment of Consideration. At the Closing, (i) Purchaser shall
deliver to the Company the consideration for the Note as set forth on Exhibit
A hereof by wire transfer of immediately available funds and (ii) the
Company shall deliver to Purchaser at the address for physical delivery
therefor set forth on Exhibit A the Note purchased by Purchaser hereunder and
an opinion of counsel substantially in the form of Exhibit B hereto.
6. Consent Regarding Note Agreement. The Purchaser hereby consents
that so long as it shall hold the Note, it 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. Purchaser agrees that, without the prior written
consent of the Company, it will not sell, assign, transfer or deliver the
Note, or any portion thereof, unless it shall arrange to make the provisions
of this Section 6 survive any subsequent transfer of the Note.
7. Purchaser's Covenant. 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 original purchasers 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 Purchaser.
8. Conditions to Closing. The parties hereto acknowledge that
simultaneously with the consummation of the transactions contemplated herein,
and as conditions to Closing, (i) the Company, Northeast Utilities Service
Company and the Trustee are separately entering into the Modification to be
dated the date hereof; (ii) the Company, the Purchaser and the holders of the
Series A Notes not being purchased and sold hereunder are entering into the
Amendment to be dated the date hereof; and (iii) Northeast Utilities is
executing an Extension of Note Guaranty to be dated the date hereof.
9. 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.
ROYALTON COMPANY
By Pacific Investment
Management Company, as
its Investment Advisor
By s/s Raymond Kennedy
Raymond Kennedy
Vice President
THE ROCKY RIVER REALTY COMPANY
By s/s David R. McHale
David R. McHale
Assistant Treasurer