Exhibit (10)(i)82)
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NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION
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PARTICIPATION AGREEMENT
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Dated as of December 1, 1998
- relating to -
Pollution Control Refunding Revenue Bonds
(Central ▇▇▇▇▇▇ Gas & Electric Corporation Project), 1998 Series A
TABLE OF CONTENTS
Table of Contents
Page
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; EFFECTIVE DATE AND DURATION OF
PARTICIPATION AGREEMENT
SECTION 1.01. Definitions; Rules of Construction.............................2
SECTION 1.02. Effective Date of Participation Agreement; Duration of
Participation Agreement.......................................2
ARTICLE II
REPRESENTATIONS
SECTION 2.01. Representations and Warranties by the Authority................3
SECTION 2.02. Representations and Warranties by the Company..................3
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ARTICLE III
THE PROJECT; ISSUANCE OF BONDS
SECTION 3.01. The Project....................................................4
SECTION 3.02. Sale of Bonds and Deposit of Proceeds; Liability Under
Bonds.........................................................4
SECTION 3.03. No Interest in Project Conferred...............................5
SECTION 3.04. Operation, Maintenance and Repair..............................5
SECTION 3.05. Agreement not to Exercise Option to Convert to Fixed Rate
Absent Specified Rating.......................................5
SECTION 3.06. Securities Depository..........................................5
SECTION 3.07. Investments Under the Indenture................................5
ARTICLE IV
COMPANY NOTE AND PAYMENTS; CREDIT AND LIQUIDITY SUPPORT
SECTION 4.01. Execution and Delivery of Company Note to Trustee..............6
SECTION 4.02. Redemption of Bonds............................................6
SECTION 4.03. Obligation for Payment Absolute; Deficiencies..................6
SECTION 4.04. Administration Fees; Expenses, Etc.............................6
SECTION 4.05. Compensation of Fiduciaries, Remarketing Agents and
Indexing Agents...............................................7
SECTION 4.06. Project Not Security for Bonds.................................7
SECTION 4.07. Payment of Taxes and Assessments; No Liens or Charges..........7
SECTION 4.08. Indemnification of Authority, Fiduciaries, Remarketing
Agents and Indexing Agents....................................8
SECTION 4.09. Company to Pay Attorneys' Fees and Disbursements...............8
SECTION 4.10. No Abatement of Administration Fees and Other Charges..........8
SECTION 4.11. Payment to Tender Agent........................................9
SECTION 4.12. Support Facilities.............................................9
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ARTICLE V
SPECIAL COVENANTS
SECTION 5.01. No Warranty as to Suitability of Project.......................9
SECTION 5.02. Authority's Rights to Inspect Project and Plans and
Specifications................................................9
SECTION 5.03. Company Consent to Amendment of Indenture......................9
SECTION 5.04. Tax Covenant...................................................9
SECTION 5.05. Company Agrees to Perform Obligations Imposed by
Indenture....................................................10
SECTION 5.06. Maintenance of Office or Agency of Company....................10
SECTION 5.07. Further Assurances............................................10
SECTION 5.08. Payment of Taxes and Other Charges............................10
SECTION 5.09. Maintenance of Properties.....................................10
SECTION 5.10. Insurance.....................................................11
SECTION 5.11. Proper Books of Record and Account............................11
SECTION 5.12. Certificates as to Defaults...................................11
SECTION 5.13. Company Not to Permit Hindrance or Delay of Payment of
Company Note.................................................11
SECTION 5.14. Consolidation, Merger or Sale of Assets.......................11
SECTION 5.15. Financial Statements of Company...............................12
SECTION 5.16. Compliance with Laws..........................................12
ARTICLE VI
DEFAULTS BY COMPANY; REMEDIES
SECTION 6.01. Events of Default; Acceleration...............................13
SECTION 6.02. Certain Events of Default; Authority or Trustee May Take
Certain Actions..............................................14
SECTION 6.03. Judicial Proceedings by Trustee...............................15
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Disposition of Amounts After Payment of Bonds.................15
SECTION 7.02. Notices.......................................................15
SECTION 7.03. Successors and Assigns........................................15
SECTION 7.04. References to the Liquidity Facility..........................16
SECTION 7.05. Amendment of Participation Agreement..........................16
SECTION 7.06. Assignment and Transfer.......................................16
SECTION 7.07. Participation Agreement Supersedes Any Prior Agreements.......17
SECTION 7.08. Counterparts..................................................17
SECTION 7.09. Severability..................................................17
SECTION 7.10. New York Law To Govern........................................17
EXHIBIT A: FORM OF PROMISSORY NOTE.........................................A-1
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This PARTICIPATION AGREEMENT, dated as of December 1, 1998, between NEW
YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, a body corporate and
politic, constituting a public benefit corporation, established and existing
under and by virtue of the laws of the State of New York (the "Authority"), and
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION, a corporation duly organized and
existing and qualified to do business as a public utility under the laws of the
State of New York (the "Company"),
W I T N E S S E T H :
WHEREAS, pursuant to a special act of the Legislature of the State of New
York (Title 9 of Article 8 of the Public Authorities Law of New York, as from
time to time amended and supplemented, herein called the "Act"), the New York
State Energy Research and Development Authority (the "Authority") has been
established as a body corporate and politic, constituting a public benefit
corporation;
WHEREAS, pursuant to the Act, the Authority is empowered to contract with
any power company to participate in the incorporation of features in power
plants and the construction of associated facilities to the extent required by
the public interest in development, health, recreation, safety, conservation of
natural resources, and aesthetics;
WHEREAS, pursuant to the Act, the Authority is also empowered to extend
credit and make loans from bond proceeds to any person for the construction,
acquisition, and installation of, or for the reimbursement to any person for
costs in connection with, any special energy project, including, but not limited
to, any land, works, system, building or other improvement and all real and
personal properties of any nature or any interest in any of them which are
suitable for or related to the furnishing, generation, or production of energy;
WHEREAS, the Authority is also authorized under the Act to borrow money
and issue its negotiable bonds and notes to provide sufficient moneys for
achieving its corporate purposes, including the refunding of outstanding
obligations of the Authority;
WHEREAS, the Authority is also authorized under the Act to enter into any
contracts and to execute all instruments necessary or convenient for the
exercise of its corporate powers and the fulfillment of its corporate purposes;
WHEREAS, the Company is a public utility corporation doing business in the
State of New York and operates power plants in the State of New York;
WHEREAS, the Company has requested that the Authority issue bonds for the
purpose of refunding the Pollution Control Revenue Bonds (Central ▇▇▇▇▇▇ Gas &
Electric Corporation Projects), Series C (the "Prior Bonds"), of the Authority
which were issued to finance a portion of the cost of construction of certain
pollution control and other facilities at Nine Mile Point Nuclear Station Unit
No. 2 generating station located in Oswego, New York;
WHEREAS, the Authority proposes to issue such bonds and make the proceeds
thereof available to the Company to refund the Prior Bonds;
WHEREAS, simultaneously with the issuance and delivery of such bonds, the
Company will deliver a promissory note dated the date of issuance of such bonds
as evidence of its obligation to repay the advance of the proceeds of the bonds;
and
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WHEREAS, the Authority, pursuant to Resolution No. 922, adopted September
28, 1998, has determined to issue its Pollution Control Refunding Revenue Bonds
(Central ▇▇▇▇▇▇ Gas & Electric Corporation Project), 1998 Series A, in an
aggregate principal amount of $16,700,000 (the "Bonds"), for the purpose of
refunding the Prior Bonds, all such Bonds to be issued under and secured by an
Indenture of Trust dated as of December 1, 1998, between the Authority and The
Chase Manhattan Bank, as Trustee (the "Indenture");
NOW, THEREFORE, for and in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, it is hereby agreed by and
between the parties as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; EFFECTIVE DATE
AND DURATION OF PARTICIPATION AGREEMENT
SECTION 1.01. Definitions; Rules of Construction. Unless the context
otherwise indicates, terms defined in the Indenture are used herein as so
defined; and:
(a) Words importing the singular number shall include the plural number and
vice versa;
(b) All references herein to particular articles or sections are references
to articles or sections of this Participation Agreement;
(c) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Participation Agreement nor
shall they affect its meaning, construction or effect;
(d) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any
similar terms, as used in this Participation Agreement, refer to this
Participation Agreement in its entirety and not to the particular article or
section of this Participation Agreement in which they appear, and the term
"hereafter" means after, and the term "heretofore" means before, the effective
date of this Participation Agreement; and
(e) In the event that there is any conflict between the provisions of this
Participation Agreement and those of the Indenture, the provisions of the
Indenture shall govern the disposition of such conflict.
SECTION 1.02. Effective Date of Participation Agreement; Duration of
Participation Agreement. This Participation Agreement shall become effective
upon its execution and delivery, and shall continue in full force and effect
until the principal of, and premium, if any, and interest on, the Company Note
and Bonds have been fully paid (or provision for their payment has been made in
accordance with the provisions of the Indenture) and all sums to which the
Authority or the Fiduciaries are entitled hereunder have been fully paid.
ARTICLE II
REPRESENTATIONS
SECTION 2.01. Representations and Warranties by the Authority. The
Authority represents and warrants as follows:
(a) The Authority is a body corporate and politic, constituting a public
benefit corporation, established and existing under the laws of the State of New
York;
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(b) The Authority has full power and authority to execute and deliver this
Participation Agreement, the Indenture and the Tax Regulatory Agreement and to
consummate the transactions contemplated hereby and thereby and to perform its
obligations hereunder and thereunder;
(c) The Authority is not in default under any of the provisions of the
laws of the State of New York which would affect its existence or its powers
referred to in the preceding paragraph (b);
(d) The Authority has determined that its participation in the financing of
the Project, as contemplated by this Participation Agreement, is in the public
interest;
(e) The Authority has duly authorized the execution and delivery of this
Participation Agreement, the Indenture and the Tax Regulatory Agreement and the
execution and delivery of the other documents incidental to this transaction,
and all necessary authorizations therefor or in connection with the performance
by the Authority of its obligations hereunder or thereunder have been obtained
and are in full force and effect; and
(f) The execution and delivery by the Authority of this Participation
Agreement, the Indenture and the Tax Regulatory Agreement and the consummation
of the transactions herein or therein contemplated will not violate any
indenture, mortgage, loan agreement or other contract or instrument to which the
Authority is a party or by which it is bound or, to the best of the Authority's
knowledge, any judgment, decree, order, statute, rule or regulation applicable
to the Authority.
SECTION 2.02. Representations and Warranties by the Company. The Company
represents and warrants as follows:
(a) The Company is a corporation duly incorporated and in good standing
under the laws of the State of New York, is duly qualified and authorized to
engage in business as a public utility in the State of New York, has power to
enter into, execute and deliver this Participation Agreement, the Tax Regulatory
Agreement and the Company Note by proper corporate action and has duly
authorized the execution and delivery by it of this Participation Agreement, the
Tax Regulatory Agreement and the Company Note;
(b) The execution and delivery by the Company of this Participation
Agreement, the Tax Regulatory Agreement and the Company Note and the
consummation of the transactions herein contemplated do not conflict with or
constitute a breach of or a default under the Company's Certificate of
Incorporation, By-Laws or any indenture, mortgage, loan agreement or other
contract or instrument to which the Company is a party or by which it is bound
or, to the best of the Company's knowledge, any judgment, decree, order,
statute, rule or regulation applicable to the Company;
(c) This Participation Agreement, the Tax Regulatory Agreement and the
Company Note constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as the right of indemnity hereunder may be limited by principles of
public policy and except as enforcement may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other laws, judicial decisions or
principles of equity relating to or
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affecting the enforcement of creditors' rights or contractual obligations
generally (regardless of whether enforceability is considered in a proceeding in
equity or at law);
(d) The issuance and delivery by the Company of the Company Note in the
manner and for the purposes herein set forth have been duly authorized by an
order of the Public Service Commission of the State of New York;
(e) No additional authorizations for or approvals of the execution and
delivery by the Company of this Participation Agreement, the Tax Regulatory
Agreement and the Company Note need be obtained by the Company or if any such
authorization or approval is necessary it has been obtained; and
(f) The representations of the Company set forth in the Tax Regulatory
Agreement are hereby incorporated by reference as though fully set forth herein.
ARTICLE III
THE PROJECT; ISSUANCE OF BONDS
SECTION 3.01. The Project. The Company represents that the Project is
complete. The Project belongs to and is the property of the Company. In order to
effectuate the purposes of this Participation Agreement, the Company will do or
cause to be done all things requisite or proper for the fulfillment of the
obligations of the Company under this Participation Agreement.
SECTION 3.02. Sale of Bonds and Deposit of Proceeds; Liability Under Bonds.
1. In order to refund the Prior Bonds, the Authority, as soon as practicable
after the execution of this Participation Agreement will issue, sell and deliver
the Bonds to the Underwriters thereof, all pursuant to and as provided in the
Bond Purchase Agreement for the Bonds among the Authority, the Company and the
Underwriters and will deposit the proceeds of such sale of the Bonds with the
Trustee in the Proceeds Fund.
2. The Bonds shall not be general obligations of the Authority, and shall
not constitute an indebtedness of, or a charge against the general credit of,
the Authority or give rise to any pecuniary liability of the Authority. The
liability of the Authority under the Bonds shall be enforceable only to the
extent provided in the Indenture, and the Bonds shall be payable solely from the
Company Note Payments, any payments by the Company under Section 4.11, funds
paid under the Support Facilities and any other funds held by the Trustee under
the Indenture or the Tender Agent under the Bond Purchase Trust Agreement and
available for such payment. The Bonds shall not be a debt of the State of New
York, and the State of New York shall not be liable thereon.
SECTION 3.03. No Interest in Project Conferred. Neither the Authority nor
the Trustee shall be entitled to any interest in the Project by reason of the
advance of ▇▇▇▇ proceeds pursuant to this Participation Agreement.
SECTION 3.04. Operation, Maintenance and Repair. The Authority and the
Company recognize that the Project constitutes integrated portions of the
electric energy and production facilities of the Company and its co-tenants and
that it is not feasible to administer the Project separately from such
facilities. The Company shall operate the Project or cause the Project to be
operated (with such changes, improvements or additions as the Company may deem
desirable) as part of such facilities for the joint useful life of the Project
and such facilities, shall maintain and
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repair the Project or cause the Project to be maintained and repaired in
conformity with the Company's and its co-tenants' normal maintenance and repair
programs for such facilities and shall proceed in good faith to maintain the
availability of the Project for use as an authorized project under the Act; but
the Company and its co-tenants shall have no obligation to operate, maintain or
repair or cause to be operated, maintained, or repaired, or proceed in good
faith to maintain the availability of the Project for use as an authorized
project under the Act with respect to, any element or item of the Project the
operation, maintenance, or repair of which becomes uneconomic to the Company
because of damage or destruction or obsolescence (including physical, functional
and economic obsolescence), or change in government standards and regulations,
or the termination of the operation of the portion of such facilities to which
the element or item of the Project is an adjunct, or the sale, transfer or other
disposition by the Company of its interest in such facilities.
SECTION 3.05. Agreement not to Exercise Option to Convert to Fixed Rate
Absent Specified Rating. The Company agrees not to direct that a Fixed Rate
become effective pursuant to Section 4.02 of the Indenture unless the Company
shall have delivered to the Authority evidence satisfactory to the Authority
that upon conversion to a Fixed Rate the Bonds are expected to be rated in at
least the third highest rating category (without regard to gradations therein)
of ▇▇▇▇▇'▇ or S&P, currently "A" in the case of ▇▇▇▇▇'▇ and "A" in the case of
S&P.
SECTION 3.06. Securities Depository. The Company acknowledges that the
Authority and the Trustee, at the request of the Company, have arranged for the
initial deposit of the Bonds with The Depository Trust Company ("DTC") which
will act as Securities Depository in order to effectuate a book-entry-only
system and that this system may be discontinued or, if discontinued,
reinstituted (with DTC or another Securities Depository) in accordance with the
Indenture. The Company agrees to take all actions necessary, and to refrain from
taking actions contrary to the effectuation of a book-entry-only system
established pursuant to the Indenture and any arrangements among the Authority,
the Trustee and any Securities Depository. The Authority shall not enter into
any written agreements with a Securities Depository without receipt and
acceptance of such agreements by the Company.
SECTION 3.07. Investments Under the Indenture. Any money held in any fund
under the Indenture shall be invested and reinvested as provided in the Tax
Regulatory Agreement and Article IX of the Indenture.
ARTICLE IV
COMPANY NOTE AND PAYMENTS; CREDIT AND LIQUIDITY SUPPORT
SECTION 4.01. Execution and Delivery of Company Note to Trustee. 1.
Concurrently with the authentication by the Trustee and delivery by the
Authority of the Bonds and in order to evidence the obligation of the Company to
the Authority to repay the advance of the proceeds of the Bonds, the Authority
hereby directs the Company, and the Company hereby agrees, to execute and
deliver to the Trustee its Company Note and to duly and punctually pay the
principal of, premium, if any, and interest on, the Company Note at the place,
the times and in the manner provided therein. The Company Note shall be
substantially in the form attached hereto as Exhibit A.
2. The obligation of the Company to make any payment of principal of, and
premium, if any, and interest on, the Company Note shall be deemed satisfied and
discharged by
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and to the extent of a corresponding payment made by a Liquidity Provider
(other than as Purchase Price), but not by any payment under the Policy.
SECTION 4.02. Redemption of Bonds. Whenever Bonds are redeemable in whole
or in part, the Authority will redeem the same at the written direction of an
Authorized Corporation Representative given in accordance with Section 5.01 of
the Indenture. Expenses in connection with the redemption of Bonds shall be paid
by the Company.
SECTION 4.03. Obligation for Payment Absolute; Deficiencies. The Company
agrees that its obligation to make the Company Note Payments and payments under
Section 4.11 at the times and in the amounts provided in the Company Note and
this Participation Agreement shall be absolute, irrevocable and unconditional
and shall not be subject to any defense (other than payment) or any right of
set-off, counterclaim or recoupment for any reason, including, without
limitation, the unenforceability (because of judicial decision or otherwise) or
the impossibility of performance of the Company Note obligations, or any breach
by the Authority of any obligation to the Company, whether under this
Participation Agreement or otherwise, or inaccuracy of any representation by the
Authority to the Company under this Participation Agreement or in any other
instrument, or any indebtedness or liability at any time owing to the Company by
the Authority, or the destruction by fire or other casualty of the Project or
any portion thereof, or the taking of title thereto or the use thereof by the
exercise of the power of eminent domain. If for any reason Company Note
Payments, together with other money held by the Trustee and then available for
such purpose (including money paid by a Liquidity Provider other than as
Purchase Price), would not be sufficient to make the corresponding payments of
principal of, and premium, if any, and interest on, the Bonds when such payments
are due, the Company will pay the amounts required from time to time to make up
any such deficiency. If for any reason payments under Section 4.11, together
with other money held by the Trustee and the Tender Agent and then available for
such purpose (including money paid by the Liquidity Provider), would not be
sufficient to make the corresponding payments of the Purchase Price of the Bonds
when such payments are due, the Company will pay the amounts required from time
to time to make up any such deficiency.
SECTION 4.04. Administration Fees; Expenses, Etc. In order to defray a
portion of the expenses incurred by the Authority in conducting and
administering its programs for the acquisition and construction of facilities
for the furnishing of electricity, special energy projects and the development
of advanced technologies, the Company shall pay to the Authority an initial
Administration Fee in the amount of $41,750 on the date of the authentication
and delivery of the Bonds and an annual Administration Fee in the amount of
$2,210 on December 1 of each year commencing December 1, 1999, until the Bonds
are no longer outstanding. In addition, the Company shall pay to the State of
New York with respect to the Bonds a bond issuance charge in the amount of
$46,760 on the date of authentication and delivery of the Bonds.
In addition to such Administration Fees, the Company will pay or reimburse
the Authority upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Authority (including printing costs and the
reasonable fees, expenses and disbursements of its counsel and bond counsel) in
connection with this Participation Agreement, the Indenture, the Tax Regulatory
Agreement or any transaction or event contemplated by this Participation
Agreement, the Tax Regulatory Agreement or the Indenture.
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SECTION 4.05. Compensation of Fiduciaries, Remarketing Agents and Indexing
Agents. The Company agrees:
(1) to pay to the Trustee from time to time upon its request
reasonable compensation for all services rendered by it in any capacity
under the Indenture (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as so otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred by it in any capacity under the Indenture (including
the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as
may be attributable to its negligence or bad faith;
(3) to pay to the Fiduciaries, other than the Trustee, from time to
time upon their request, reasonable compensation for all services rendered
by them under the Indenture and reimburse them for their reasonable
expenses incurred under the Indenture (including reasonable compensation
and expenses and disbursements of their agents and counsel), except any
such expense as may be attributable to their negligence or bad faith; and
(4) to pay to the Remarketing Agents and the Indexing Agents their
reasonable fees and expenses as and when the same become due, except any
such expense as may be attributable to such person's negligence or bad
faith.
SECTION 4.06. Project Not Security for Bonds. It is expressly recognized by
the parties hereto that neither the Project nor any other property of the
Company will constitute any part of the security for the Bonds.
SECTION 4.07. Payment of Taxes and Assessments; No Liens or Charges. The
Company will (a) pay, when the same shall become due, all taxes and assessments,
including income, profits, property or excise taxes, if any, or other municipal
or governmental charges, imposed, levied or assessed by the Federal, state or
any municipal government upon the Authority or any Fiduciary in respect of any
payments (other than payments made pursuant to Sections 4.04 and 4.05) made or
to be made pursuant to this Participation Agreement or the Company Note and (b)
pay or cause to be discharged, within 60 days after the same shall accrue, any
lien or charge upon any such payment made or to be made under this Participation
Agreement, provided that the Company shall not be required to pay any such tax
or assessment so long as (i) the Company at its expense contests, by appropriate
legal proceedings conducted in good faith and with due diligence, the amount,
validity or application of any such tax, assessment or charge, (ii) such
proceedings shall have the effect of suspending the collection thereof from the
Authority or such Fiduciary, and (iii) the Company shall indemnify and hold the
Authority and each Fiduciary harmless from any losses, costs, charges, expenses
(including reasonable attorneys' fees and disbursements), judgments and
liabilities arising in respect of such tax, assessment or charge and the
nonpayment thereof.
SECTION 4.08. Indemnification of Authority, Fiduciaries, Remarketing Agents
and Indexing Agents. Any obligation of the Authority created by or arising out
of this Participation Agreement shall be a limited obligation of the Authority,
payable solely from the Company Note
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Payments, any payments by the Company under Section 4.11, funds paid under
the Support Facilities and any other funds held by the Trustee under the
Indenture and available for such payment, and shall not constitute an
indebtedness of or a charge against the general credit of the Authority and
shall not constitute or give rise to any pecuniary liability of the Authority;
nevertheless, if the Authority shall incur any such pecuniary liability, then in
such event the Company shall indemnify and hold the Authority harmless by reason
thereof. The Company releases the Authority, the Fiduciaries, the Remarketing
Agents and the Indexing Agents from, agrees that the Authority, the Fiduciaries,
the Remarketing Agents and the Indexing Agents shall not be liable for, and
agrees to indemnify and hold the Authority, the Fiduciaries, the Remarketing
Agents and the Indexing Agents harmless from, any liability for any loss or
damage to property or any injury to or death of any person that may be
occasioned by any cause whatsoever arising out of the construction or operation
of the Project. The Company agrees to indemnify and hold the Authority, its
members, officers and employees, the Fiduciaries, the Remarketing Agents and the
Indexing Agents harmless from any losses, costs, charges, expenses (including
reasonable attorneys' fees and disbursements), judgments and liabilities
incurred by it or them, as the case may be, in connection with any claims made,
or any action, suit or proceeding instituted or threatened, in connection with
the transactions contemplated by this Participation Agreement, the Bond Purchase
Trust Agreement, any Remarketing Agreement or the Indenture (i) so long as, in
the case of the Authority, its members, officers and employees, it or they, as
the case may be, have acted in good faith to carry out the transactions
contemplated by this Participation Agreement, the Remarketing Agreement, the
Bond Purchase Trust Agreement and the Indenture and (ii) so long as, in the case
of the Fiduciaries, the Indexing Agents and the Remarketing Agents, it or they
shall not have acted negligently, in bad faith or with willful misconduct in
carrying out the transactions contemplated by this Participation Agreement, the
Remarketing Agreement, the Bond Purchase Trust Agreement and the Indenture.
SECTION 4.09. Company to Pay Attorneys' Fees and Disbursements. If the
Company shall default under any of the provisions of this Participation
Agreement and the Authority or the Trustee or both of them shall employ
attorneys or incur other expenses for the collection of payments due under this
Participation Agreement or for the enforcement of performance or observance of
any obligation or agreement on the part of the Company contained in this
Participation Agreement, the Company will on demand therefor reimburse the
reasonable fees of such attorneys and such other reasonable disbursements so
incurred.
SECTION 4.10. No Abatement of Administration Fees and Other Charges. It is
understood and agreed that, so long as any Bonds are outstanding under the
Indenture, Administration Fees and other charges payable to the Authority
pursuant to this Participation Agreement shall continue to be payable at the
times and in the amounts herein specified, whether or not the Project, or any
portion thereof, shall have been destroyed by fire or other casualty, or title
thereto or the use thereof shall have been taken by the exercise of the power of
eminent domain, and that there shall be no abatement of any such Administration
Fees and other charges by reason thereof.
SECTION 4.11. Payment to Tender Agent. The Company shall timely pay, or
cause to be paid, to the Tender Agent amounts equal to the amounts to be paid
pursuant to Article V of the Indenture in respect of Bonds duly tendered or
deemed tendered for purchase; but the obligation of the Company to make any such
payment shall be deemed satisfied to the extent of any money available pursuant
to a Liquidity Facility or from the proceeds of remarketing.
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SECTION 4.12. Support Facilities. The Company has obtained the Policy and
the Surety Bond. At all times on or prior to the Fixed Rate Conversion Date,
except during any period when all the Bonds then outstanding are held by or for
the account of the Company, a Liquidity Facility meeting the requirements of
this Section 4.12 shall be in effect and, in the event that an Alternate
Liquidity Facility is to replace a Liquidity Facility, the requirements of
Section 6.02 of the Indenture with regard to such Liquidity Facility will be
fulfilled. A Liquidity Facility shall expire no earlier than the earliest of (1)
its stated expiration date, which shall be no earlier than the second business
day after the next succeeding date when Bonds are subject to optional or
mandatory tender for purchase not less than six months from its effective date,
(2) when all available amounts have been drawn, (3) the second business day
following the Fixed Rate Conversion Date, (4) on the effective date of any
Alternate Liquidity Facility that replaces the then effective Liquidity
Facility, (5) the earliest date on which no Bonds are outstanding and (6) twelve
days after the Trustee receives notice from the Liquidity Provider that it is
terminating the Liquidity Facility and directing the Trustee to cause a
mandatory tender and purchase of the Bonds.
ARTICLE V
SPECIAL COVENANTS
SECTION 5.01. No Warranty as to Suitability of Project. The Authority makes
no warranty, either express or implied, with respect to actual or designed
capacity of the Project, as to the suitability of the Project for the purposes
specified in this Participation Agreement, as to the condition of the Project,
or as to the suitability of the Project for the Company's purposes or needs.
SECTION 5.02. Authority's Rights to Inspect Project and Plans and
Specifications. The Authority shall have the right at all reasonable times to
examine and inspect the Project and, to the extent reasonably available, the
plans and specifications therefor and such other information and records
relating to the Project as may be reasonably necessary to establish the
qualification of the Project for financing under the Act and compliance with
this Participation Agreement.
SECTION 5.03. Company Consent to Amendment of Indenture. The Authority
shall not enter into any indenture supplemental to or amendatory of the
Indenture without the prior consent of the Company as evidenced by a certificate
in writing signed by an Authorized Corporation Representative.
SECTION 5.04. Tax Covenant. Notwithstanding any other provision hereof, the
Company covenants and agrees that it will not take or authorize or permit any
action to be taken with respect to the Project, or the proceeds of Bonds,
including any amounts treated as proceeds of the Bonds for any purpose of
Section 103 of the Code, which will result in the loss of the exclusion of
interest on the Bonds from gross income for Federal income tax purposes under
Section 103 of the Code (except for any Bond during any period while any such
Bond is held by a person referred to in Section 147(a) of the Code). This
provision shall control in case of conflict or ambiguity with any other
provision of this Participation Agreement. In furtherance of such covenant and
agreement, the Authority and the Company have entered into the Tax Regulatory
Agreement and the Company hereby agrees to comply with the provisions thereof
insofar as the Tax Regulatory Agreement relates to the Bonds.
9
SECTION 5.05. Company Agrees to Perform Obligations Imposed by Indenture.
The Company agrees to perform such obligations as may be required of it by the
provisions of the Indenture.
SECTION 5.06. Maintenance of Office or Agency of Company. The Company will
at all times keep in Poughkeepsie, New York, or another location in the State of
New York, an office or agency where notices and demands to or upon the Company
with respect to the Company Note and this Participation Agreement may be served,
and will, from time to time, give written notice to the Trustee and the
Authority of the location of such office or agency; and, in case the Company
shall fail so to do, notices may be served and demands may be made at the
principal office of the Trustee.
SECTION 5.07. Further Assurances. Upon request of the Trustee in writing,
the Company will make, execute, acknowledge and deliver, or cause to be made,
executed, acknowledged and delivered, to the Trustee any and all such further
acts, instruments or assurances as may be reasonably required for effectuating
the intention of this Participation Agreement and the Company Note.
SECTION 5.08. Payment of Taxes and Other Charges. The Company will promptly
pay and discharge, or cause to be paid and discharged, as the same become due
and payable, any and all taxes, rates, levies, assessments, and governmental
liens, claims and other charges at any time lawfully imposed or accruing upon or
against the Company or upon or against its properties or any part thereof, or
upon the income derived therefrom or from the operations of the Company,
provided that the Company shall not be required to pay or discharge, or cause to
be paid or discharged, any such obligation, tax, rate, levy, assessment, lien,
claim or other charge so long as in good faith and by appropriate legal
proceedings the validity thereof shall be contested.
SECTION 5.09. Maintenance of Properties. The Company will at all times make
or cause to be made such expenditures for repairs, maintenance and renewals, or
otherwise, as shall be necessary to maintain its properties in good repair,
working order and condition as an operating system or systems to the extent
necessary to meet the Company's obligations under the Public Service Law of the
State of New York and this Participation Agreement; provided, however, that
nothing herein contained shall be construed to prevent the Company from ceasing
to own or operate any of its plants or any other property, if, in the judgment
of the Company, it is advisable not to own or operate the same and the ownership
or operation thereof shall not be essential to the maintenance and continued
operation of the rest of the operating system or systems, and the security under
the Indenture afforded by the Company Note will not be substantially impaired by
the termination of such operation.
SECTION 5.10. Insurance. The Company will keep or cause to be kept such
parts of its properties as, in the opinion of an Authorized Corporation
Representative (who shall for this purpose be a professional experienced in
corporate risk management or a licensed professional engineer), are of an
insurable nature, insured against loss or damage by fire or other casualties,
the risk of which is customarily insured against by companies similarly situated
and operating like properties, to the extent that property of similar character
is customarily insured against by such companies, either (a) by reputable
insurers or (b) in whole or in part in the form of reserves or of one or more
insurance funds created by the Company, whether alone or with other
corporations.
10
SECTION 5.11. Proper Books of Record and Account. The Company will at all
times keep or cause to be kept proper books of record and account, in which
full, true and correct entry will be made of all dealings, business and affairs
of the Company, including proper and complete entries to capital or property
accounts covering property worn out, obsolete, abandoned or sold, all in
accordance with the requirements of any system of accounting or keeping accounts
or the rules, regulations or orders prescribed by a regulatory commission with
jurisdiction over the rates of the Company giving rise to more than 50% of the
Company's gross revenues, or if there are no such requirements or rules,
regulations or orders, then in compliance with generally accepted accounting
principles.
SECTION 5.12. Certificates as to Defaults. The Company shall file with the
Trustee, on or before November 1 of each year, a certificate signed by an
Authorized Corporation Representative stating that, to the best of his
knowledge, information and belief, the Company has kept, observed, performed and
fulfilled each and every one of its covenants and obligations contained in this
Participation Agreement and in the Company Note and, to the best of his
knowledge, information and belief, there does not exist at the date of such
certificate any default by the Company under this Participation Agreement or any
event of default hereunder or other event which, with notice or the lapse of
time specified in Section 6.01, or both, would become an event of default or, if
any such default or event of default or other event shall so exist, specifying
the same and the nature and status thereof.
SECTION 5.13. Company Not to Permit Hindrance or Delay of Payment of
Company Note. The Company will not voluntarily do, suffer or permit any act or
thing intended to hinder or delay the payment of the indebtedness evidenced by
the Company Note.
SECTION 5.14. Consolidation, Merger or Sale of Assets. (a) The Company will
not consolidate with or permit itself to be merged into any individual,
corporation, partnership, joint venture, trust, limited liability company or
corporation, unincorporated organization or government or any political
subdivision thereof, or any department, agency authority or other
instrumentality of any government or political subdivision thereof (each, a
"Person") or Persons or convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets (any such conveyance, transfer,
lease or other disposition, a "Transfer"), except in the manner and upon the
terms and conditions set forth in this Section 5.14.
(b) Nothing contained in this Participation Agreement shall prevent (and
this Participation Agreement shall be construed as permitting and authorizing)
any lawful consolidation or merger of the Company with or into any other Person
lawfully authorized to acquire and operate the properties of the Company, or a
series of consolidations or mergers, or successive consolidations or mergers, in
which the Company or its successor or successors shall be a party, or any
Transfer to a Person lawfully authorized to acquire and operate the same;
provided that upon any consolidation, merger or Transfer, the Person formed by
such consolidation, or into which such merger may be made if other than the
Corporation, or the Person that is a transferee in a Transfer shall execute and
deliver to the Trustee an instrument, in form satisfactory to the Trustee,
whereby such Person shall effectually assume the due and punctual payment of the
principal of, and premium, if any, and interest on, the Company Note according
to its tenor and the due and punctual performance and observance of all
covenants and agreements to be performed by the Company pursuant to this
Participation Agreement, the Tax Regulatory Agreement and the Company Note; and,
thereupon, the Company shall be released
11
from its obligations under this Participation Agreement and under the Tax
Regulatory Agreement and the Company Note.
(c) Every such successor Person (or transferee Person under Section 7.06)
shall possess, and may exercise, from time to time, each and every right and
power of the Company hereunder and under the Note, in its name or otherwise; and
any act, proceeding, resolution or certificate by any of the terms of this
Participation Agreement, the Tax Regulatory Agreement and the Company Note
required or provided to be done, taken and performed or made, executed or
verified by any board or officer of the Company shall and may be done, taken and
performed or made, executed or verified with like force and effect by the
corresponding board or officer of any such successor Person.
(d) If consolidation, merger or sale or other Transfer is made as
permitted by this Section, the provisions of this Section shall continue in full
force and effect and no further consolidation, merger or Transfer shall be made
except in compliance with the provisions of this Section.
SECTION 5.15. Financial Statements of Company. So long as the Company is a
publicly-owned corporation, it shall (a) furnish the Trustee and Ambac with a
copy of its annual report to shareholders for each year, beginning with the year
1998, on or before March 31 of the subsequent year or as soon thereafter as it
is reasonably available, and (b) furnish to the Trustee, to Ambac, and to any
owner of the Bonds if requested in writing by such owner, all financial
statements which it sends to its shareholders generally. While the Municipal
Bond Insurance Policy is in effect, the Company shall furnish to Ambac such
additional information it may reasonably request. To the extent that the Company
has entered into a continuing disclosure undertaking pursuant to Rule 15c2-12
under the Securities Exchange Act as in effect on the date of this Participation
Agreement or any successor thereto (the "Rule") with respect to the Bonds, Ambac
shall be included as party to receive notices of all material events (as
described in paragraph (b)(5)(i)(C) of the Rule).
SECTION 5.16. Compliance with Laws. The Company agrees to use its best
efforts to comply in all material respects with all applicable laws, rules and
regulations and orders of any governmental authority, non-compliance with which
would materially adversely affect the Company's ability to perform its
obligations hereunder or under the Tax Regulatory Agreement or the Company Note,
except laws, rules, regulations or orders being contested in good faith or laws,
rules, regulations or orders for which the Company has applied for variances
from or exceptions to.
ARTICLE VI
DEFAULTS BY COMPANY; REMEDIES
SECTION 6.01. Events of Default; Acceleration. In case one or more of the
following events of default (each, an "event of default") shall have occurred
and be continuing:
(a) failure by the Company to pay when due any amount required to be paid
under this Participation Agreement or the Company Note, which failure causes a
default in the payment when due of the interest on any of the Bonds and
continuance of such default for five Business Days;
12
(b) failure by the Company to pay when due any amount required to be paid
under this Participation Agreement or the Company Note, which failure causes a
default in the payment when due of the principal of, or premium, if any, on any
of the Bonds; provided that, with respect to any payment of principal of, or
premium, if any, payable on Bonds called for redemption, such failure by the
Company shall continue for five Business Days; or
(c) failure by the Company to pay when due any amount required to be
paid under Section 4.11, which failure causes a default in the payment when due
of any amount payable pursuant to Article V of the Indenture;
(d) failure on the part of the Company duly to observe or perform any other
of the covenants or agreements on the part of the Company contained in this
Participation Agreement (other than failure to pay amounts required to be paid
under Sections 4.04, 4.05, 4.07, 4.08, 4.09 or 4.10) or in the Company Note for
a period of 90 days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the Company
by the Authority or the Trustee, provided, however, that, if such failure is
such that it cannot be corrected within such 90-day period, it shall not
constitute an event of default if corrective action is instituted by the
Corporation within such 90-day period and diligently pursued until such failure
is corrected; or
(e) an Act of Bankruptcy relating to the Company;
then, and in any such event, the Trustee with the consent of Ambac, may, and
upon the written request of Ambac or the owners of at least 25% in aggregate
principal amount of the Bonds then outstanding with the consent of Ambac shall,
by notice in writing to the Company and Ambac and provided that the default has
not theretofore been cured, declare the Company Note to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything contained in this Participation Agreement
or in the Company Note to the contrary notwithstanding. Any amounts collected by
the Trustee pursuant to action taken under this Section 6.01 shall be applied in
accordance with the Indenture. In addition, if at any time the principal of the
Bonds shall have been declared to be due and payable by acceleration pursuant to
the terms of the Indenture, the Company Note shall thereupon become and be
immediately due and payable, subject to such declaration with respect to the
Bonds being rescinded or annulled pursuant to the Indenture.
The right or obligation of the Trustee to make any such declaration as
aforesaid, however, is subject to the condition that if, at any time after
declaration, but before all the Bonds shall have matured by their terms, the
principal of, premium, if any, and interest on, the Company Note which shall
have become due and payable otherwise than by such declaration, and all other
sums payable hereunder, except the principal of, and interest on, the Company
Note which shall have become due and payable by such declaration, shall have
been paid or provision satisfactory to the Trustee shall have been made for such
payment, and the reasonable expenses of the Trustee and of the owners of the
Bonds incurred pursuant to the Indenture shall have been paid, including
reasonable attorneys' fees paid or incurred, and all defaults hereunder and
under the Bonds or under the Indenture, except as to the payment of principal
and interest due and payable solely by reason of such declaration, shall be made
good or be secured to the satisfaction of the Trustee or provision deemed by the
Trustee to be adequate shall be made therefor, then and in every such
13
case the owners of a majority in aggregate principal amount of the Bonds then
outstanding, by written notice to the Authority and to the Trustee, may
rescind such declaration and annul such default in its entirety, or, if the
Trustee shall have acted in the absence of a written request of the owners of at
least 25% in aggregate principal amount of the outstanding Bonds, and if there
shall not have been theretofore delivered to the Trustee written direction to
the contrary by the owners of at least 25% in aggregate principal amount of the
outstanding Bonds, then any such declaration shall ipso facto be deemed to be
rescinded and any such default and its consequences shall ipso facto be deemed
to be annulled, but no such rescission and annulment shall extend to or affect
any subsequent default or impair or exhaust any right or power consequent
thereon.
Anything in this Participation Agreement to the contrary notwithstanding,
upon the occurrence and continuance of an event of default as defined herein,
Ambac Assurance (if not in default) shall be entitled to control and direct the
enforcement of all rights and remedies granted to the Bondholders or the Trustee
for the benefit of the Bondholders under this Participation Agreement,
including, without limitation: (i) the right to accelerate the principal of the
Company Note as described in this Participation Agreement, and (ii) the right to
rescind any declaration of acceleration, and Ambac Assurance shall also be
entitled to approve all waivers of events of default.
In case the Trustee shall have proceeded to enforce any right under this
Participation Agreement or the Company Note and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Trustee, then and in every such case the Company, the Authority and the
Trustee shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company, the Authority and
the Trustee shall continue as though no such proceedings had been taken.
In the event of any Act of Bankruptcy, reorganization or liquidation, Ambac
Assurance shall have the right to vote on behalf of all Bondholders absent a
default by Ambac Assurance under the Policy.
SECTION 6.02. Certain Events of Default; Authority or Trustee May Take
Certain Actions. In case the Company shall have failed to comply with its
obligations under Article III or under Sections 4.04, 4.08, 4.09, 4. 10 or 5.16,
which event shall have continued for a period of 90 days after the date on which
written notice of such failure, requiring the Company to remedy the same, shall
have been given to the Company by the Authority or the Trustee, the Authority or
the Trustee may take whatever action at law or in equity as may appear necessary
or desirable to enforce performance or observance of any obligations or
agreements of the Company under said Article or Sections. In case the Company
shall have failed to comply with its obligations under Section 4.05, which event
shall have continued for a period of 90 days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, the Trustee may take whatever action
at law or in equity as may appear necessary or desirable to the Trustee to
enforce performance or observance of any obligations or agreements of the
Company under said Section.
SECTION 6.03. Judicial Proceedings by Trustee. Upon the occurrence and
continuance of an event of default (as defined in Section 6.01) the Trustee may,
and upon the written request of the owners of at least 25 % in aggregate
principal amount of the Bonds then outstanding and receipt by the Trustee of
indemnity satisfactory to it shall, institute any actions or proceedings at law
or in equity for the collection of any amounts then due and unpaid on the
Company Note,
14
and may prosecute any such action or proceeding to judgment or final
decree, and ▇▇▇ collect in the manner provided by law the money adjudged or
decreed to be payable.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Disposition of Amounts After Payment of Bonds. Any amounts
determined by the Trustee to be remaining in the funds created under the
Indenture after payment in full, or provision for payment in full, of principal
of, and premium, if any, and interest on, all of the Bonds, in accordance with
the provisions of the Indenture, and payment of all the fees, charges and
expenses of the Authority, the Fiduciaries, the Remarketing Agents and the
Indexing Agents in accordance with the Indenture and this Participation
Agreement and any amounts required to be paid to the United States of America
pursuant to the Tax Regulatory Agreement, shall belong to and be paid to the
Company.
SECTION 7.02. Notices. All notices, certificates, requests or other
communications between the Authority, the Company and the Trustee required or
permitted to be given under this Participation Agreement or under the Indenture
(except as otherwise provided therein) shall be sufficiently given and shall be
deemed given when delivered or mailed by first class mail, postage prepaid,
addressed as follows: if to the Authority, at Corporate Plaza West, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President; if to
the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Treasurer; if to the Trustee, at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. 10001,
Attention: Global Trust Services; if to the Remarketing Agent, at the address
set forth in the Remarketing Agreement; and if to the Tender Agent or Ambac to
the addresses set forth for such persons in Section 17.09 of the Indenture. A
duplicate copy of each notice, certificate, request or other communication given
hereunder to the Authority, Ambac, the Company or the Trustee shall also be
given to the others. The Company, Ambac, the Authority and the Trustee may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates, requests or other communications shall be
sent.
SECTION 7.03. Successors and Assigns. This Participation Agreement shall
inure to the benefit of and shall be binding upon the Authority, the Company,
the Fiduciaries, all providers of Support Facilities, the Remarketing Agents,
the Indexing Agents and their respective successors and assigns. To the extent
that this Participation Agreement confers upon or gives or grants to Ambac any
right, remedy or claim under or by reason of this Participation Agreement, Ambac
(if not in default under the Policy) is hereby explicitly recognized as being a
third-party beneficiary hereunder and may enforce any such right remedy or claim
conferred, given or granted hereunder. Nothing in this Participation Agreement
expressed or implied is intended or shall be construed to confer upon, or to
give or grant to, any Person, other than the Authority, the Fiduciaries, the
providers of Support Facilities, the Remarketing Agents, the Indexing Agents,
the Company and the Bondholders, any right, remedy or claim under or by reason
of this Participation Agreement or any covenant, condition or stipulation
hereof, and all covenants, stipulations, promises and agreements in this
Participation Agreement contained by and on behalf of the Company shall be for
the sole and exclusive benefit of the Authority, the Fiduciaries, all providers
of Support Facilities, the Remarketing Agents, the Indexing Agents, and the
Bondholders.
15
SECTION 7.04. References to the Liquidity Facility. After establishment of
a Fixed Rate for the Bonds and upon receipt by the Trustee of notice from the
Liquidity Provider that all amounts payable to the Liquidity Provider with
respect to the Liquidity Facility have been received, all references in this
Participation Agreement to the Liquidity Facility or the Liquidity Provider
shall be ineffective.
SECTION 7.05. Amendment of Participation Agreement. This Participation
Agreement may not be amended except by an instrument in writing signed by the
parties hereto and upon compliance with the applicable provisions of Sections
14.06, 14.07 and 14.08 of the Indenture. Subject to the provisions of Section
14.06 of the Indenture, any provision of this Participation Agreement expressly
recognizing or granting rights in or to Ambac Assurance may not be amended in
any manner which affects the rights of Ambac Assurance hereunder without the
prior written consent of Ambac Assurance.
SECTION 7.06. Assignment and Transfer. The Authority shall assign its
rights under and interest in this Participation Agreement (except the rights and
interest of the Authority under Article III and Sections 4.04, 4.08, 4.09, 4.10
and 5.16, clause (a) of this Section 7.06, and insofar as the obligations of the
Company under Section 4.07 relate to taxes and assessments imposed upon the
Authority and not the Fiduciaries, Section 4.07 thereof), subject to the
provisions of this Participation Agreement relating to the amendment thereof, to
the Trustee pursuant to the Indenture, as security for payment of the principal
of, and premium, if any, and interest on, the Bonds. In addition, the Trustee
shall have the same power as the Authority to enforce from time to time the
rights of the Authority set forth in Article III and Section 5.16, subject to
the provisions of this Participation Agreement relating to the amendment hereof.
Except as provided in this Section 7.06, the Authority will not sell, assign,
transfer, convey or otherwise dispose of its interest in this Participation
Agreement during the term of this Participation Agreement.
The Company may convey, transfer, lease or otherwise dispose of the Project
and be released from its obligations under this Participation Agreement, the Tax
Regulatory Agreement and the Company Note, in a transaction not constituting a
Transfer as defined in Section 5.14(a), subject to the following:
(a) The Authority shall have consented to the conveyance, transfer, lease
or other disposition upon receipt of legal opinions and other documents
satisfactory to it under the circumstances.
(b) The Person that is a transferee of the Project shall execute and
deliver to the Trustee an instrument, in form satisfactory to the Trustee,
whereby such Person shall effectually assume the due and punctual payment of the
principal of, and premium, if any, and interest on, the Company Note according
to its tenor and the due and punctual performance and observance of all
covenants and agreements to be performed by the Company pursuant to this
Participation Agreement, the Tax Regulatory Agreement and the Company Note.
(c) If a disposition is made as permitted by this Section, the provisions
of this Section and Section 5.14 shall continue in full force and effect and no
further disposition shall be made except in compliance with the provisions of
this Section or Section 5.14.
16
SECTION 7.07. Participation Agreement Supersedes Any Prior Agreements. This
Participation Agreement and the related documents identified herein supersede
any other prior agreements or understandings, written or oral, between the
parties with respect to the transactions contemplated hereby.
SECTION 7.08. Counterparts. This Participation Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but such counterparts shall together constitute but one and the
same Participation Agreement.
SECTION 7.09. Severability. If any clause, provision or section of this
Participation Agreement is held illegal, invalid or unenforceable by any court
or administrative body, such Participation Agreement shall be construed and
enforced as if such illegal or invalid or unenforceable clause, provision or
section had not been contained in this Participation Agreement. In case any
agreement or obligation contained in this Participation Agreement shall be held
to be in violation of law, then such agreement or obligation shall be deemed to
be the agreement or obligation of the Authority or the Company, as the case may
be, to the full extent permitted by law.
SECTION 7.10. NEW YORK LAW TO GOVERN. THE DOMESTIC LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION OF THIS PARTICIPATION AGREEMENT.
17
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed as of the day and year first written above.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
_____________________
President
(SEAL)
ATTEST:
Vice President and Secretary
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
_______________________
Chief Financial Officer,
Treasurer and Secretary
(SEAL)
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________
Assistant Secretary
18
EXHIBIT A
(To Participation Agreement dated as of
December 1, 1998, between New York
State Energy Research and Development
Authority and Central ▇▇▇▇▇▇ Gas & Electric Corporation)
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION
$16,700,000
PROMISSORY NOTE
FOR
POLLUTION CONTROL REFUNDING REVENUE BONDS
(CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION PROJECT), 1998 SERIES A
Central ▇▇▇▇▇▇ Gas & Electric Corporation (the "Company"), a New York
corporation, for value received, hereby promises to pay, on or before the dates
set forth below, the amounts set forth below, to The Chase Manhattan Bank, New
York, New York, as trustee or its successor or successors as trustee (the
"Trustee") under the Trust Indenture dated as of December 1, 1998, between the
New York State Energy Research and Development Authority (the "Authority"), a
body corporate and politic, constituting a public benefit corporation,
established and existing under and by virtue of the laws of the State of New
York, and the Trustee. Such Trust Indenture, as it may be amended or
supplemented from time to time, is herein called the "Indenture." Unless
otherwise defined herein, the terms used in this promissory note (the " Company
Note ") which are defined in Section 1.01 of the Indenture shall have the
meanings, respectively, herein which such terms are given in said Section 1.01
of the Indenture.
This Company Note is issued pursuant to the Participation Agreement in
order to evidence the obligation of the Company to the Authority to repay the
advance of the proceeds of the Bonds. In accordance with the Participation
Agreement, the Authority has authorized and directed the Company to issue this
Company Note payable to the order of the Trustee as security for the payment of
principal of, premium, if any, and interest on, the Bonds. The rights and
interest of the Authority under the Participation Agreement (except the rights
and interest of the Authority under Article III and Sections 4.04, 4.08, 4.09,
4.10 and 5.16 thereof, clause (a) of Section 7.06, and insofar as the
obligations of the Company under Section 4.07 relate to taxes and assessments
imposed upon the Authority and not the Fiduciaries, Section 4.07 thereof),
subject to the provisions of the Participation Agreement relating to the
amendment thereof, have been assigned to the Trustee pursuant to the Indenture.
In addition, the Authority has granted the Trustee the same power as the
Authority to enforce from time to time the rights of the Authority set forth in
said Article III and Section 5.16, subject to the provisions of the
Participation Agreement relating to the amendment thereof. All of the terms,
conditions and provisions of the
A-1
Participation Agreement are, by this reference thereto, incorporated herein as
part of this Company Note.
This Company Note shall be payable as to principal, premium, if any, and
interest as follows:
(a) On or before each Interest Payment Date, commencing June 1, 1999, a sum
which together with other money then available for such purpose in the Bond Fund
will enable the Trustee to pay the interest on the Bonds coming due on such
date;
(b) On or before any redemption date for the Bonds (other than a redemption
date pursuant to Section 5.06 of the Indenture), a sum which together with other
money then available for such purpose in the Bond Fund will enable the Trustee
to pay the principal of, premium, if any, and interest on the Bonds which are to
be redeemed on such date; and
(c) On or before December 1, 2028, a sum which together with other money
then available for such purpose in the Bond Fund will enable the Trustee to pay
the outstanding principal amount of the Bonds;
provided that, if the Bonds are redeemed pursuant to Section 5.06 of the
Indenture, the amounts that would otherwise have been payable on this Company
Note if not for such redemption, shall continue to be payable at the times and
in the amounts set forth above as if such redemption had not occurred; and
provided further that if the Bonds are redeemed pursuant to Section 5.06 of the
Indenture the Company shall have the right at any time thereafter to prepay this
Company Note by paying the amount due on this Company Note at the time of such
prepayment together with unpaid interest accrued thereon to the date of such
prepayment.
The obligation of the Company to make any payment of principal of, and
premium, if any, and interest on, this Company Note shall be deemed satisfied
and discharged to the extent of the corresponding payment made by a Liquidity
Provider (other than as Purchase Price).
All payments of principal of, and premium, if any, and interest on, this
Company Note shall be made by wire transfer in immediately available funds to
the Trustee at its corporate trust office, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇.
10001, ABA Routing Number: F021000021, to Account No. 323-332749; Attn.:
NYSERDA/Central ▇▇▇▇▇▇ 1998 Series A, or to such different address or account as
the Trustee may from time to time designate, on or before each date on which
such principal, premium, if any, or interest is due 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 has agreed in the Participation Agreement that if for any
reason Company Note Payments, together with other moneys held by the Trustee and
then available for such purpose (including money paid by a Liquidity Provider
(other than as Purchase Price)), would not be sufficient to make the
corresponding payments of principal of, and premium, if any, and
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interest on, the Bonds when such payments are due, the Company will pay the
amounts required from time to time to make up any such deficiency.
In the event that payment has been made in respect of the principal of and
premium, if any, and interest on, all of the Bonds, or provision therefor has
been made in accordance with the Indenture, then this Company Note shall be
deemed paid in full and shall be cancelled and returned to the Company; provided
that this Company Note shall not be deemed paid in full if the Bonds are
redeemed pursuant to Section 5.06 of the Indenture.
No reference herein to the Participation Agreement shall impair the
obligation of the Company to pay the principal of and premium, if any, and
interest on this Company Note at the time and place and in the amounts herein
prescribed, which obligation is absolute, irrevocable and unconditional and is
not subject to any defense (other than payment) or any right of set-off,
counterclaim or recoupment for any reason, including, without limitation, any
breach by the Authority of any obligation to the Company, whether under the
Participation Agreement or otherwise, or inaccuracy of any representation by the
Authority to the Company under the Participation Agreement, or any indebtedness
or liability at any time owing to the Company by the Authority or any failure to
complete the Project or the destruction by fire or other casualty of the Project
or any portion thereof, or the taking of title thereto or the use thereof by the
exercise of the power of eminent domain.
In case of an event of default (as defined in Section 6.01 of the
Participation Agreement), the principal of and interest to the date of payment
of this Company Note may be declared immediately due and payable as provided in
the Participation Agreement. In addition, if at any time the principal of the
Bonds shall have been declared to be due and payable by acceleration pursuant to
the terms of the Indenture, this Company Note shall thereupon become and be
immediately due and payable, subject to such declaration with respect to the
Bonds being annulled pursuant to the Indenture.
This Company Note may not be amended except by an instrument in writing
signed by the Company, by the Authority and by the Trustee, on behalf of the
owners of the Bonds, in the manner and subject to the conditions provided in the
Indenture.
This Company Note may not be transferred by the Trustee except to effect
an assignment to a successor Trustee under the Indenture or pursuant to Section
5.06 of the Indenture.
THIS COMPANY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE DOMESTIC LAW OF THE STATE OF NEW YORK.
Presentment, demand, protest and notice of dishonor are hereby expressly
waived.
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IN WITNESS WHEREOF, the Company has caused this Company Note to be
duly executed and delivered as of December 1, 1998.
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
________________________________
(SEAL) Chief Financial Officer,
Treasurer and Secretary
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________
Assistant Secretary