Exhibit 10.2
EXECUTION COPY
$55,000,000
New York State Energy Research and Development Authority
Gas Facilities Revenue Bonds
(The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project),
2005 Series B
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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:
Goldman, Sachs & Co., 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
$55,000,000 aggregate principal amount of Gas Facilities Revenue Bonds (The
Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project), 2005
Series B (the "Bonds"), for the purpose of refunding the Authority's $55,000,000
outstanding principal amount of Gas Facilities Revenue Bonds, Series C (The
Brooklyn Union Gas Company Project) (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. 1094 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"). In addition, the Trustee will enter into an Auction Agency Agreement
(the "Auction Agreement"), which the Company will acknowledge and agree to,
relating to the Bonds, dated as of November 1, 2005, with The Bank of New York
as Auction Agent (the "Auction Agent"), providing, among other things, that the
Auction Agent will follow certain auction procedures (each implementation
thereof, an "Auction") for the purpose of determining the rate of interest which
the Bonds will bear when such rate is to be determined by an Auction. The
Company and the Auction Agent will also enter into a separate Broker-Dealer
Agreement with respect to the Bonds with each of Goldman, Sachs & Co. and BNY
Capital Markets, Inc. (each, a "Broker-Dealer" and collectively, the
"Broker-Dealers"), each dated as of November 1, 2005 (collectively, the
"Broker-Dealer Agreements"). 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
$55,000,000 aggregate 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 of
$192,500 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.
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3. Official Statement and Compliance with Rule 15c2-12. The Authority and
the Company have made available to the Underwriters an official statement dated
October 19, 2005, 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"), (iv) an appendix
consisting of a summary of the procedures to be used in conducting Auctions (the
"Procedures Appendix") and (v) an appendix consisting of a form of the Company's
Disclosure Certificate (the "Disclosure Certificate Appendix" and, together with
the Company Appendix, the Opinion Appendix, the Policy Appendix and the
Procedures 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."
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 in
order to comply with paragraph (b)(4) of Rule 15c2-12 and the rules of the
Municipal Securities Rulemaking Board. 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 Official Statement is complete as of the date
delivered to the Underwriters, within the meaning of paragraph (f)(3) of Rule
15c2-12, except for the following information:
(i) under the heading "THE AUCTION RATE BONDS--Securities Depository"
concerning The Depository Trust Company ("DTC") and its book-entry
system ("DTC Information");
(ii) under the heading "INTRODUCTORY STATEMENT" in the last paragraph;
(iii) under the headings "THE PROJECT" and "CONTINUING DISCLOSURE
CERTIFICATE";
(iv) in the Company Appendix ("Company Information");
(v) under the heading "UNDERWRITING" in the second paragraph and on the
inside cover page in the last paragraph ("Underwriters Information");
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(vi) under the heading "THE AUCTION RATE BONDS--Special Considerations
Relating to the Auction Rate Bonds Bearing Interest at Auction Period
Rates"; and
(vii) 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 Official Statement, 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 as of the date delivered to the Underwriters, within the meaning of
paragraph (f)(3)of Rule 15c2-12.
The Authority and the Company confirm that, as of the date of the Official
Statement, the Authority deemed the information in the Official Statement, other
than the information referenced in subparagraphs (i) through (vi) above, and the
Company deemed the information in the Official Statement, other than the
Authority Information, the DTC Information, the Underwriters Information and the
Insurer Information, to have been final 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 and to notify the Company and the Authority of the date
of such filing.
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 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.
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,
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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 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.
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(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 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
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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.
(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.
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(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 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 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 Official Statement, possesses all
material licenses and approvals necessary for the conduct of its
business as described in 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 Auction Agreement, the Broker-Dealer Agreement, the
Remarketing 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, the
Auction Agreement, the Broker-Dealer Agreement, the Remarketing
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 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, the Auction Agreement, the Broker-Dealer
Agreement, the Remarketing 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, the Auction Agreement,
the Broker-Dealer Agreement, the Remarketing 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, the Auction Agreement,
the Broker-Dealer Agreement, the Remarketing 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
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Policy, the Insurance Agreement, the Auction Agreement, the
Broker-Dealer Agreement, the Remarketing Agreement, or the Company's
Disclosure Certificate, or which would 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, the Auction
Agreement, the Broker-Dealer Agreement, the Remarketing 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, the Auction Agreement, the Broker-Dealer
Agreement, the Remarketing Agreement and the Company's Disclosure
Certificate conform 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 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 apply the proceeds of the Bonds in a manner that is
consistent with the Indenture, the Participation Agreement and the Tax
Regulatory Agreement and 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
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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;
(n) The descriptions and information contained 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
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 or the
Underwriters, the Official Statement 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 Auction Agreement,
the Broker-Dealer Agreement, the Remarketing 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, the
Auction Agreement, the Broker-Dealer Agreement, the Remarketing
Agreement 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
13
the reasonable judgment of the Underwriters, materially impairs
the investment quality of the Bonds;
(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;
14
(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 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, the Auction Agreement, the Broker-Dealer
Agreement or the Company's Disclosure Certificate, in accordance
with their respective terms;
(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; and
(vii) There shall not have occurred any event that (i) makes untrue or
incorrect any statement or information of a material fact
contained in the Official Statement; or (ii) is not included in
the Official Statement but should be included therein in order to
make the statements and information contained therein, in light
of the circumstances under which they were made not misleading.
(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, minimum or maximum
prices for trading shall have been fixed and be in force or maximum
ranges or prices for securities shall have been required and be in
force 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.
15
(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 Auction Agreement, the Broker-Dealer
Agreement, the Remarketing Agreement, the Tax Regulatory
Agreement, the Company's Disclosure Certificate and the Bond
Purchase Trust Agreement;
(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 Auction Agreement, the Broker-Dealer Agreement, the
Remarketing Agreement, the Company's Disclosure Certificate, the
Tax Regulatory Agreement, the Company Note and the Participation
16
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
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;
17
(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
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 so that it will not contain any
untrue statement of a material fact or omit to state a material fact necessary
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 (or at the expense of the Broker-Dealers if such amendment or
supplement is required to update the statements contained under the heading "THE
AUCTION RATE BONDS-Special Considerations Relating to the Auction Rate Bonds
Bearing Interest at Auction Period Rates--The SEC is Reviewing Broker-Dealer
Practices in the Market for Auction-Rate Securities"), 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 Auction
Agreement, the Broker-Dealer Agreement, the Remarketing Agreement, the Company's
Disclosure Certificate, the Participation Agreement, the Tax Regulatory
Agreement, the Company Note, 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
18
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
and the Auction Agent, including the reasonable fees and disbursements of
counsel to the Trustee and the Auction Agent 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
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in 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 Insurer Information, the Underwriters Information or under the
heading "TAX MATTERS" contained in 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 contained in 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
19
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 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
20
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 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 at 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
Goldman, Sachs & Co. at 85 Broad Street, 24th Floor, New York, New York 10004,
Attention: R. Thornton Lurie, Vice President; 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
21
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. Remarketing Agent. Goldman, Sachs & Co. hereby accepts appointment as
Remarketing Agent for the Bonds and agrees to serve as such under the terms and
provisions of the Indenture, subject to the execution and delivery of a
remarketing agreement with the Company in customary form.
15. Governing Law. This Bond Purchase Agreement shall be governed by and
construed in accordance with the law of the State of New York.
16. Headings. 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.
17. 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.
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
SOVEREIGN SECURITIES CORPORATION, LLC
THE WILLIAMS CAPITAL GROUP, L.P.
By: GOLDMAN, SACHS & CO.
/s/
------------------------------
(Goldman, Sachs & Co.)
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
Goldman, Sachs & Co.
85 Broad Street, 24th Floor
New York, New York 10004
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 $55,000,000 aggregate principal amount
of Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York Project), 2005 Series B (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 19,
2005, relating to the Bonds, excluding each of Appendix A, Appendix D
and Appendix E 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");
(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," "SECURITY AND SOURCES OF PAYMENT," "THE
AUCTION RATE BONDS" (including all sections referenced therein, but with the
exception of the information therein under the subheading "Securities
Depository" and under the subheading "Special Considerations Relating to the
Auction Rate Bonds Bearing Interest at Auction Period Rates--The SEC is
Reviewing Broker-Dealer Practices in the Market for Auction-Rate Securities"),
"ALTERNATIVE INTEREST RATE MODES; MANDATORY TENDER FOR PURCHASE," "REDEMPTION,"
"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 19, 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
2
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
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 OPINIONS."
Very truly yours,
3
EXHIBIT B
Form of Opinion of
Counsel to the Company
November 1, 2005
Goldman, Sachs & Co.
85 Broad Street, 24th Floor
New York, New York 10004
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 $55,000,000 aggregate principal amount
of Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York Project), 2005 Series B (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," "Remarketing Agreement," "Insurance Agreement," "Company's
Disclosure Certificate," "Auction Agreement," "Broker-Dealer Agreements" 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 Bond Purchase Agreement, the Official Statement,
the Insurance Policy, the Insurance Agreement, the Company's Disclosure
Certificate, the Auction Agreement, the Broker-Dealer Agreements, the
Remarketing 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, the
Auction Agreement, the Broker-Dealer Agreements, the Remarketing 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
Insurance Agreement, the Auction Agreement, the Broker-Dealer Agreements,
the Company's Disclosure Certificate, and the Remarketing 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 Insurance Agreement, the Auction Agreement, the
Broker-Dealer Agreements, the Company's Disclosure Certificate, and the
Remarketing 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 Auction Agreement, the Broker-Dealer
Agreements, the Company's Disclosure Certificate, the Tax Regulatory
Agreement, the Remarketing Agreement 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 Insurance Agreement, the Auction
Agreement, the Broker-Dealer Agreements, the Company's Disclosure
Certificate, and the Remarketing 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
2
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 or
the Remarketing 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 Insurance Agreement, the Auction Agreement, the
Broker-Dealer Agreements, the Company's Disclosure Certificate, and the
Remarketing 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 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 Insurance Agreement,
the Auction Agreement, the Broker-Dealer Agreements, the Company's
Disclosure Certificate, and the Remarketing 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
3
Agreement, the Note, the Indenture, the Tax Regulatory Agreement, the
Insurance Policy, the Insurance Agreement, the Auction Agreement, the
Broker-Dealer Agreements, the Company's Disclosure Certificate, or the
Remarketing 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 Insurance Agreement,
the Auction Agreement, the Broker-Dealer Agreements, the Company's
Disclosure Certificate, or the Remarketing 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;
(i) the statements contained in the Official Statement under the
headings "Introductory Statement," "Use of Proceeds," "The Project,"
"Security and Sources of Payment," "The Auction Rate Bonds" (other than
statements (i) under the subheading "--Securities Depository" and (ii)
under the subheading "--Special Considerations Relating to the Auction Rate
Bonds Bearing Interest at Auction Period Rates--The SEC is Reviewing
Broker-Dealer Practices in the Market for Auction-Rate Securities"),
"Alternative Interest Rate Modes; Mandatory Tender for Purchase,"
"Redemption," "The Insurance Policy," "The Insurance Agreement," "The
Participation Agreement," "The Tax Regulatory Agreement," "The Indenture,"
"Continuing Disclosure Certificate" 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.
4
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 Opinions."
Very truly yours,
5
EXHIBIT C
Form of Opinion of Roger D. Avent,
General Counsel of the Authority
November 1, 2005
Goldman, Sachs & Co.
85 Broad Street, 24th Floor
New York, New York 10004
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 $55,000,000 aggregate principal amount of Gas Facilities Revenue
Bonds (The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York
Project), 2005 Series B (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. 1094 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 Bond Purchase Trust Agreement, dated
as of November 1, 2005, between the Authority and Citibank, N.A., as Registrar
and Paying Agent, relating to the Bonds (the "Bond Purchase Trust Agreement"),
(vi) the Tax Regulatory Agreement, dated as of the date hereof, between the
Authority and the Company, relating to the Bonds (the "Tax Regulatory
Agreement"), (vii) the Official Statement dated October 19, 2005, relating to
the Bonds (the "Official Statement"), excluding the Appendices thereto, and
(viii) 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, the Bond Purchase Trust Agreement, 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 Bond Purchase Trust 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, the Bond Purchase Trust 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 Bond
Purchase Trust 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, the Bond Purchase Trust 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, the
Bond Purchase Trust 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
2
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 Bond Purchase Trust 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 Agreement, the Tax Regulatory
Agreement, the Bond Purchase Trust 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, the Bond Purchase Trust 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 Bond
Purchase Trust 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
3
on the part of the Authority provided for by the Bond Purchase Agreement, the
Bonds, the Participation Agreement, the Tax Regulatory Agreement, the Bond
Purchase Trust Agreement, or the Indenture or the validity or enforceability of
the Bonds, the Indenture, the Participation Agreement, the Tax Regulatory
Agreement, the Bond Purchase Trust 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
4
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
Goldman, Sachs & Co. Citibank, N.A., as Trustee
85 Broad Street, 24th Floor 388 Greenwich Street, 14th Floor
New York, New York 10004 New York, New York 10013
BNY Capital Markets, Inc.
One Wall Street
New York, New York 10286
Re: $55,000,000 in the aggregate principal amount of the New York State Energy
Research and Development Authority Gas Facilities Revenue Bonds (The Brooklyn
Union Gas Company d/b/a KeySpan Energy Delivery New York Project), 2005 Series B
(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 certificate of
authority issued to Financial Guaranty by the Superintendent of Finance of the
State of New York, (e) the executed Policy, (f) the statements in the Official
Statement dated October 19, 2005 relating to the Bonds (the "Official
Statement") under the caption "THE INSURANCE POLICY" and Appendix D to the
FGIC
November 1, 2005
Page 2
Official Statement and (g) 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").
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
FGIC
November 1, 2005
Page 3
the description of Financial Guaranty relative to the material terms of the
Policy or the ability of Financial Guaranty to meet its obligations under the
Policy. The form of Policy contained in Appendix D 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