Exhibit 10.3
THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT
$82,000,000 PROMISSORY NOTE
FOR
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT), 2005 Series A
New York, New York
November 1, 2005
FOR VALUE RECEIVED, The Brooklyn Union Gas Company d/b/a KeySpan Energy
Delivery New York, formerly known as The Brooklyn Union Gas Company, a New York
corporation (the "Company"), promises to pay to the order of Citibank, N.A., as
trustee (the "Trustee") under the hereinafter referred to Indenture, in lawful
money of the United States, the principal sum of $82,000,000 (the "Loan
Amount"), together with: (a) interest thereon at such rate or rates as in the
aggregate will produce an amount equal to the total of all interest becoming due
and payable on $82,000,000 principal amount of the New York State Energy
Research and Development Authority's Gas Facilities Revenue Bonds (The Brooklyn
Union Gas Company d/b/a KeySpan Energy Delivery New York Project), 2005 Series
A, dated as of November 1, 2005 (the "Bonds"), issued pursuant to an Indenture
of Trust (the "Indenture") dated as of November 1, 2005, between the New York
State Energy Research and Development Authority (the "Authority") and the
Trustee; and (b) such redemption premiums and other amounts as are required to
be paid by the Company to the Authority as part of the payments provided in the
Participation Agreement dated as of November 1, 2005, between the Company and
the Authority (the "Participation Agreement"). The terms and provisions of the
Participation Agreement are incorporated herein by reference and made a part
hereof. The foregoing amounts shall be paid in installments and in the amounts
which shall be due and payable as provided below. Except as otherwise defined
herein, all capitalized words and terms used herein have the same meanings as in
the Indenture of Trust relating to the Bonds, dated as of November 1, 2005,
between the Authority and the Trustee.
The Company shall make Company Obligation Payments to the Trustee in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts. The Company shall
make payment to the Trustee (i) no later than 12:00 noon (New York City time) on
each Interest Payment Date into the Bond Fund for credit to the Interest Account
established pursuant to Section 6.02 of the Indenture the amount required for
the payment of the interest payable on the Outstanding Bonds on such Interest
Payment Date; and (ii) the last Business Day prior to the day on which any
redemption is to occur or on the last Business Day prior to the Stated Maturity,
into the Bond Fund for credit to the Redemption Account or the Principal Account
established pursuant to Section 6.02 of the Indenture, as directed by the
Company, the amount required to pay principal of and premium, if any, and
accrued interest on any Bonds called for redemption or at the Stated Maturity,
the amount required to pay the principal of the Bonds.
In addition, the Company shall pay an additional amount to the Trustee for
deposit in the Bond Fund and credit to the Principal Account, Interest Account,
Redemption Account or to be applied to the payment of the principal of and
premium, if any, and interest payable upon redemption of any Bond pursuant to
Article IX of the Indenture.
The payment obligations of the Company under this Company Obligation (as
defined in the Indenture) shall be deemed to be discharged and this note shall
be cancelled in the event that the Bonds shall have been accelerated under the
Indenture and the Company shall have paid or caused to be paid all amounts
required under the Participation Agreement to be paid upon the occurrence of
such acceleration.
In the event the Company should fail to make any of the payments required
by this note or the Participation Agreement to be made to the Authority, the
item or installment so in default shall continue as an obligation of the Company
until the amount in default shall have been fully paid, and the Company agrees
to pay the same with interest thereon at the rate of interest borne by the
Bonds, to the extent, but not exceeding the maximum rate, permitted by law,
until paid; provided, however, that if such failure to pay results in a payment
of principal of, or premium, if any, or interest on the Bonds not being made
when due and payable, the Company shall pay the same with interest thereon,
which interest shall also constitute an obligation of the Company at the same
rate of interest per annum as that payable on the Bonds.
This note shall finally mature on February 1, 2024. The Company shall not
prepay this note or any portion thereof except as necessary in connection with
the redemption prior to maturity of all or a portion of the Bonds, or upon
acceleration of maturity of the Bonds or pursuant to Article XVI of the
Indenture.
If the Company should default in the payment of any installment of
principal of, premium, if any, and interest due under this note or if any one or
more of the events of default specified in the Participation Agreement should
occur, and if any such default is not remedied as provided in the Participation
Agreement, the Authority or the Trustee then, or at any time thereafter, may
give notice to the Company declaring all unpaid amounts of this note then
outstanding, together with all other unpaid amounts outstanding under the
Participation Agreement, to be immediately due and payable, and thereupon,
without further notice or demand, all such amounts shall become and be
immediately due and payable. Any failure to exercise this option shall not
constitute a waiver of the right to exercise the same at any time in the event
of any continuing or subsequent default. In the event of default in the payment
of this note, the undersigned hereby agrees to pay all costs incurred in
connection with the collection of the amounts then due hereon, including
reasonable attorneys' fees. The payments hereunder shall be payable at the
applicable Principal Corporate Trust Office of the Trustee in New York, New
York.
The Company agrees that its obligation to make the Company Obligation
Payments at the times and in the amounts provided in the Company Obligation and
to make all other payments provided for in the Participation Agreement shall be
absolute, irrevocable and unconditional and shall not be subject to any defense
(other than payment) or any rights of setoff, recoupment, abatement,
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counterclaim or deduction and without any rights of suspension, deferment,
diminution or reduction it might otherwise have against the Authority or Trustee
or the owner of any Bond.
The Company hereby waives presentment for payment, demand, demand and
protest and notice of protest, demand and dishonor and nonpayment of this note.
This note and all instruments securing the same are to be construed
according to the law of the State of New York.
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IN WITNESS WHEREOF, the Company has caused this Company Obligation to be
duly executed and delivered as of November 1, 2005.
THE BROOKLYN UNION GAS COMPANY d/b/a
KEYSPAN ENERGY DELIVERY NEW YORK
(SEAL)
By:_________________________________
ATTEST:
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