Exhibit 10.1
EXECUTION COPY
$82,000,000
New York State Energy Research and Development Authority
4.70% Gas Facilities Revenue Bonds
(The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project)
2005 Series A
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BOND PURCHASE AGREEMENT
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October 26, 2005
New York State Energy Research and Development Authority
17 Columbia Circle
Albany, New York 12203-6399
The Brooklyn Union Gas Company
d/b/a KeySpan Energy Delivery New York
One MetroTech Center
Brooklyn, New York 11201-3851
Ladies and Gentlemen:
Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc., Sovereign
Securities Corporation, LLC and The Williams Capital Group, L.P. (each, an
"Underwriter" and collectively, the "Underwriters") offer to enter into the
following agreement with New York State Energy Research and Development
Authority (the "Authority") and The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York (the "Company"), which, upon acceptance of this Bond
Purchase Agreement (the "Bond Purchase Agreement") by the Authority and by the
Company, will be binding upon the Authority, the Company and the Underwriters.
This offer is made subject to acceptance of this Bond Purchase Agreement by the
Authority and the Company on or before 4:00 P.M. New York time on the date
hereof, and if not so accepted, will be subject to withdrawal by the
Underwriters upon notice delivered to your offices, at any time prior to the
acceptance hereof by the Authority and the Company. Terms used in the Bond
Purchase Agreement but not defined herein shall have the meanings assigned to
them in the Indenture (as hereinafter defined).
1. Background
Per the request of the Company, the Authority has agreed to issue
$82,000,000 aggregate principal amount of 4.70% Gas Facilities Revenue Bonds
(The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project),
2005 Series A (the "Bonds"), for the purpose of refunding the Authority's
Adjustable Rate Gas Facilities Revenue Bonds, Series 1989A (The Brooklyn Union
Gas Company Project) and Adjustable Rate Gas Facilities Revenue Bonds, Series
1989B (The Brooklyn Union Gas Company Project) in the aggregate principal amount
of $82,000,000 (collectively, the "Prior Bonds"). The Prior Bonds were
previously issued to provide all or part of the funds for the acquisition,
construction, and installation (or any combination thereof) of certain
facilities for the local furnishing of gas.
The Bonds shall be issued under and secured by an indenture of trust dated
as of November 1, 2005 (the "Indenture") between the Authority and Citibank,
N.A., as trustee (the "Trustee"), and pursuant to a bond resolution of the
Authority, Resolution No. 1093 adopted September 19, 2005 (the "Resolution"). In
connection with the issuance of the Bonds, the Authority and the Company will
enter into a participation agreement related to the Bonds dated as of November
1, 2005 (the "Participation Agreement") pursuant to which the Company proposes
to issue a promissory note, substantially in the form attached to the
Participation Agreement, to evidence the obligation of the Company to the
Authority to repay the advance of the proceeds of the Bonds (the "Company
Note"). On the Closing Date (as defined in Section 7 hereof), the Company will
also execute a Rule 15c2-12(b)(5) continuing disclosure certificate, dated the
Closing Date relating to the Bonds (the "Company's Disclosure Certificate"). On
and after the Closing Date, the payment of the regularly scheduled principal of,
and interest on, the Bonds will be insured by a municipal bond new issue
insurance policy (the "Support Facility" or the "Insurance Policy") issued by
Financial Guaranty Insurance Company (the "Insurer").
The Bonds will be limited obligations of the Authority payable solely out
of revenues or other receipts, funds or moneys pledged therefor under the
Indenture or from the proceeds of the Support Facility.
2. Purchase and Sale of Bonds. Subject to the terms and conditions of this
Bond Purchase Agreement, on the Closing Date, the Underwriters will purchase
$82,000,000 principal amount of the Bonds from the Company at a price of 100% of
the principal amount thereof. The Underwriters will be paid a fee in an amount
equal to 0.50% of the principal amount of the Bonds, plus certain out of pocket
expenses of the Underwriters, by the Company on the Closing Date.
The Underwriters will take up and pay for all of the Bonds to be purchased
by it if any are taken. The Underwriters will initially reoffer the Bonds
purchased by them to the public at a price of 100% of the par amount thereof.
The purchase will be made by the delivery of immediately available funds through
the facilities of The Depository Trust Company in New York, New York.
3. Official Statement and Compliance with Rule 15c2-12. The Authority and
the Company have made available to the Underwriters an official statement dated
the date hereof, executed on behalf of the Authority as indicated thereon,
including (i) an appendix consisting of financial and other information in
respect of the Company (the "Company Appendix"), (ii) an appendix consisting of
the form of approving opinion of Hawkins Delafield & Wood LLP, Bond Counsel to
the Authority to be delivered upon the issuance of the Bonds (the "Opinion
Appendix"), (iii) an appendix consisting of a copy of a form of the Insurance
Policy of the Insurer (the "Policy Appendix") and (iv) an appendix consisting of
a form of the Company's Disclosure Certificate (the "Disclosure Certificate
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Appendix" and, together with the Company Appendix, the Opinion Appendix and the
Policy Appendix, the "Appendices"). Such Official Statement, together with the
Appendices, and any supplements and amendments to such Official Statement or the
Company Appendix, is hereinafter called the "Official Statement." The Authority
and the Company consent to such use by the Underwriters prior to the date hereof
of a preliminary official statement dated October 19, 2005, including the
appendices thereto (the "Preliminary Official Statement").
For a period of time extending to the end of the underwriting period for
the Bonds, the Company will make available to the Underwriters such number of
copies of the Official Statement as the Underwriters shall reasonably request.
The "end of the underwriting period" shall have the meaning given to such term
in paragraph (f)(2) of Rule 15c2-12 promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Underwriters will promptly advise the
Authority and the Company of the date they believe the underwriting period for
the Bonds has ended (which in the absence of such advice shall be deemed to be
the Closing Date), and until and unless it shall be determined by the
Underwriters that the underwriting period has ended on a different date, such
date shall be deemed the end of the underwriting period for purposes of this
Bond Purchase Agreement.
The Authority hereby represents and warrants to the Underwriters that the
information contained in the Preliminary Official Statement as of the date of
the Preliminary Official Statement, and in the Official Statement as of the date
the Official Statement is delivered to the Underwriters, is complete, within the
meaning of paragraph (f)(3) of Rule 15c2-12, except for the following
information:
(i) under the heading "THE BONDS--Securities Depository" concerning The
Depository Trust Company ("DTC") and its book-entry system ("DTC
Information");
(ii) under the headings "THE PROJECT" and "CONTINUING DISCLOSURE
UNDERTAKING";
(iii) in the Company Appendix ("Company Information");
(iv) under the heading "UNDERWRITING" in the first sentence of the first
paragraph and the last sentence of the second paragraph ("Underwriters
Information")
(v) in the Policy Appendix and under the headings "THE INSURANCE
AGREEMENT" and "THE INSURANCE POLICY" ("Insurer Information").
The Company hereby represents and warrants to the Underwriters that the
information contained in the Preliminary Official Statement as of the date of
the Preliminary Official Statement, and in the Official Statement as of the date
the Official Statement is delivered to the Underwriters, other than the
Authority Information (as defined in Section 5(l) hereof), the DTC Information,
the Underwriters Information, the Insurer Information, and the Opinion Appendix,
is complete, within the meaning of paragraph (f)(3)of Rule 15c2-12.
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The Authority and the Company confirm that, as of the date of the
Preliminary Official Statement, and as of the date of the Official Statement,
the Authority deemed the information in the Preliminary Official Statement and
the Official Statement, other than the information referenced in subparagraphs
(i) through (vi) above, and the Company deemed the information in the
Preliminary Official Statement and the Official Statement, other than the
Authority Information, the DTC Information and the Insurer Information, to have
been final for purposes of paragraph (b)(1) of Rule 15c2-12 as of the date
delivered to the Underwriters (except for the omission of that information
permitted to be omitted by Rule 15c2-12).
The Underwriters agree to file the Official Statement and any amendments or
supplements thereto before the end of the underwriting period with each of the
"nationally recognized municipal securities information repositories" within the
meaning of Rule 15c2-12.
The Underwriters acknowledge that no financial statements or operating data
concerning the Authority are to be included in the Official Statement, and that
no undertaking to provide such information in the future will be required.
The Authority and the Company hereby authorize the Indenture, the
Participation Agreement and the Official Statement and the information contained
therein to be used by the Underwriters, and ratify the use by the Underwriters
prior to the date hereof of the Preliminary Official Statement in connection
with the offering and sale of the Bonds.
4. Sale of all the Bonds; Offering. The Underwriters agree to make an
offering of all of the Bonds at a price not in excess of the initial offering
price, as set forth on the cover page of the Official Statement. Simultaneously
with or before delivery of the Bonds, the Underwriters shall furnish to the
Authority a certificate acceptable to Bond Counsel to the effect that (1) the
Underwriters have made a bona fide public offering of the Bonds to the public at
an initial offering price not greater than the price shown on the cover of the
Official Statement and (2) ten percent (10%) or more of the final amount of the
Bonds was sold to the final purchasers thereof (not including bond houses and
brokers or similar persons or organizations acting in the capacity of
Underwriters or wholesalers) at a price not greater than such initial offering
price.
5. Representations, Warranties, Covenants and Agreements of the Authority.
The Authority, by its acceptance hereof, represents, warrants, covenants and
agrees with the Underwriters and the Company as follows:
(a) The Authority is a body corporate and politic, duly established and
existing under the constitution and laws of the State of New York as a
public benefit corporation, and is authorized by the provisions of the New
York State Energy Research and Development Authority Act, Title 9 of
Article 8 of the Public Authorities Law of the State of New York, as
amended (the "Act"), (i) to offer, issue, sell and deliver the Bonds for
the purposes specified in the Indenture, (ii) to secure the payment of the
Bonds by causing the Company to deliver the Company Note to the Trustee and
by pledging and assigning to the Trustee certain of the rights of the
Authority under the Participation Agreement, the Company Note, the Revenues
(as defined in the Indenture) and the Tax Regulatory Agreement and (iii)
subject to the granting or waiver of the Approvals, to enter into and
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perform its obligations under this Bond Purchase Agreement, the Bonds, the
Participation Agreement, the Indenture, the Tax Regulatory Agreement and
any other instrument or agreement to which the Authority is a party and
which has been executed in connection with the transactions contemplated by
the foregoing documents in order to accomplish the foregoing actions.
(b) Subject to the granting or waiver of such approvals by the Governor of the
State of New York, the Comptroller of the State of New York, the
Commissioner of Taxation and Finance of the State of New York and the New
York State Public Authorities Control Board (the "Approvals") as are
required by law, including the Act, and as have not been granted or waived
on the date hereof, the Authority has full power and authority to execute
and deliver, to take all actions required or permitted to be taken by the
Authority by or under, and to perform and observe the covenants and
agreements on its part contained in, this Bond Purchase Agreement, the
Bonds, the Participation Agreement, the Indenture, the Tax Regulatory
Agreement and any other instrument or agreement relating thereto to which
the Authority is a party, and the Authority has complied with all
provisions of applicable law, including the Act, in all matters related to
such actions. The Authority will use its best efforts to secure the
Approvals.
(c) The Authority has, on or before the date hereof, duly taken all action
necessary to be taken by it or on its behalf prior to such date for: (i)
the offering, sale and delivery of the Bonds upon the terms and conditions
and for the purposes described herein and in the Official Statement, (ii)
the adoption of the Resolution, (iii) the execution and delivery by it of
the Indenture (including the pledge by the Authority of the amounts payable
by the Company under the Participation Agreement and its interest in the
Company Note), (iv) the execution, delivery and performance of this Bond
Purchase Agreement, the Participation Agreement, the Indenture, the Tax
Regulatory Agreement and any other instrument or agreement to which the
Authority is a party and which has been or will be executed in connection
with the transactions contemplated by the foregoing documents and the
Official Statement, (v) the approval, execution, delivery and distribution
of the Official Statement, and (vi) the carrying out, giving effect to,
consummation and performance of the transactions and obligations
contemplated hereby and by the Official Statement; provided that no
representation is made with respect to compliance with the securities or
"Blue Sky" laws of the various states of the United States. Executed
counterparts of the Indenture, the Participation Agreement and the Tax
Regulatory Agreement and three signed copies of the Official Statement will
be delivered to the Underwriters by the Authority on the Closing Date.
(d) This Bond Purchase Agreement has been duly executed and delivered by the
Authority. The Resolution has been duly adopted by the Authority and is in
full force and effect, and this Bond Purchase Agreement, the Participation
Agreement, the Indenture, the Tax Regulatory Agreement and any other
instrument or agreement to which the Authority is a party and which has
been or will be executed in connection with the consummation of the
transactions contemplated by the foregoing documents, when duly executed
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and delivered by the parties thereto, will constitute valid and binding
obligations of the Authority enforceable against the Authority in
accordance with their respective terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the enforcement of creditors' rights or
contractual obligations generally or by principles of equity or judicial
discretion.
(e) Subject to the granting or waiver of the Approvals, the execution and
delivery of the Official Statement, and the execution, delivery and
performance by the Authority of this Bond Purchase Agreement, the
Participation Agreement, the Bonds, the Indenture, the Tax Regulatory
Agreement and any other instrument or agreement to which the Authority is a
party and which has been or will be executed in connection with the
consummation of the transactions contemplated by the foregoing documents,
the compliance with the terms, conditions or provisions hereof and thereof,
and the consummation of the transactions herein and therein contemplated do
not and will not conflict with or constitute a breach of or a default under
or result in a violation of (i) the Act, (ii) any agreement or other
instrument to which the Authority is a party or by which the Authority or
any of its properties is bound, or (iii) any constitutional or statutory
provision or order, rule, regulation, decree or ordinance of any court,
government or governmental authority having jurisdiction over the Authority
or any of its properties.
(f) On and as of the Closing Date, all authorizations, consents and approvals
of, notices to, registrations or filings with, or actions in respect of any
governmental body, agency or other instrumentality or court required to be
obtained, given or taken on behalf of the Authority in connection with the
execution, delivery and performance by the Authority of this Bond Purchase
Agreement, the Bonds, the Participation Agreement, the Indenture, the Tax
Regulatory Agreement and any other agreement or instrument to which the
Authority is a party and which has been or will be executed in connection
with consummation of the transactions contemplated by the foregoing
documents, including, without limitation, the granting or waiver of the
Approvals, will have been obtained, given or taken and will be in full
force and effect, provided that no representation is made with respect to
compliance with the securities or "Blue Sky" laws of the various states of
the United States.
(g) There is no action, suit, proceeding, inquiry or investigation before or by
any court, public board or body pending or, to the best knowledge of the
Authority, threatened against or affecting the Authority wherein an
unfavorable decision, ruling or finding would adversely affect (i) the
validity or enforceability of, or the authority or ability of the Authority
to perform its obligations under, this Bond Purchase Agreement, the Bonds,
the Participation Agreement, the Indenture, the Tax Regulatory Agreement or
any other agreement or instrument to which the Authority is a party and
which has been or will be executed in connection with the consummation by
the Authority of the transactions contemplated by the foregoing documents
or (ii) the exclusion from gross income for Federal income tax purposes of
interest on the Bonds afforded by Section 103 of the Internal Revenue Code
of 1986, as amended.
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(h) On the Closing Date the Bonds will be duly authorized, executed, issued and
delivered and constitute valid and binding limited obligations of the
Authority enforceable in accordance with their terms and the terms of the
Resolution and the Indenture and entitled to the benefits and security of
the Indenture, the Participation Agreement, the Tax Regulatory Agreement,
the Company Note and the Act, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting the enforcement of creditors' rights or
contractual obligations generally or by principles of equity or judicial
discretion.
(i) On and as of the Closing Date, the Bonds will be secured by a lien and a
pledge of (1) the Revenues; (2) the Participation Agreement and the Company
Note and all rights, remedies and interest of the Authority under the
Participation Agreement and the Company Note and any other agreement
relating to the Project (except the rights and interests of the Authority
with respect to (a) administrative compensation, attorney's fees and
indemnification, (b) the receipt of notices, opinions, reports, copies of
instruments and other items of a similar nature required to be delivered to
the Authority under the Participation Agreement, (c) granting approvals and
consents and making determinations when required under the Participation
Agreement, (d) making requests for information and inspections in
accordance with the Participation Agreement, (e) Sections 4.03, 4.08 and
4.09 of the Participation Agreement and, insofar as the obligations of the
Company under Section 4.07 relate to taxes and assessments imposed upon the
Authority and not the Trustee, Section 4.12 thereof and (f) the right to
amend the Participation Agreement); (3) the Tax Regulatory Agreement and
all rights, remedies and interest of the Authority thereunder (subject to
the reservation by the Authority of the right to enforce the obligations of
the Company thereunder independently of the Trustee and subject to the
provisions of the Tax Regulatory Agreement relating to the amendment
thereof); (4) all other monies, rights and properties held by the Trustee
or other depositary under the Indenture including, but only for the benefit
of the persons specified in the Indenture, the proceeds of any draw,
borrowing or payment under any Support Facility (other than the Insurance
Policy) and the securities (and the interest, income and profits therefrom)
in which such monies may from time to time be invested (exclusive of the
proceeds of a Support Facility or the Rebate Fund); and (5) any and all
other real or personal property of every nature from time to time by
delivery or by writing of any kind specially mortgaged, pledged or
hypothecated, as and for additional security under the Indenture, by the
Company in favor of the Trustee or the Authority.
(j) The Authority will cooperate with the Underwriters and their counsel in the
qualification of the Bonds for offering and sale and the determination of
the eligibility of the Bonds for investment under the laws of such
jurisdictions as the Underwriters shall designate and to continue any such
qualification in effect so long as required for the distribution of the
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Bonds by the Underwriters, provided that the Authority shall not be
required to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject. It is
understood that the Authority is not responsible for compliance with or the
consequences of the failure to comply with the securities or "Blue Sky"
laws of the various states of the United States.
(k) The Authority is not in default in the payment of principal of, premium, if
any, or interest on any bonds or notes and, other than the Indenture, the
Authority has not entered into any contract or arrangement of any kind
which might give rise to any lien or encumbrance on the assets, funds and
interests pledged pursuant to, or subject to the lien of, the Indenture.
(l) The information contained under the heading "THE AUTHORITY" ("Authority
Information") in the Preliminary Official Statement as of its date was, and
in the Official Statement is, and as of the Closing Date will be, true and
correct and does not and will not contain any untrue or incorrect
statement, or misleading statement, of a material fact and does not and
will not omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
(m) Any certificate authorized by resolution of the Authority, signed by any
authorized official or officials of the Authority and delivered to the
Underwriters or the Company, shall be deemed a representation by the
Authority to the Underwriters or the Company, as the case may be, as to the
statements made therein.
(n) The Authority will take or cause to be taken such other action as may
reasonably be required on its part to consummate the transactions
contemplated by this Bond Purchase Agreement, the Bonds, the Indenture, the
Tax Regulatory Agreement, and the Participation Agreement.
(o) Until the end of the underwriting period, the Authority will advise the
Company and the Underwriters promptly (i) of the institution of any legal
or regulatory proceedings affecting the Authority of which the Authority
has knowledge affecting the use of the Official Statement in connection
with the offer and sale of the Bonds and (ii) if the Authority believes
that the Authority Information is not true or correct, contains any untrue
or incorrect statement or misleading statement of a material fact or omits
to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
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6. Representations, Warranties, Covenants and Agreements of the Company.
The Company, by its acceptance hereof, represents, warrants, covenants and
agrees with the Underwriters and the Authority as follows:
(a) The Company has been duly incorporated and is in good standing under the
laws of the State of New York, is qualified to do business in the State of
New York and in every other jurisdiction where the nature of its business
requires it to be so qualified, is not required to be qualified to do
business in any other jurisdiction, has corporate power and authority to
own its properties and to conduct its business and, except as described in
the Preliminary Official Statement and the Official Statement, possesses
all material licenses and approvals necessary for the conduct of its
business as described in the Preliminary Official Statement and the
Official Statement;
(b) The Company has corporate power and authority to execute and deliver, to
take all actions required or permitted to be taken by the Company by or
under, and to perform its obligations and observe the covenants and
agreements on its part contained in, and to engage in the transactions
contemplated on its part by, this Bond Purchase Agreement, the Company's
Disclosure Certificate, the Participation Agreement, the Insurance
Agreement, the Company Note and the Tax Regulatory Agreement;
(c) The Company has, on or before the date hereof, duly taken all action
necessary to be taken by it prior to such date for the authorization of:
(i) the execution, delivery and performance by the Company of this Bond
Purchase Agreement, the Participation Agreement, the Company Note, the Tax
Regulatory Agreement, the Insurance Agreement and the Company's Disclosure
Certificate and (ii) the carrying out, giving effect to, consummation and
performance by the Company of the transactions and obligations contemplated
hereby, thereby and by the Preliminary Official Statement and the Official
Statement; provided, that no representation is made with respect to
compliance with the securities or "Blue Sky" laws of the various states of
the United States;
(d) This Bond Purchase Agreement has been duly executed and delivered by the
Company. This Bond Purchase Agreement, the Participation Agreement, the
Company Note, the Tax Regulatory Agreement, the Insurance Agreement and the
Company's Disclosure Certificate when duly executed and delivered by the
parties thereto, will constitute legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their
respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting the enforcement of creditors' rights or contractual
obligations generally or by principles of equity or judicial discretion and
except as rights of indemnification or contribution under this Bond
Purchase Agreement may be limited by applicable securities laws or
principles of public policy and except as indemnification provisions of
this Bond Purchase Agreement purport to indemnify the Authority or the
Underwriters against their own gross negligence or willful misconduct;
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(e) The execution and delivery by the Company of this Bond Purchase Agreement,
the Participation Agreement, the Company Note, the Tax Regulatory
Agreement, the Insurance Agreement and the Company's Disclosure
Certificate, the compliance by the Company with the terms, conditions or
provisions hereof and thereof, and the consummation by the Company of the
transactions contemplated herein and therein do not and will not violate
any existing law or any material regulation, rule, order, writ, injunction
or decree of any court, Federal or state regulatory body, administrative
agency or other governmental body applicable to the Company, or contravene
the Certificate of Incorporation or by-laws of the Company, or result in a
breach of any of the terms, conditions or provisions of, or constitute a
default under, any material mortgage, indenture, agreement or instrument to
which the Company is a party or by which it or any of its properties is
bound or result in the creation or imposition of any mortgage, lien, charge
or other security interest or encumbrance of any nature whatsoever upon any
of the properties or assets of the Company other than any liens, charges,
security interests or encumbrances created, permitted or contemplated by
the Participation Agreement or the Company Note;
(f) On and as of the Closing Date, all authorizations, consents and approvals
of, notices to, registrations or filings with, or actions in respect of,
any governmental body, agency, regulatory authority or other
instrumentality or court required to be obtained, given or taken on behalf
of the Company in connection with the offering and sale of the Bonds, the
procurement of the Insurance Policy and the execution, delivery and
performance by the Company of this Bond Purchase Agreement, the
Participation Agreement, the Company Note, the Tax Regulatory Agreement,
the Insurance Agreement and the Company's Disclosure Certificate,
including, without limitation, orders of the Public Service Commission of
the State of New York with respect to the issuance of the Company Note and
the execution and delivery by the Company of the Participation Agreement,
will have been obtained, given or taken and will be in full force and
effect, provided that no representation is made with respect to compliance
with the securities or "Blue Sky" laws of the various states of the United
States;
(g) Except as stated in the Official Statement, there is no action, suit,
proceeding, inquiry or investigation at law or in equity or before or by
any court, public board or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, or to the best
knowledge of the Company, any basis therefor, wherein an unfavorable
decision, ruling or finding would have a material adverse effect on the
properties, business, condition (financial or other) or results of
operations of the Company or the transactions contemplated by this Bond
Purchase Agreement or by the Participation Agreement, the Company Note, the
Indenture, the Tax Regulatory Agreement, the Insurance Policy, the
Insurance Agreement or the Company's Disclosure Certificate, or which would
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adversely affect the validity or enforceability of the Bonds or the
Indenture, or the authority or ability of the Company to perform its
obligations under, this Bond Purchase Agreement, the Participation
Agreement, the Company Note, the Tax Regulatory Agreement, the Insurance
Agreement or the Company's Disclosure Certificate;
(h) The Company is not in default under any indenture or other agreement or
instrument governing outstanding indebtedness issued by the Company, nor
has any event occurred and is continuing which with notice or the passage
of time or both would constitute a default under any such document, and the
Company is in compliance with all prior undertakings pursuant to Rule
15c2-12(b)(5);
(i) The financial statements included as part of the Company Appendix present
fairly the financial position, results of operation and cash flows of the
Company at the respective dates and for the respective periods indicated,
all in conformity with generally accepted accounting principles applied
(except as otherwise noted) on a consistent basis throughout the periods
involved. The Company has no material contingent obligation which is not
disclosed in the Company Appendix;
(j) The Bonds, the Indenture, the Participation Agreement, the Company Note,
the Project, the Tax Regulatory Agreement, the Insurance Policy, the
Insurance Agreement and the Company's Disclosure Certificate conform in all
material respects to the descriptions thereof or statements in respect
thereof in the Official Statement;
(k) Except as reflected in or contemplated by the Official Statement,
subsequent to the dates as of which information is given in the Official
Statement and prior to the date hereof there has been no material adverse
change or a prospective adverse change in the properties, business,
condition (financial or other) or results of operations of the Company,
whether or not arising from transactions in the ordinary course of
business;
(l) The Company will not take or omit to take any action which action or
omission (i) would in any way cause the proceeds from the sale of the Bonds
to be applied in a manner contrary to that provided for in the Indenture,
the Participation Agreement and the Tax Regulatory Agreement or (ii) would
result in a breach of the covenants contained in Section 5.04 of the
Participation Agreement;
(m) The Company will cooperate with the Underwriters and their counsel in the
arrangements for the qualification of the Bonds for offering and sale and
the determination of the eligibility of the Bonds for investment under the
laws of such jurisdictions as the Underwriters shall designate and will
cooperate in the continuation of any such qualifications in effect so long
as required for the distribution of the Bonds by the Underwriters, provided
that the Company shall not be required to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which
would subject it to general service of process in any jurisdiction where it
is not now so subject. It is understood that the Company is not responsible
for compliance with or the consequences of failure to comply with the
securities or "Blue Sky" laws of the various states of the United States;
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(n) The descriptions and information contained in the Preliminary Official
Statement as of its date was, and in the Official Statement is, and as of
the Closing Date will be, true and correct and does not, and as of the
Closing Date will not, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading, provided that no representation is made with respect to the
Authority Information, the DTC Information, the Underwriters Information,
the Insurer Information or the Opinion Appendix, or any statements in or
omissions from the Preliminary Official Statement or the Official Statement
under the heading "TAX MATTERS." Until the end of the underwriting period,
the Company will advise the Authority and the Underwriters promptly if the
Company believes that the information contained in the Official Statement
contains any untrue or incorrect statement or misleading statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. If at any time from the date hereof until 90 days
following the end of the underwriting period, when, in the opinion of the
Underwriters, the Official Statement should be delivered in connection with
the sale of the Bonds, any event occurs as a result of which, if the event
relates to the Company, in the opinion of counsel to the Company, the
Official Statement (except for the Authority Information, the DTC
Information, the Underwriters Information, the Insurer Information, the
Opinion Appendix or any statements in or omissions from the Official
Statement under the heading "TAX MATTERS", as to which the Company makes no
representation or warranty) as then amended or supplemented would include
an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Company will cooperate with
the Underwriters in preparing an amendment or supplement which will correct
such statement or omission;
(o) The Company will furnish or cause to be furnished to the Underwriters
copies of the Indenture, the Participation Agreement, the Tax Regulatory
Agreement, the Insurance Agreement, the Company's Disclosure Certificate
and the Official Statement and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Underwriters may reasonably request;
(p) The Company will not amend or supplement the Official Statement without the
consent of the Underwriters and the Authority;
(q) The Company will advise the Authority and the Underwriters promptly of the
institution of any legal or regulatory proceedings of which the Company has
knowledge affecting the use of the Official Statement in connection with
the offer and sale of the Bonds;
12
(r) Any certificate authorized by resolution of the Company, signed by any
authorized officer or officers of the Company and delivered to the
Authority or the Underwriters, shall be deemed a representation by the
Company to the Authority or the Underwriters, as the case may be, as to the
statements made therein;
(s) The Insurance Policy will be in full force and effect on the Closing Date;
and
(t) The Company will undertake, pursuant to the Company's Disclosure
Certificate to provide certain annual financial information and notices of
the occurrence of certain events, if material. A form of the Company's
Disclosure Certificate is set forth in the Disclosure Certificate Appendix
to the Official Statement.
7. Closing. At 10:00 A.M., New York time, on November 1, 2005, or on such
other date as shall be agreed upon in writing by the Authority, the Company and
the Underwriters (the "Closing Date"), the Company will instruct DTC to credit
the Bonds to the account of, or as otherwise instructed by, the Underwriters and
upon receipt of the other documents hereinafter mentioned, the Underwriters will
accept such delivery and pay the purchase price of the Bonds as set forth in
Section 2 hereof, by wire transfer of immediately available funds to the
Trustee. Acceptance of each delivery and payment as aforesaid shall be made at
the office of Hawkins Delafield & Wood LLP, 67 Wall Street, New York, New York.
The Bonds shall be in definitive form, bearing CUSIP numbers and shall be
registered in the name of Cede & Co.
8. Conditions of Closing. The obligation of the Underwriters to purchase
and pay for the Bonds on the Closing Date shall be subject to the due
performance by the Authority and the Company of their respective obligations to
be performed under this Bond Purchase Agreement prior to or on the Closing Date,
and the accuracy of the respective representations and warranties of the
Authority and the Company contained herein, as of the date hereof and as of the
Closing Date, and shall also be subject to the following additional conditions:
(a) The Resolution shall have been duly adopted and the Official Statement, the
Bonds, the Indenture, the Participation Agreement, the Company Note, the
Tax Regulatory Agreement, the Insurance Policy and the Company's Disclosure
Certificate shall have been duly authorized, executed and delivered, and
each of the foregoing shall be in full force and effect and shall not have
been amended, modified or supplemented except as may have been mutually
agreed to by the Underwriters.
(b) Subsequent to the acceptance of this Bond Purchase Agreement by the
Authority and the Company:
(i) There shall not have occurred any material event in or affecting
particularly the business or properties of the Company which, in the
reasonable judgment of the Underwriters, materially impairs the
investment quality of the Bonds;
13
(ii) The marketability of the Bonds or the market price thereof shall not,
in the reasonable judgment of the Underwriters, have been materially
and adversely affected by reason of:
(A) legislation introduced in or passed by the House of
Representatives or the Senate of the Congress of the United
States, or recommended to the Congress of the United States for
passage by the President of the United States or favorably
reported for passage to either the House of Representatives or
the Senate by any committee of either such body to which such
legislation has been referred for consideration, or
(B) a decision rendered by a court established under Article III of
the Constitution of the United States, or the Tax Court of the
United States, or a New York court, or
(C) a ruling, regulation, order or release made or proposed by the
Treasury Department of the United States or the Internal Revenue
Service,
in each such case with the purpose or effect, directly or indirectly, of
imposing Federal or New York State or local income taxation, or the
occurrence of any other event which results in the imposition of Federal or
New York State or local income taxation, upon revenues or other income to
be derived by the Authority or upon interest received on obligations of the
general character of the Bonds, which fails to exempt interest on bonds of
the specific character of the Bonds;
(iii) Moody's Investors Service, Inc., Standard & Poor's Ratings Services
or Fitch Ratings (each a "Rating Agency" and together, the "Rating
Agencies") shall not have:
(A) downgraded or withdrawn the rating of any security of the Company
or the Insurer, or
(B) issued an adverse credit report of which the Company or the
Insurer is the subject or publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's or the Insurer's debt securities
which, in any such case, in the reasonable opinion of the
Underwriters, materially adversely affects the market price of
the Bonds.
(iv) No proceeding shall be pending or threatened by the Commission against
the Company and trading in any securities of the Company shall not
have been suspended on any national securities exchange;
(v) No order, decree or injunction of any court of competent jurisdiction,
nor any order, ruling, regulation or administrative proceeding by the
Commission or any other governmental body or board, shall have been
issued or commenced, nor shall any legislation have been enacted, to
14
the effect that the offering, sale or delivery of the Bonds as
contemplated hereby or by the Official Statement is or would be in
violation of any provision of the Securities Act of 1933, as amended
(the "Securities Act"), the Exchange Act or the Trust Indenture Act of
1939, as amended, or with the purpose or effect of prohibiting the
offering or sale of the Bonds as contemplated hereby or by the
Official Statement or of obligations of the general character of the
Bonds, or the execution or performance of the Participation Agreement,
the Indenture, the Company Note, the Tax Regulatory Agreement, the
Insurance Policy or the Company's Disclosure Certificate, in
accordance with their respective terms; and
(vi) No legislation, ordinance, rule or regulation shall have been
introduced in, or enacted by, any governmental body, department or
agency in the State of New York, nor shall a decision by any court of
competent jurisdiction within the State of New York have been
rendered, nor shall any Federal or New York State or municipal
executive order have been issued, which, in the reasonable opinion of
the Underwriters, would have a material adverse effect on the market
price of the Bonds.
(c) The marketability of the Bonds shall not, in the reasonable judgment of the
Underwriters, be adversely affected by reason of (i) the occurrence of a
general suspension of trading on the New York Stock Exchange or the
imposition of additional material restrictions not in force as of the date
hereof upon trading in securities generally by any governmental authority;
(ii) the imposition by the New York Stock Exchange, or any governmental
authority, as to the Bonds or similar obligations, of any material
restrictions not now in force or increasing materially those now in force
with respect to the extension of credit by, or the charge to the net
capital requirements of, the Underwriters; (iii) the establishment of a
general banking moratorium by Federal or New York authorities; (iv) any
major financial crisis or material disruption in commercial banking or
securities clearance services in the United States; or (v) any outbreak of
hostilities or the declaration of a war directly involving the United
States of America, or the occurrence of any other national or international
calamity, crisis or emergency, or the escalation of any of the above or any
conflict involving the armed forces of the United States of America, on or
after the date of this Bond Purchase Agreement.
(d) On or prior to the Closing Date, the Underwriters shall have received the
following documents, in each case satisfactory in form and substance to the
Underwriters and to their counsel:
(1) Three copies of the Official Statement executed on behalf of the
Authority by its Chairman or President;
(2) Executed counterparts of the Tax Regulatory Agreement and
executed Company's Disclosure Certificate;
15
(3) The Indenture executed on behalf of the Authority and the
Trustee;
(4) The Participation Agreement executed on behalf of the Authority
and the Company;
(5) An executed copy of the Insurance Policy;
(6) A certificate of the Authority, dated the Closing Date, signed by
an authorized officer of the Authority, to the effect that (i)
each of the representations and warranties of the Authority
contained in Section 5 hereof is true and correct on and as of
the Closing Date as if such representations and warranties had
been made on and as of the Closing Date, (ii) the Authority has
complied with all the terms of this Bond Purchase Agreement, the
Participation Agreement, the Indenture and the Tax Regulatory
Agreement to be complied with by it prior to or on the Closing
Date and (iii) the Authority is aware of no event of default that
has occurred and is continuing under the Indenture or the
Participation Agreement;
(7) Arbitrage certifications executed by appropriate officers of the
Authority and the Company;
(8) A certificate of the Company, dated the Closing Date, signed by
the Chairman of the Board, the President, a Vice President, the
Treasurer or an Assistant Treasurer of the Company, to the effect
that (i) each of the representations and warranties of the
Company contained in Section 6 hereof is true and correct on and
as of the Closing Date as if such representations and warranties
had been made on and as of the Closing Date, (ii) the Company has
duly complied with all the terms of this Bond Purchase Agreement,
the Company's Disclosure Certificate, the Tax Regulatory
Agreement, the Company Note and the Participation Agreement to be
complied with by it, and has satisfied all conditions on its part
to be satisfied, prior to or on the Closing Date, (iii) the
Company is aware of no event of default that has occurred and is
continuing under the Indenture, the Participation Agreement or
the Tax Regulatory Agreement and (iv) as of the Closing Date,
there has been no material adverse change (whether or not arising
from transactions in the ordinary course of business) in the
business, properties, condition (financial or otherwise) or
operations of the Company from that set forth in or contemplated
by the Official Statement;
(9) Opinions, dated the Closing Date, of (i) Hawkins Delafield & Wood
LLP, Bond Counsel, addressed to the Underwriters and (A) in
substantially the form attached to the Official Statement as
Appendix B, and (B) in the form attached hereto as Exhibit A;
(ii) Counsel of the Company, (A) addressed to the Underwriters
16
and in substantially the form attached hereto as Exhibit B,
together with reliance letters addressed to the Authority, the
Trustee and the Insurer, and (B) addressed to the Authority and
Bond Counsel with respect to tax covenants of the Company; (iii)
Roger D. Avent, Esq., General Counsel of the Authority, addressed
to the Underwriters and in substantially the form attached hereto
as Exhibit C, and (iv) Counsel to the Insurer, addressed to the
Underwriters, the Authority and the Company, which opinion
authorizes the Trustee and Paying Agent and the Rating Agencies
to rely thereon as though such opinion were addressed to them,
and in substantially the form attached hereto as Exhibit D; in
each case with such changes from such respective forms as the
Underwriters shall approve;
(10) An opinion or opinions, dated the Closing Date, addressed to the
Underwriters, of Pillsbury Winthrop Shaw Pittman LLP, as counsel
for the Underwriters, with respect to the issue and sale of the
Bonds, the Official Statement and other related matters as the
Underwriters may require;
(11) A letter from Deloitte & Touche LLP, addressed to the
Underwriters and the Company and dated the Closing Date that sets
forth certain procedures which were agreed to by the
Underwriters;
(12) Evidence that the Approvals have been obtained and are in full
force and effect or have been duly waived;
(13) A letter from each Rating Agency verifying its rating of the
Bonds as "AAA" or "Aaa" or such other evidence of the rating as
is deemed acceptable by the Underwriters;
(14) Such additional certificates, proceedings, opinions, instruments
or documents as the Underwriters or counsel to the Underwriters
may reasonably request in connection with the transactions
contemplated by this Bond Purchase Agreement.
(e) On or prior to the Closing Date, the Company shall have delivered to the
Underwriters, by wire transfer of immediately available funds, the amounts
representing the underwriting commission specified in Section 2 hereof in
connection with the offering and sale of the Bonds.
Delivery of the aforesaid documents shall be made at the offices of Hawkins
Delafield & Wood LLP, 67 Wall Street, New York, New York. If the Authority or
the Company shall be unable to satisfy the respective conditions to the
obligations of the Underwriters contained in this Bond Purchase Agreement, or if
the obligations of the Underwriters shall be terminated for any reason permitted
by this Bond Purchase Agreement, the Underwriters may cancel this Bond Purchase
17
Agreement. Upon any such cancellation, neither the Underwriters, the Authority
nor the Company shall be under further obligation hereunder except as provided
in Sections 10 and 11 hereof.
9. Supplements or Amendments to Official Statement. The Authority will not
adopt any amendment of or supplement to the Official Statement to which the
Underwriters or the Company shall reasonably object in writing. During the
underwriting period, if any event shall occur as a result of which it is
necessary, in the opinion of the Underwriters or counsel to the Underwriters, to
amend or supplement the Official Statement in order to make the statements
therein, in the light of the circumstances when the Official Statement is
delivered to a purchaser or a potential purchaser, not misleading, the Authority
and the Company will cooperate, at the request of the Underwriters, in the
prompt preparation and delivery to the Underwriters, at the Company's expense,
of either amendments or supplements to the Official Statement so that the
statements in the Official Statement as so amended or supplemented will not, in
the light of the circumstances when the Official Statement is delivered to a
purchaser or a potential purchaser, be misleading.
10. Expenses. The Underwriters shall be under no obligation to pay, and the
Company shall pay, any expenses incident to the performance of the obligations
of the Authority and the Company under this Bond Purchase Agreement and to the
sale and delivery of the Bonds to the Underwriters, including, but not limited
to: (i) the cost of the preparation and printing of the Indenture, the Company's
Disclosure Certificate, the Participation Agreement, the Tax Regulatory
Agreement, the Company Note, the Preliminary Official Statement, the Official
Statement and any supplements or amendments to either thereof, the Bonds and
this Bond Purchase Agreement and all other agreement and documents contemplated
hereby, (ii) the reasonable fees and disbursements of Hawkins Delafield & Wood
LLP, Bond Counsel, (iii) reimbursement to the Underwriters for their incremental
costs in arranging payment for the Bonds in immediately available funds, (iv)
the Bond Market Association filing fee in connection with the Bonds, (v) any
fees and disbursements of the Trustee, including the reasonable fees and
disbursements of counsel to the Trustee and (vi) the reasonable fees and
disbursements of counsel for the Underwriters, including, without limitation,
those incurred in connection with the qualification of the Bonds for sale, and
the determination of their eligibility for investment, under the laws of various
jurisdictions and the preparation of the Blue Sky Memorandum. In the event the
Bonds are not purchased by the Underwriters, the Company shall pay the
reasonable fees and expenses of counsel to the Underwriters and the reasonable
fees and disbursements of Hawkins Delafield & Wood LLP, Bond Counsel. The
Underwriters shall pay (i) all advertising expenses in connection with any
offering of the Bonds and (ii) all other expenses incurred by it in connection
with the offering and distribution of the Bonds.
11. Indemnification. (a) To the extent permitted by law, the Company shall
indemnify and hold harmless the Authority, any Underwriters, each of their
respective members, directors, officers, employees and agents and each person,
if any, who controls the Authority or any Underwriter within the meaning of
Section 15 of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified party may become
subject under any statute or at law or in equity or otherwise, and shall
reimburse any such indemnified party for any legal or other expenses reasonably
incurred by it in connection with investigating any claims and defending any
actions, insofar as such losses, claims, damages, liabilities or expenses arise
18
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Official Statement or the Official
Statement, or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon the
Authority Information, DTC Information, the Underwriters Information, the
Insurer Information or under the heading "TAX MATTERS" contained in the
Preliminary Official Statement or the Official Statement.
(b) Each Underwriter agrees severally and not jointly to indemnify and hold
harmless the Authority, the Company, each of their respective members,
directors, officers and employees, and each person, if any, who controls
the Authority or the Company within the meaning of Section 15 of the
Securities Act to the same extent as the foregoing indemnity from the
Company to the Authority and the Underwriters, but only insofar as losses,
claims, damages, liabilities or expenses are caused by any untrue statement
or omission or alleged untrue statement or omission based upon the
Underwriters Information in the Preliminary Official Statement or the
Official Statement, or in any amendment thereof or supplement thereto.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
of this Section 11 of notice of the commencement of any action, and as a
condition to indemnification under this Section 11, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than under this Section 11. In case
any such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party
will be entitled, at its own expense, to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of
its election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 11 for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed
19
such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel), (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party.
(d) If the indemnification provided for in this Section 11 is applicable in
accordance with its terms but for any reason is held to be unavailable to
or insufficient to hold an indemnified party harmless under subsection (a)
or (b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then the Company and the
Underwriters shall contribute to the amount paid or payable by such
indemnified party as a result of said losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Bonds
to which said loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then the Company and
the Underwriters shall contribute to the amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in said losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the true or
allegedly untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by the indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Underwriters shall not be required
to contribute any amount in excess of the amount by which the underwriting
discounts and commissions received by it exceeds the amount of any damages
20
that said Underwriters has otherwise been required to pay by reason of said
untrue or allegedly untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of the fraudulent misrepresentation. The foregoing
provisions regarding contribution shall apply except as otherwise required
by applicable law.
12. Notices. Any notice or other communication to be given to the Authority
or the Company under this Bond Purchase Agreement may be given by delivering the
same in writing at such party's address set forth above, in the case of the
Authority, to the attention of the President, and, in the case of the Company,
to The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York, One
MetroTech Center, Brooklyn, New York 11201-3851, Attention: Stephen McCaffrey
and any notice or other communication to be given to the Underwriters under this
Bond Purchase Agreement may be given by delivering the same in writing to Morgan
Stanley & Co. Incorporated at 1221 Avenue of the Americas, 30th Floor, New York,
New York 10020, Attention: Jay Sweeney, Managing Director; BNY Capital Markets,
Inc. at One Wall Street, New York, New York 10286, Attention: Daniel C. de
Menocal, Managing Director; Sovereign Securities Corporation, LLC at 1500 Market
Street, Center Square Concourse, Philadelphia, Pennsylvania 19102, Attention:
Robert Bahara, Managing Director; and The Williams Capital Group, L.P. at 650
Fifth Avenue, 10th Floor, New York, New York 10286, Attention: Jonathan Levin,
Principal.
13. Parties in Interest; Survival of Representations and Warranties;
Survival of Obligations Under Section 11 Hereof. This Bond Purchase Agreement is
made solely for the benefit of the Authority, the Company and the Underwriters
(including the successors or assigns of the Underwriters) and no other person
shall acquire or have any right hereunder or by virtue hereof. All the
representations, warranties and agreements of the parties hereto contained in
this Bond Purchase Agreement shall remain operative and in full force and
effect, regardless of (i) any investigations made by or on behalf of the
Underwriters, the Authority or the Company, (ii) delivery of and payment for the
Bonds hereunder and (iii) any termination of this Bond Purchase Agreement. The
obligations of the Company and the Underwriters under Section 11 hereof shall
remain operative and in full force and effect, regardless of (i) delivery of and
payment for the Bonds hereunder and (ii) any termination of this Bond Purchase
Agreement.
14. Governing Law. This Bond Purchase Agreement shall be governed by and
construed in accordance with the law of the State of New York.
15. Entire Agreement; Headings. This Bond Purchase Agreement, together with
any contemporaneous written agreements and any prior written agreements (to the
extent not superseded by this Bond Purchase Agreement) that relate to the
offering of the Bonds, represents the entire agreement between the Authority,
the Company and the Underwriters with respect to the preparation of the
Preliminary Official Statement, the Official Statement, and the conduct of the
offering, and the purchase and sale of the Bonds. The headings of the sections
of this Bond Purchase Agreement are inserted for convenience only and shall not
be deemed to be a part hereof.
21
16. Counterparts. This Bond Purchase Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
22
If you agree with the foregoing, please sign the enclosed counterpart of
this letter and return it to the Underwriters, whereupon this letter shall
become a binding agreement between you and the Underwriters.
MORGAN STANLEY & CO. INCORPORATED
BNY CAPITAL MARKETS, INC.
SOVEREIGN SECURITIES CORPORATION, LLC
THE WILLIAMS CAPITAL GROUP, L.P.
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/
-----------------
Name: F.J. Sweeney
Title: Managing Director
The foregoing Bond Purchase Agreement is hereby
accepted as of the date first above written
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By: /s/
--------------
Name: Peter R. Smith
Title: President
THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK
By: /s/
------------------
Name: Michael J. Taunton
Title: Senior Vice President & Treasurer
23
EXHIBIT A
Form of Opinion of
Hawkins Delafield & Wood LLP, Bond Counsel
November 1, 2005
New York State Energy Research
and Development Authority
17 Columbia Circle
Albany, New York 12203-6399
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas, 30th Floor
New York, New York 10020
BNY Capital Markets, Inc.
One Wall Street
New York, New York 10286
Sovereign Securities Corporation, LLC
1500 Market Street
Center Square Concourse
Philadelphia, Pennsylvania 19102
The Williams Capital Group, L.P.
650 Fifth Avenue, 10th Floor
New York, New York 10286
Ladies and Gentlemen:
In connection with the issuance of $82,000,000 aggregate principal amount
of 4.70% Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company d/b/a
KeySpan Energy Delivery New York Project), 2005 Series A (the "Bonds") issued by
New York State Energy Research and Development Authority (the "Authority"), a
body corporate and politic constituting a public benefit corporation created by
the State of New York, which Bonds are being purchased by you pursuant to a Bond
Purchase Agreement, dated October 26, 2005 (the "Bond Purchase Agreement"), with
the Authority and The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery
New York (the "Company"), we have examined:
(a) A copy of the Indenture of Trust dated as of November 1, 2005, herein
called the "indenture," between the Authority and Citibank, N.A., as
trustee, pursuant to which the Bonds are outstanding and are secured;
(b) A copy of the Official Statement of the Authority, dated October 26,
2005, relating to the Bonds, excluding each of Appendix A, Appendix B
and Appendix D thereto (the "Official Statement");
(c) A copy of the Bond Purchase Agreement;
(d) A copy of the Participation Agreement relating to the Bonds dated as
of November 1, 2005, between the Authority and the Company (the
"Participation Agreement");
(e) A copy of the Tax Regulatory Agreement, dated November 1, 2005,
between the Authority and the Company (the "Tax Regulatory
Agreement"); and
(f) A copy of the municipal bond new issue insurance policy issued by the
Insurer;
and such documents, proceedings and matters of law which we have considered
necessary to enable us to render this opinion. We have assumed but have not
independently verified that the signatures on all documents and certificates
that we have examined were genuine. We have further assumed for the purposes of
the opinions expressed below that the Bond Purchase Agreement has been duly
authorized, executed and delivered by each party thereto, other than the
Authority.
In accordance with our understanding with the Authority and as its Bond
Counsel, we rendered legal advice and assistance to the Authority in connection
with the preparation of the Official Statement. Rendering such advice and
assistance involved, among other things, discussions and inquiries concerning
various legal and related subjects, and reviews of and reports on certain
documents and proceedings. We also participated in conferences with
representatives of the Authority, the Company and its counsel and
representatives of the Underwriters and their counsel, during which the contents
of the Official Statement and related matters were discussed and reviewed. Based
upon such advice, assistance and participation, we are of the opinion that the
summaries contained in the Official Statement relating to the Bonds under the
captions entitled "THE AUTHORITY," "THE BONDS" (including all sections
referenced therein, but with the exception of the information therein under the
subheading "Securities Depository"), "THE PARTICIPATION AGREEMENT," "THE TAX
REGULATORY AGREEMENT," "THE INDENTURE" and "TAX MATTERS" accurately and fairly
present in all material respects the information purported to be set forth in
such summaries and nothing has come to our attention which causes us to believe
that such information in the Official Statement at the time the Authority
authorized its use and executed it on October 26, 2005, did, and as it may have
been amended or supplemented, does, contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made in
such summaries, in light of the circumstances under which they were made, not
misleading.
We are further of the opinion that:
(1) The Authority has the right and power under the New York State Energy
Research and Development Authority Act (Title 9 of Article 8 of the
Public Authorities Law of New York, as amended) to enter into and
perform its obligations under the Bond Purchase Agreement, and the
Bond Purchase Agreement has been duly authorized, executed, and
delivered by the Authority and constitutes a valid and binding
obligation on the part of the Authority in accordance with its terms,
except as the enforcement thereof may be limited by applicable
2
bankruptcy, insolvency, moratorium, reorganization or other laws or
judicial decisions or principles of equity relating to or affecting
the enforcement of creditors' rights or contractual obligations
generally.
(2) The Bonds are exempted securities within the meaning of Section
3(a)(2) of the Securities Act of 1933, as amended, and Section
304(a)(4) of the Trust Indenture Act of 1939, as amended.
(3) It is not necessary in connection with the offering and sale of the
Bonds to the public to register any security under the Securities Act
of 1933, as amended, or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.
We hereby confirm our consent to the references to us in the Official
Statement under the heading "LEGAL MATTERS."
Very truly yours,
3
EXHIBIT B
Form of Opinion of
Counsel to the Company
November 1, 2005
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas, 30th Floor
New York, New York 10020
BNY Capital Markets, Inc.
One Wall Street
New York, New York 10286
Sovereign Securities Corporation, LLC
1500 Market Street
Center Square Concourse
Philadelphia, Pennsylvania 19102
The Williams Capital Group, L.P.
650 Fifth Avenue, 10th Floor
New York, New York 10286
Ladies and Gentlemen:
I am General Counsel to The Brooklyn Union Gas Company d/b/a KeySpan Energy
Delivery New York (the "Company") and as such have the general supervision of
the Company's legal affairs and the personnel of the Company's Law Department. I
and other members of the Company's Law Department have represented the Company
in connection with the issue and sale of $82,000,000 aggregate principal amount
of 4.70% Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company d/b/a
KeySpan Energy Delivery New York Project), 2005 Series A (the "Bonds"), of New
York State Energy Research and Development Authority (the "Authority") and the
concurrent issue and delivery by the Company of its related promissory note (the
"Note") pursuant to the Participation Agreement dated as of November 1, 2005,
herein called the "Participation Agreement," between the Authority and the
Company, and the execution and delivery by the Company of the Bond Purchase
Agreement dated October 26, 2005 (the "Bond Purchase Agreement") among you, the
Authority and the Company. The terms "Official Statement," "Indenture,"
"Insurance Policy," "Insurance Agreement," "Company's Disclosure Certificate"
and "Tax Regulatory Agreement" are used in this opinion with the respective
meanings assigned to such terms in the Bond Purchase Agreement.
We have examined the Participation Agreement, the Note, the Indenture, the
Tax Regulatory Agreement, the Company's Disclosure Certificate, the Bond
Purchase Agreement, the Official Statement, the Insurance Policy, the Insurance
Agreement, and such other documents, and have discussed the foregoing documents
and such other matters, with such personnel of the Company's Law Department and
such officials of the Company, as I consider necessary and appropriate to enable
me to express the opinions stated in this letter.
I have assumed, with your consent, for the purposes of the opinions
expressed in this letter that the Participation Agreement, the Indenture, the
Tax Regulatory Agreement, the Insurance Policy, the Insurance Agreement and the
Bond Purchase Agreement have been duly authorized, executed and delivered by
each party thereto, other than the Company.
Based upon the foregoing, it is my opinion that:
(a) the Company has been duly incorporated and is in good standing
under the laws of the State of New York, has corporate power and authority
to own its properties and to conduct its business and, except as described
in the Official Statement, to the best of my knowledge, possesses all
material licenses and approvals necessary for the conduct of its business;
(b) the Company has corporate power and authority to execute and
deliver, and to take all actions required or permitted to be taken by the
Company by or under, and to perform and observe the covenants and
agreements on its part contained in the Bond Purchase Agreement, the
Participation Agreement, the Note, the Tax Regulatory Agreement, the
Company's Disclosure Certificate and the Insurance Agreement;
(c) the Company has duly taken all corporate action necessary to be
taken by it prior to the date hereof for the authorization of: (i) the
execution, delivery and performance by the Company of the Bond Purchase
Agreement, the Participation Agreement, the Note, the Tax Regulatory
Agreement, the Company's Disclosure Certificate and the Insurance
Agreement, (ii) the distribution of the Official Statement and (iii) the
carrying out, giving effect to, consummation and performance by the Company
of the transactions and obligations contemplated by the Bond Purchase
Agreement, the Participation Agreement, the Note, the Insurance Policy, the
Insurance Agreement, the Tax Regulatory Agreement, the Company's Disclosure
Certificate and the Official Statement; provided, that no opinion is
expressed with respect to compliance with the securities or "Blue Sky" laws
of the various states of the United States;
(d) the Bond Purchase Agreement, the Participation Agreement, the
Note, the Tax Regulatory Agreement, the Company's Disclosure Certificate
and the Insurance Agreement have been duly executed and delivered by the
Company and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the
enforcement of creditors' rights or contractual obligations generally or by
principles of equity (regardless of whether such principles are considered
in a proceeding at law or in equity) and except as rights of
indemnification under the Bond Purchase Agreement may be limited by
principles of public policy;
(e) the execution and delivery by the Company of the Bond Purchase
Agreement, the Participation Agreement, the Note, the Tax Regulatory
Agreement, the Company's Disclosure Certificate and the Insurance
Agreement, the compliance by the Company with the terms, conditions or
provisions thereof, and the consummation by the Company of the transactions
therein contemplated do not and will not violate any existing New York or
2
federal law or regulation, or contravene the Certificate of Incorporation
or by-laws of the Company, or, to the best of my knowledge, any rule,
order, writ, injunction or decree of any court, federal or state regulatory
body, administrative agency or other governmental body applicable to the
Company, or result in a breach of any of the terms, conditions or
provisions of, or constitute a default under any mortgage, indenture,
agreement or instrument to which the Company is a party or by which it or
any of its properties is bound and of which I have knowledge, or, to the
best of my knowledge, result in the creation or imposition of any mortgage,
lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company;
(f) on and as of the date hereof, all authorizations, consents and
approvals of, notices to, registrations or filings with, or actions in
respect of, any governmental body, agency, regulatory authority or other
instrumentality or court required to be obtained, given or taken on behalf
of the Company in connection with the procurement of the Insurance Policy
and the execution and delivery of, and performance by the Company of its
obligations under, the Bond Purchase Agreement, the Participation
Agreement, the Note, the Tax Regulatory Agreement, the Company's Disclosure
Certificate and the Insurance Agreement, including, without limitation,
orders of the Public Service Commission of the State of New York, have been
obtained, given or taken and are in full force and effect, provided that no
opinion is expressed with respect to compliance with the securities or
"Blue Sky" laws of the various states of the United States;
(g) the Company has not received notice of process in any action,
suit, proceeding, inquiry or investigation before or by any court, public
board or body, other than as described in the Official Statement, pending
against or affecting the Company, nor, to the best of my knowledge, and
except as may be set forth in the Official Statement, is any such action,
suit, proceeding, inquiry or investigation pending or threatened against or
affecting the Company, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the properties, business, condition
(financial or other) or results of operations of the Company or the
transactions contemplated by the Bond Purchase Agreement, the Participation
Agreement, the Note, the Indenture, the Tax Regulatory Agreement, the
Company's Disclosure Certificate, the Insurance Policy or the Insurance
Agreement, or which would adversely affect the validity or enforceability
of, or the authority of the Company to perform its obligations under, the
Bond Purchase Agreement, the Participation Agreement, the Note, the Tax
Regulatory Agreement, the Company's Disclosure Certificate or the Insurance
Agreement, or materially adversely affect the ability of the Company to
perform its obligations thereunder;
(h) the Company is not in default under any indenture or other
agreement or instrument governing outstanding indebtedness issued by the
Company nor, to the best of my knowledge, has any event occurred and is
continuing which with notice or the passage of time or both would
constitute a default under any such document;
3
(i) the statements contained in the Official Statement under the
headings "Introductory Statement," "The Project," "Use of Proceeds," "The
Bonds" (other than statements under the subheading "--Securities
Depository"), "The Participation Agreement," "The Tax Regulatory
Agreement," "The Indenture," "The Insurance Policy," "The Insurance
Agreement," "Continuing Disclosure Undertaking" and "Underwriting," insofar
as such statements summarize the terms and provisions of the documents
referred to therein, present an accurate summary of such terms and
provisions;
(j) the Bonds are exempted securities under the Securities Act of
1933, as amended (the "Securities Act"), and the offer and sale thereof do
not require registration under the Securities Act or qualification of the
Indenture under the Trust Indenture Act of 1939, as amended.
In expressing the opinion in paragraph (j) of this letter I have relied,
with your approval, upon the opinion of even date herewith, addressed to the
Company, of Hawkins Delafield & Wood LLP with respect to the treatment of the
Bonds under the Internal Revenue Code of 1954.
Additionally, I advise you that, without having undertaken to determine
independently the accuracy or completeness of the statements contained in the
Official Statement, except as set forth above, nothing has come to my attention
in the course of my participation in the preparation of the Official Statement
and in the transactions contemplated thereby, or in the performance of my duties
as General Counsel to the Company or otherwise, that would lead me to believe
that, as of its date or as of the date hereof, the Official Statement, contained
or contains any untrue or misleading statement of a material fact or omitted or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
I am a member of the Bar of the State of New York and I do not express any
opinion herein concerning any law other than the law of the State of New York
and the federal laws of the United States.
I hereby confirm my consent to the use of my name in the Official Statement
under the caption "Legal Matters."
Very truly yours,
4
EXHIBIT C
Form of Opinion of Roger D. Avent,
General Counsel of the Authority
November 1, 2005
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas, 30th Floor
New York, New York 10020
BNY Capital Markets, Inc.
One Wall Street
New York, New York 10286
Sovereign Securities Corporation, LLC
1500 Market Street
Center Square Concourse
Philadelphia, Pennsylvania 19102
The Williams Capital Group, L.P.
650 Fifth Avenue, 10th Floor
New York, New York 10286
Ladies and Gentlemen:
I am General Counsel of New York State Energy Research and Development
Authority (the "Authority") and have acted as such in connection with the
issuance of $82,000,000 aggregate principal amount of 4.70% Gas Facilities
Revenue Bonds (The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New
York Project), 2005 Series A (the "Bonds") by you pursuant to a Bond Purchase
Agreement dated October 26, 2005, among the Authority, The Brooklyn Union Gas
Company d/b/a KeySpan Energy Delivery New York (the "Company"), and you (the
"Bond Purchase Agreement"). I have examined, or supervised the examination of,
(i) the Bond Resolution No. 1093 adopted by the Authority on September 19, 2005
relating to the Bonds (the "Resolution"), (ii) the Indenture of Trust, dated as
of November 1, 2005, between Citibank, N.A., as trustee (the "Trustee") and the
Authority, relating to the Bonds (the "Indenture"), (iii) the Participation
Agreement, dated as November 1, 2005, between the Company and the Authority,
relating to the Bonds (the "Participation Agreement"), (iv) the Bond Purchase
Agreement, relating to the Bonds, (v) the Tax Regulatory Agreement, dated as of
the date hereof, between the Authority and the Company, relating to the Bonds
(the "Tax Regulatory Agreement"), (vi) the Official Statement dated October 26,
2005, relating to the Bonds (the "Official Statement"), excluding the Appendices
thereto, and (vii) such further documents, and have made such further
investigation, as I have deemed necessary to render the opinions set forth
below.
I have assumed, with your consent, for the purposes of the opinions
expressed in this letter that the Participation Agreement, the Indenture, the
Tax Regulatory Agreement, the Bonds, and the Bond Purchase Agreement have been
duly authorized, executed, and delivered by each party thereto, other than the
Authority.
Based on the foregoing, it is my opinion that:
1. The Authority is a body corporate and politic, constituting a public
benefit corporation under the laws of the State of New York. The Authority is
empowered by the provisions of the New York State Energy Research and
Development Authority Act, Title 9 of Article 8 of the Public Authorities Law of
the State of New York (the "Act"), to issue the Bonds, to cause the Company to
deliver the Company Obligation (as defined in the Indenture) to the Trustee, to
assign and pledge to the Trustee certain of the Authority's rights under the
Participation Agreement, as security for payment of the principal of and
premium, if any, and interest on the Bonds, and to enter into and perform its
obligations under the Bond Purchase Agreement, the Indenture, the Participation
Agreement, the Tax Regulatory Agreement, and any other instrument or agreement
to which the Authority is a party and which has been executed in connection with
the transactions contemplated by the documents identified in the introductory
paragraph of this opinion in order to accomplish the foregoing actions.
2. The Authority has full power and authority to execute and deliver the
Bond Purchase Agreement, the Tax Regulatory Agreement, the Participation
Agreement, and the Indenture, and to take all actions required or permitted to
be taken by the Authority by or under, and to perform and observe the covenants
and agreements on its part contained in, the Bond Purchase Agreement, the
Indenture, the Participation Agreement, the Tax Regulatory Agreement, and any
other instrument or agreement relating thereto to which the Authority is a
party, and the Authority has complied with all provisions of applicable law,
including the Act, in all matters related to such actions.
3. The Authority has duly authorized and has taken all action necessary to
be taken by it or on its behalf for: (i) the offering and sale of the Bonds upon
the terms and conditions and for the purposes set forth in the Bond Purchase
Agreement and in the Official Statement; (ii) the execution, delivery, and
performance of the Bond Purchase Agreement, the Indenture, the Participation
Agreement, the Tax Regulatory Agreement, and any and all such other agreements
and documents as may be required to be executed, delivered, and performed by the
Authority to carry out, give effect to, and consummate the transactions provided
for in the Bond Purchase Agreement, the Indenture, the Tax Regulatory Agreement,
the Participation Agreement, and the Official Statement; (iii) the approval,
execution, delivery, and distribution of the Official Statement; and (iv) the
carrying out, giving effect to, consummation, and performance of the
transactions and obligations contemplated by the Bond Purchase Agreement and by
the Official Statement; provided that no opinion is expressed with respect to
compliance with the securities or "Blue Sky" laws of the various states of the
United States.
4. The Indenture constitutes a pledge and assignment to the Trustee of
substantially all of the Authority's rights and interest under the Participation
Agreement, the Company Obligation, and the Tax Regulatory Agreement, all for the
benefit of the holders from time to time of the Bonds. I have caused financing
statements with respect to such pledge and assignment to be filed in proper form
pursuant to the New York State Uniform Commercial Code, in the office of the
Secretary of State of the State of New York.
5. The Bonds have been duly authorized, executed, issued, and delivered,
and constitute valid and binding limited obligations of the Authority
enforceable in accordance with their terms and the terms of the Indenture and
entitled to the benefits and security of such Indenture, the Participation
Agreement, the Company Obligation, and the Act, except to the extent enforcement
thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, or
similar laws affecting creditors' rights. The Indenture, the Participation
2
Agreement, the Tax Regulatory Agreement, and the Bond Purchase Agreement have
been duly authorized, executed, and delivered by the Authority and constitute
legal, valid, and binding obligations of the Authority, enforceable in
accordance with their terms except to the extent enforcement thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization, or other similar
laws affecting creditors' rights.
6. The execution and delivery of the Official Statement and the
authorization, execution, delivery, and performance of the Bond Purchase
Agreement, the Indenture, the Participation Agreement, the Tax Regulatory
Agreement, and the other agreements provided for in the Bond Purchase Agreement
and compliance with the provisions thereof do not and will not conflict with or
constitute on the part of the Authority a breach of or a default under any
existing constitutional provision or law, court, or administrative regulation,
rule, decree or order, or any rule, regulation, or by-law of the Authority, or
so far as I am aware after having made a reasonable investigation, any
agreement, indenture, mortgage, lease, or other instrument to which the
Authority or any of its officers in his or her respective capacity as such is
subject or by which the Authority or any of its properties or any such officer
is bound.
7. The approval or waiver of approval has been obtained from the Governor
of the State of New York, and approval has been obtained from the Commissioner
of Taxation and Finance, the State Comptroller, and the New York State Public
Authorities Control Board. No other authorization, consent, or approval of,
notice to, registration or filing with, or action in respect of any governmental
body, agency, or other instrumentality or court is required to be obtained,
given, or taken on behalf of the Authority in connection with the execution,
delivery, and performance by the Authority of the Bond Purchase Agreement, the
Indenture, the Participation Agreement, the Tax Regulatory Agreement, the
Official Statement, and any other agreement or instrument to which the Authority
is a party and which has been executed in connection with the consummation of
the transactions contemplated thereby; provided that no opinion is expressed
with respect to compliance with the securities or "Blue Sky" laws of the various
states of the United States.
8. The statements made in the Official Statement under the heading "THE
AUTHORITY", insofar as such statements purport to describe the Authority,
present a fair and accurate description thereof.
There is no action, suit, proceeding, inquiry, or investigation at law or
in equity, or before or by any court, public board or body, pending, or, to the
best of my knowledge, threatened against or affecting the Authority, wherein an
unfavorable decision, ruling, or finding would adversely affect the transactions
on the part of the Authority provided for by the Bond Purchase Agreement, the
Bonds, the Participation Agreement, the Tax Regulatory Agreement, or the
Indenture or the validity or enforceability of the Bonds, the Indenture, the
Participation Agreement, the Tax Regulatory Agreement, or any agreement or
instrument to which the Authority is a party and which is used or contemplated
for use in the consummation of the transaction provided for in the Bond Purchase
Agreement.
Sincerely,
Roger D. Avent
General Counsel
3
EXHIBIT D
FGIC
November 1, 2005
The Brooklyn Union Gas Company Sovereign Securities Corporation, LLC
d/b/a KeySpan Energy Delivery New York 1500 Market Street
One MetroTech Center Center Square Concourse
Brooklyn, New York 11201-3851 Philadelphia, Pennsylvania 19102
New York State Energy Research The Williams Capital Group, L.P.
and Development Authority 650 Fifth Avenue, 10th Floor
17 Columbia Circle New York, New York 10286
Albany, New York 12203-6399
Morgan Stanley & Co. Incorporated Citibank, N.A., as Trustee
1221 Avenue of the Americas, 30th Floor 388 Greenwich Street, 14th Floor
New York, New York 10020 New York, New York 10013
BNY Capital Markets, Inc.
One Wall Street
New York, New York 10286
Re: $82,000,000 in the aggregate principal amount of the New York State Energy
Research and Development Authority 4.70% Gas Facilities Revenue Bonds (The
Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project), 2005
Series A ("the Bonds")
- --------------------------------------------------------------------------------
Ladies and Gentlemen:
I am Counsel of Financial Guaranty Insurance Company ("Financial Guaranty"), and
have been requested to render an opinion concerning the issuance by Financial
Guaranty of its Municipal Bond New Issue Insurance Policy (the "Policy") in
connection with the issuance of the Bonds. I have examined such documents and
records as I have deemed relevant for purposes of this opinion, including (a)
the Certificate of Incorporation of Financial Guaranty, including all amendments
thereto, (b) the amended By-laws of Financial Guaranty as in effect on the date
hereof, (c) the certificate of authority issued to Financial Guaranty by the
Superintendent of Insurance of the State of New York, (d) the executed Policy,
(e) the statements in the Official Statement dated October 26, 2005 relating to
the Bonds (the "Official Statement") under the caption "THE INSURANCE POLICY"
and Appendix B to the Official Statement and (f) the Insurance Agreement dated
November 1, 2005 (the "Insurance Agreement") between Financial Guaranty and The
Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York (the
"Company").
FGIC
November 1, 2005
Page 2
On the basis of the foregoing, it is my opinion that:
(1) Financial Guaranty is a stock insurance corporation validly existing
and in good standing under the laws of the State of New York and qualified to do
business therein and is licensed and authorized to issue its financial guaranty
insurance policies, including the Policy, under the laws of the State of New
York.
(2) The Policy has been duly executed and is valid and binding upon
Financial Guaranty and enforceable in accordance with its terms, subject to
applicable laws affecting creditors' rights generally.
(3) The execution and delivery by Financial Guaranty of the Policy, and the
performance by Financial Guaranty of the terms thereof, will not: (i) conflict
with any of the terms, conditions or provisions of (A) the Certificate of
Incorporation of Financial Guaranty, including any amendments thereto, (B) the
amended By-laws of Financial Guaranty as in effect on the date hereof, or (C) to
my actual knowledge, any covenant contained in any contract, agreement or
instrument to which Financial Guaranty is bound, which contract, agreement or
instrument is material to the financial condition of Financial Guaranty; (ii) to
my actual knowledge, constitute a default under any such contract, agreement or
instrument or (iii) contravene any law or governmental regulation or order
presently binding on Financial Guaranty the contravention of which would affect
the validity and enforcement of the Policy.
(4) The Insurance Agreement has been duly authorized, executed and
delivered by Financial Guaranty and, assuming the due authorization, execution
and delivery thereof by the Company, constitutes a valid and legally binding
instrument of Financial Guaranty, enforceable against Financial Guaranty in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws affecting the enforcement of creditors' rights generally as such laws would
apply in the event of the liquidation, conservation or rehabilitation of, or
other similar occurrence with respect to, Financial Guaranty.
(5) Financial Guaranty, as an insurance company, is not eligible for relief
under the Federal Bankruptcy Laws. Any proceedings for the liquidation,
conservation or rehabilitation of Financial Guaranty would be governed by the
provisions of the Insurance Law of the State of New York.
(6) The statements described above in the Official Statement relating to
Financial Guaranty and the Policy accurately and fairly represent the summary
information set forth therein and do not omit any material fact with respect to
the description of Financial Guaranty relative to the material terms of the
FGIC
November 1, 2005
Page 3
Policy or the ability of Financial Guaranty to meet its obligations under the
Policy. The form of Policy contained in Appendix B to the Official Statement is
a true and complete copy of the form of the Policy.
(7) The Policy constitutes an "insurance policy" within the meaning of
Section 3(a)(8) of the Securities Act of 1933, as amended (the "Act") and is not
required to be registered under the Act.
Very truly yours,
Carmen Tigreros
Counsel