File No. 70-8451
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
Form U-1
APPLICATION/DECLARATION WITH RESPECT TO THE ORGANIZATION
OF LIMITED PARTNERSHIPS, THE ISSUANCE OF PREFERRED
LIMITED PARTNERSHIP INTERESTS AND SUBORDINATED
DEBENTURES, AND RELATED TRANSACTIONS
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
THE CONNECTICUT LIGHT AND POWER COMPANY
Selden Street
Berlin, Connecticut 06037
WESTERN MASSACHUSETTS ELECTRIC COMPANY
174 Brush Hill Avenue
West Springfield, Massachusetts 01089
(Name of companies filing this statement and address of principal
executive office)
NORTHEAST UTILITIES
(Name of top registered holding company parent of declarant)
Robert P. Wax, Esq.
Vice President, Secretary and General Counsel
Northeast Utilities Service Company
P.O. Box 270
Hartford, CT 06141-0270
(Name and address of agent for service)
The Commission is requested to mail signed copies of all orders,
notices, and communications to
John B. Keane, Esq. Jeffrey C. Miller, Esq.
Vice President and Treasurer Assistant General Counsel
Northeast Utilities Service Northeast Utilities Service
Company Company
P.O. Box 270 P.O. Box 270
Hartford, CT 06141-0270 Hartford, CT 06141-0270
Richard J. Wasserman, Esq.
Day, Berry & Howard
CityPlace
Hartford, CT 06103-3499
<PAGE>
I. The Application/Declaration in this proceeding is amended by
adding the following at the end of subparagraph (i) of Paragraph 24:
As of September 30, 1994, NU's aggregate investment in EWGs and
FUCOs was $5,647,000, which amount equaled 0.6% of the NU
system's consolidated retained earnings of $937,198,000 as of
such date.
II. The following exhibits are filed herewith (exhibit numbers
correspond to those contained in the Application/Declaration):
A.1 Draft of Amended and Restated Limited Partnership Agreement of
CL&P's Issuing Partnership, including a draft of the related form of
preferred limited partnership units.
A.2 Draft of Amended and Restated Limited Partnership Agreement of
WMECO's Issuing Partnership, including a draft of the related form of
preferred limited partnership units.
B.1 Draft of the CL&P Indenture, including a draft of the related
form of Subordinated Debenture.
B.2 Draft of the WMECO Indenture, including a draft of the related
form of Subordinated Debenture.
B.3 Draft of CL&P Guaranty.
B.4 Draft of WMECO Guaranty.
B.5 Draft of CL&P Underwriting Agreement.
B.6 Draft of WMECO Underwriting Agreement.
D.1 Application to the CDPUC for approval of CL&P's proposed
transactions.
D.2 Copy of the Order of the CDPUC with respect to CL&P's proposed
transactions.
F.1 Opinion of Counsel to CL&P.
F.2 Opinion of Counsel to WMECO (included with Exhibit F.1).
H.1 Estimated Expenses--CL&P.
H.2 Estimated Expenses--WMECO.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, as amended, the undersigned applicants each has duly caused
this Amendment No. 1 to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: December 6, 1994
THE CONNECTICUT LIGHT AND POWER COMPANY
By/s/Richard J. Wasserman
Richard J. Wasserman
Day, Berry & Howard
CityPlace I
Hartford, Connecticut 06103-3499
Its Attorneys
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By/s/Richard J. Wasserman
Richard J. Wasserman
Day, Berry & Howard
CityPlace I
Hartford, Connecticut 06103-3499
Its Attorneys
<PAGE>
File No. 70-8451
INDEX TO EXHIBITS FILED WITH
FORM U-1
of
THE CONNECTICUT LIGHT AND POWER COMPANY
and
WESTERN MASSACHUSETTS ELECTRIC COMPANY
A.1 Draft of Amended and Restated Limited Partnership Agreement of
CL&P's Issuing Partnership, including a draft of the related form of
preferred limited partnership units.
A.2 Draft of Amended and Restated Limited Partnership Agreement of
WMECO's Issuing Partnership, including a draft of the related form of
preferred limited partnership units.
B.1 Draft of the CL&P Indenture, including a draft of the related
form of Subordinated Debenture.
B.2 Draft of the WMECO Indenture, including a draft of the related
form of Subordinated Debenture.
B.3 Draft of CL&P Guaranty.
B.4 Draft of WMECO Guaranty.
B.5 Draft of CL&P Underwriting Agreement.
B.6 Draft of WMECO Underwriting Agreement.
D.1 Application to the CDPUC for approval of CL&P's proposed
transactions.
D.2 Copy of the Order of the CDPUC with respect to CL&P's proposed
transactions.
F.1 Opinion of Counsel to CL&P.
F.2 Opinion of Counsel to WMECO (included with Exhibit F.1).
H.1 Estimated Expenses--CL&P.
H.2 Estimated Expenses--WMECO.
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit A.1
_________________________________________________________________
_________________________________________________________________
__________________________________________
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
CL&P CAPITAL, L.P.
Dated as of ________ __, 199__
__________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - CONTINUATION; NAME; PURPOSES; TERM; ETC. . . . . . . . . . . . 6
Section 2.01. Formation . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02. Name, Place of Business and Registered Agent . . . . . 6
Section 2.03. Purposes . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.04. Term . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.05. Qualification in Other Jurisdictions . . . . . . . . . 6
Section 2.06. Admission of Preferred Partners . . . . . . . . . . . . 7
Section 2.07. Records . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.08. Withdrawal of Class A Limited Partner . . . . . . . . . 7
ARTICLE III - CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 7
Section 3.01. Capital Contributions . . . . . . . . . . . . . . . . . 7
Section 3.02. Additional Capital Contributions . . . . . . . . . . . 7
Section 3.03. No Interest or Withdrawals . . . . . . . . . . . . . . 7
Section 3.04. Minimum Capital Account Balance of General Partner . . 7
Section 3.05. Partnership Interests . . . . . . . . . . . . . . . . . 8
Section 3.06. Interests . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV - CAPITAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.01. Capital Accounts . . . . . . . . . . . . . . . . . . . 8
Section 4.02. Compliance with Treasury Regulations . . . . . . . . . 8
ARTICLE V - ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.01. Profits and Losses . . . . . . . . . . . . . . . . . . 8
Section 5.02. Allocation Rules . . . . . . . . . . . . . . . . . . . 9
Section 5.03. Adjustments to Reflect Changes in Interests . . . . . . 9
Section 5.04. Tax Allocations . . . . . . . . . . . . . . . . . . . . 9
Section 5.05. Qualified Income Offset . . . . . . . . . . . . . . . . 9
Section 5.07. Minimum Allocations to General Partner . . . . . . . . 10
Section 5.08. Taxpayer Information . . . . . . . . . . . . . . . . . 10
ARTICLE VI - DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.01. Distributions . . . . . . . . . . . . . . . . . . . . . 10
Section 6.02. Certain Distributions Prohibited . . . . . . . . . . . 10
ARTICLE VII - ACCOUNTING MATTERS; BANKING . . . . . . . . . . . . . . . . . 11
Section 7.01. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.02. Certain Accounting Matters . . . . . . . . . . . . . . 11
Section 7.03. Banking . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.04. Right to Rely on Authority of General Partner . . . . . 12
Section 7.05. Tax Matters Partner . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII - MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.01. Management . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.02. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . 13
Section 8.03. Specific Obligations of the General Partner . . . . . . 14
Section 8.04. Powers of the General Partner . . . . . . . . . . . . . 14
Section 8.05. Independent Affairs . . . . . . . . . . . . . . . . . . 15
Section 8.06. Meetings of the Partners . . . . . . . . . . . . . . . 15
Section 8.07. Net Worth of the General Partner . . . . . . . . . . . 16
<PAGE>
Section 8.08. Restrictions on General Partner . . . . . . . . . . . . 16
ARTICLE IX - LIABILITY AND INDEMNIFICATION . . . . . . . . . . . . . . . . 17
Section 9.01. Partnership Expenses and Liabilities . . . . . . . . . 17
Section 9.02. No Liability . . . . . . . . . . . . . . . . . . . . . 17
Section 9.03. Indemnification . . . . . . . . . . . . . . . . . . . . 17
ARTICLE X - WITHDRAWAL; TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . 18
Section 10.01. Transfer by General Partner; Admission of Substituted
General Partner . . . . . . . . . . . . . . . . . . . . 18
Section 10.02. Withdrawal of Limited Partners . . . . . . . . . . . . 18
ARTICLE XI - DISSOLUTION OF THE PARTNERSHIP . . . . . . . . . . . . . . . . 19
Section 11.01. No Dissolution . . . . . . . . . . . . . . . . . . . . 19
Section 11.02. Events Causing Dissolution . . . . . . . . . . . . . . 19
Section 11.03. Notice of Dissolution . . . . . . . . . . . . . . . . . 19
ARTICLE XII - LIQUIDATION OF PARTNERSHIP INTERESTS . . . . . . . . . . . . 20
Section 12.01. Liquidation . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.02. Termination . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.03. Duty of Care . . . . . . . . . . . . . . . . . . . . . 20
Section 12.04. No Liability for Return of Capital . . . . . . . . . . 20
ARTICLE XIII - PREFERRED PARTNER INTERESTS . . . . . . . . . . . . . . . . 21
Section 13.01. Preferred Partner Interests. . . . . . . . . . . . . . 21
Section 13.02. Terms of All Preferred Partner Interests . . . . . . . 23
ARTICLE XIV - TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 14.01. Transfers of Preferred Partner Interests . . . . . . . 28
Section 14.02. Transfer of Certificates . . . . . . . . . . . . . . . 28
Section 14.03. Persons Deemed Preferred Partners . . . . . . . . . . . 29
Section 14.04. Book Entry Interests . . . . . . . . . . . . . . . . . 29
Section 14.05. Notices to Clearing Agency . . . . . . . . . . . . . . 30
Section 14.06. Definitive Certificates . . . . . . . . . . . . . . . . 30
ARTICLE XV - GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 15.01. Power of Attorney . . . . . . . . . . . . . . . . . . . 31
Section 15.02. Waiver of Partition . . . . . . . . . . . . . . . . . . 31
Section 15.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 15.04. Entire Agreement . . . . . . . . . . . . . . . . . . . 32
Section 15.05. Waivers . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.06. Headings . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.07. Separability . . . . . . . . . . . . . . . . . . . . . 32
Section 15.08. Contract Construction . . . . . . . . . . . . . . . . . 32
Section 15.09. Counterparts . . . . . . . . . . . . . . . . . . . . . 32
Section 15.10. Benefit . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.11. Further Actions . . . . . . . . . . . . . . . . . . . . 33
Section 15.12. Governing Law . . . . . . . . . . . . . . . . . . . . . 33
Section 15.13. Amendments . . . . . . . . . . . . . . . . . . . . . . 33
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibit A Form of Certificate
<PAGE>
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
CL&P CAPITAL, L.P.
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of
_________, 199__, of CL&P Capital, L.P., a Delaware limited partnership (the
"Partnership"), is made by and among The Connecticut Light and Power Company
("CL&P"), as general partner of the Partnership, Northeast Utilities Service
Company ("NUSCO") as Class A Limited Partner, and the Persons (as defined
below) who become limited partners of the Partnership in accordance with the
provisions hereof.
WHEREAS, CL&P and NUSCO have heretofore formed a limited partnership
pursuant to the Delaware Act (as defined below) by filing a Certificate of
Limited Partnership (as defined below) with the Secretary of State of the State
of Delaware on __________ __, 199__, and entering into a Limited Partnership
Agreement of the Partnership dated as of__________ __, 199__ (the "Limited
Partnership Agreement");
WHEREAS, the parties hereto desire to continue the Partnership as a
limited partnership under the Delaware Act and to amend and restate the Limited
Partnership Agreement in its entirety.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree to amend and restate the Limited Partnership Agreement in its entirety as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, each of the following terms shall have the
meaning set forth below (such meaning to be equally applicable to both singular
and plural forms of the terms so defined).
"Action" shall have the meaning set forth in Section 13.01(b).
"Affiliate" shall mean, with respect to the Person to which it refers, a
Person that directly or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, such subject Person.
"Agreement" shall mean this Amended and Restated Limited Partnership
Agreement, as amended, modified, supplemented, or restated from time to time,
including, without limitation, by any Action establishing a series of Preferred
Partner Interests.
"Book Entry Interests" shall mean a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 14.04.
"Business Day" shall mean any day that is not a Saturday, a Sunday, or a
day on which banking institutions in The City of New York, the State of
Connecticut, or the State of Delaware are authorized or required to close.
<PAGE>
"Capital Account" shall have the meaning set forth in Section 4.01.
"Certificate" shall mean a certificate substantially in the form attached
hereto as Exhibit A, evidencing a Preferred Partner Interest.
"Certificate of Limited Partnership" shall mean the Certificate of Limited
Partnership of the Partnership and any and all amendments thereto and
restatements thereof filed with the Secretary of State of the State of
Delaware.
"Change in 1940 Act Law" shall mean the occurrence of a change, effective
on or after the date of issuance of one or more series of Preferred Partner
Interests, in law or regulation or a change in official interpretation of law
or regulation by any legislative body, court, governmental agency, or
regulatory authority to the effect that the Partnership is or will be
considered an "investment company" which is required to be registered under the
1940 Act.
"Class A Limited Partner" shall mean NUSCO, in its capacity as a limited
partner of the Partnership.
"Clearing Agency" shall mean an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker dealer, bank, other
financial institution, or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"CL&P" shall mean The Connecticut Light and Power Company and its
successors.
"Code" shall mean the United States Internal Revenue Code of 1986 and
(unless the context requires otherwise) the rules and regulations promulgated
thereunder, as amended from time to time.
"Commission" shall mean the Securities and Exchange Commission.
"Covered Person" shall mean any Partner, the Special Representative, or
any Affiliate thereof, or any officers, directors, shareholders, partners,
members, employees, representatives or agents of a Partner, the Special
Representative or their respective Affiliates, or any employee or agent of the
Partnership or its Affiliates.
"Definitive Certificate" shall have the meaning set forth in Section
14.04.
"Delaware Act" shall mean the Delaware Revised Uniform Limited Partnership
Act, 6 Del.C. Section 17-101, et seq. as amended from time to time or any
successor statute thereto.
"Economic Risk of Loss" shall mean the "economic risk of loss" that any
Partner is treated as bearing under Treasury Regulation Section 1.752-2 with
respect to any Partnership liability.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
<PAGE>
"Fiscal Year" shall have the meaning set forth in Section 7.01.
"General Partner" shall mean CL&P, in its capacity as general partner of
the Partnership, together with any successor thereto that becomes a general
partner of the Partnership pursuant to the terms of this Agreement.
"Guaranty" shall mean the Payment and Guaranty Agreement dated as of
______, 199__, as amended or supplemented from time to time, of CL&P.
"Indemnified Person" shall mean the General Partner or the Special
Representative, any Affiliate thereof, or any officers, directors,
shareholders, partners, members, employees, representatives, or agents thereof,
or any employee or agent of the Partnership or its Affiliates.
"Indenture" shall mean the Indenture dated as of __________, 199__, as
amended or supplemented from time to time, between CL&P and Bankers Trust
Company, as Trustee, and any supplemental Indentures thereto entered into by
CL&P pursuant to which Subordinated Debentures of CL&P are to be issued.
"Interest" shall mean the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement.
"Investment Company Act Event" shall mean, with respect to any series of
Preferred Partner Interests, the occurrence of a Change in 1940 Act Law without
the Partnership having received, within 45 days after such Change in 1940 Act
Law, an opinion of counsel (which may be regular counsel to CL&P or an
Affiliate, but not an employee thereof) experienced in such matters, to the
effect that CL&P and/or the Partnership has taken reasonable measures within
its discretion to avoid such Change in 1940 Act Law so that notwithstanding
such Change in 1940 Act Law, the Partnership is not required to be registered
as an "investment company" within the meaning of the 1940 Act.
"Limited Partners" shall mean the Class A Limited Partner, if any, and the
Preferred Partners.
"Liquidating Distributions" shall mean distributions of Partnership
property made upon a liquidation and dissolution of the Partnership as provided
in Article XII.
"Liquidating Trustee" shall have the meaning set forth in Section 12.01.
"Liquidation Distribution" shall mean the liquidation preference of each
series of Preferred Partner Interests as set forth in the Action for such
series.
"Loss Items" shall mean, with respect to any fiscal period, items of gross
Partnership loss, deduction, or expense for such period.
<PAGE>
"Net Income" or "Net Loss" shall mean, with respect to any Fiscal Year,
the sum of the Partnership's (a) net gain or loss from the sale or exchange of
the Partnership's capital assets during such Fiscal Year, and (b) all other
items of income, gain, loss, deduction, and expense for such Fiscal Year that
are not included in (a). For purposes of determining the Capital Accounts as
set forth in Article IV, "Net Income" and "Net Loss" shall be computed in the
same manner as the Partnership computes its income for United States federal
income tax purposes, except that adjustments shall be made in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv), which adjustments shall include
any income which is exempt from United States federal income tax, all
Partnership losses and all expenses properly chargeable to the Partnership,
whether deductible or non-deductible and whether described in Section
705(a)(2)(B) of the Code, treated as so described pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), or otherwise, and a distribution in
kind of Partnership property shall be treated as a taxable disposition of such
property for its fair market value (taking into account Section 7701(g) of the
Code) on the date of distribution.
"1940 Act" shall mean the Investment Company Act of 1940, as amended.
"NUSCO" shall mean Northeast Utilities Service Company and its successors.
"Notice of Redemption" shall have the meaning set forth in Section
13.02(b)(i).
"Partners" shall mean the General Partner and the Limited Partners.
"Partnership" shall mean CL&P Capital, L.P., a limited partnership formed
under the laws of the State of Delaware.
"Person" shall mean any individual, general partnership, limited
partnership, corporation, limited liability company, joint venture, trust,
business trust, cooperative, or association, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such Person
where the context so admits.
"Preferred Partner" shall mean a limited partner of the Partnership who
holds one or more Preferred Partner Interests.
"Preferred Partner Distribution" shall have the meaning set forth in
Section 13.02(a)(1).
"Preferred Partner Interest Owner" shall mean, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Partner Interests" shall mean the Interests described in
Article XIII.
"Purchase Price" shall mean the amount paid to the Partnership for each
Preferred Partner Interest.
"Redemption Price" shall have the meaning set forth in Section
13.01(b)(v).
<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Special Representative" shall have the meaning set forth in Section
13.02(d).
"Subordinated Debentures" shall mean the Junior Subordinated Deferrable
Interest Debentures of CL&P issued under the Indenture.
"Successor Securities" shall have the meaning set forth in Section
13.02(e).
"Tax Event" shall mean, with respect to any series of Preferred Partner
Interests, that the Partnership shall have received an opinion of counsel
(which may be regular tax counsel to CL&P or an Affiliate, but not an employee
thereof) experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such interpretation or pronouncement is announced on or after the
date of issuance of such series of Preferred Partner Interests, there is more
than an insubstantial risk that (1) the Partnership is subject to United States
federal income tax with respect to interest received on the related
Subordinated Debentures or the Partnership will otherwise not be taxed as a
Partnership or (2) interest payable by CL&P to the Partnership on the related
Subordinated Debentures is not deductible for United States federal income tax
purposes or (3) the Partnership is subject to more than a de minimis amount of
other taxes, duties, or other governmental charges.
"Tax Matters Partner" shall have the meaning set forth in Section 7.05.
"Transfer" shall mean any transfer, sale, assignment, gift, pledge,
hypothecation, or other disposition or encumbrance of an interest in the
Partnership.
"Treasury Regulations" shall mean the final and temporary income tax
regulations, as well as the procedural and administrative regulations,
promulgated by the United States Department of the Treasury under the Code, as
amended from time to time.
"Trustee" shall mean Bankers Trust Company, or any successor Trustee under
the Indenture.
"Underwriting Agreement" shall mean the Underwriting Agreement dated
_____________, 199__, among the Partnership, CL&P and the underwriters named
therein with regard to the sale of Preferred Partner Interests and related
securities and any additional Underwriting Agreements entered into by the
Partnership and CL&P with regard to the sale of additional Preferred Partner
Interests and related securities.
<PAGE>
ARTICLE II
CONTINUATION; NAME; PURPOSES; TERM; ETC.
Section 2.01. Formation. The parties hereto hereby join together to
continue a limited partnership which shall exist under and be governed by the
Delaware Act. The Partnership shall make any and all filings or disclosures
required under the laws of Delaware or otherwise with respect to its
continuation as a limited partnership, its use of a fictitious name, or
otherwise as may be required. The Partnership shall be a limited partnership
among the Partners solely for the purposes specified in Section 2.03 hereof,
and this Agreement shall not be deemed to create a partnership among the
Partners with respect to any activities whatsoever other than the activities
within the business purposes of the Partnership as specified in Section 2.03.
No Partner shall have any power to bind any other Partner with respect to any
matter except as specifically provided in this Agreement. No Partner shall be
responsible or liable for any indebtedness or obligation of any other Partner
incurred either before or after the execution of this Agreement. The assets of
the Partnership shall be owned by the Partnership as an entity, and no Partner
individually shall own any direct interest in the assets of the Partnership.
Section 2.02. Name, Place of Business and Registered Agent. The name of
the Partnership is "CL&P Capital, L.P." The principal place of business of the
Partnership shall be Berlin, Connecticut or at such other place as may be
selected by the General Partner in its sole discretion. The name and address
of the agent for service of process for the Partnership is:
Corporation Service Company
1013 Centre Road
Wilmington, DE 19805
Section 2.03. Purposes. The sole purposes of the Partnership are to
issue and sell Interests in the Partnership, including, without limitation,
Preferred Partner Interests, and to use the proceeds of all sales of Interests
in the Partnership (as well as all or a portion of the capital contributions to
the Partnership) to purchase Subordinated Debentures issued by CL&P pursuant to
the Indenture and to effect other similar arrangements permitted by this
Agreement, and to engage in any and all activities necessary, convenient,
advisable, or incidental thereto. The Partnership shall not borrow money or
issue debt or mortgage or pledge any of its assets.
Section 2.04. Term. The Partnership was formed on November __, 1994 and
shall continue without dissolution through November __, 2093, unless sooner
dissolved as provided in Article XI hereof.
Section 2.05. Qualification in Other Jurisdictions. The General Partner
shall cause the Partnership to be qualified, formed, or registered under
assumed or fictitious name statutes or similar laws in any jurisdiction in
which the Partnership transacts business. The General Partner shall execute,
deliver and file any certificates (and any amendments and/or restatements
thereof) necessary for the Partnership to qualify to do business in any
jurisdiction in which the Partnership may wish to conduct business.
Section 2.06. Admission of Preferred Partners. Upon receipt by a Person
of a Certificate and payment for the Preferred Partner Interest being acquired
by such Person, which shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect its admission as a
<PAGE>
Preferred Partner, such Person shall be admitted to the Partnership as a
Preferred Partner and shall become bound by this Agreement without execution of
this Agreement.
Section 2.07. Records. The name and mailing address of, and the amount
contributed to the capital of the Partnership by, each Partner shall be listed
on the books and records of the Partnership. The Partnership shall keep such
other records as are required by Section 17-305 of the Delaware Act. The
General Partner shall update the books and records from time to time as
necessary to accurately reflect the information therein.
Section 2.08. Withdrawal of Class A Limited Partner. Upon the admission
of at least one Preferred Partner as a limited partner of the Partnership, the
Class A Limited Partner shall be deemed to have withdrawn from the Partnership
as a limited partner of the Partnership, and upon such withdrawal, the Class A
Limited Partner shall have its capital contribution returned to it without any
interest or deduction and shall have no further interest in the Partnership.
ARTICLE III
CAPITAL CONTRIBUTIONS
Section 3.01. Capital Contributions. As of the date of this Agreement,
the General Partner has contributed the amount of [*** $___________ ***] to the
capital of the Partnership and shall make any further contributions required to
satisfy its obligations under Section 3.04. Each Preferred Partner, or its
predecessor in interest, will contribute to the capital of the Partnership the
amount of the Purchase Price for the Preferred Partner Interests held by it.
Section 3.02. Additional Capital Contributions. No Partner shall be
required to make any additional contributions or advances to the Partnership
except as provided in Section 3.04 or by law. The General Partner may make
additional capital contributions in excess of the amounts required under this
Agreement at any time.
Section 3.03. No Interest or Withdrawals. No interest shall accrue on
any capital contribution made by a Partner, and no Partner shall have the right
to withdraw or to be repaid any portions of its capital contributions so made,
except as specifically provided in this Agreement.
Section 3.04. Minimum Capital Account Balance of General Partner. At all
times throughout the term of the Partnership, the General Partner shall
maintain a Capital Account balance equal to at least 3% of the total positive
Capital Account balances for the Partnership. If necessary, the General
Partner shall immediately make additional contributions to satisfy those
requirements, which shall constitute additional capital contributions made by
the General Partner.
Section 3.05. Partnership Interests. Unless otherwise provided herein,
the percentage interests of the Partners shall be as determined in proportion
to the capital contributions of the Partners.
Section 3.06. Interests. Each Partner's respective Preferred Partner
Interests shall be set forth on the books and records of the Partnership. Each
Partner hereby agrees that its Interests shall for all purposes be personal
property. No Partner has an interest in specific Partnership property. The
Partnership shall not issue any additional interest in the Partnership after
<PAGE>
the date hereof other than General Partner Interests or Preferred Partner
Interests.
ARTICLE IV
CAPITAL ACCOUNTS
Section 4.01. Capital Accounts. There shall be established on the books
of the Partnership a capital account (each a "Capital Account") for each
Partner that shall consist of the initial capital contribution to the
Partnership made by such Partner (or such Partner's predecessor in interest),
increased by: (a) any additional capital contributions made by such Partner
(or predecessor thereof), (b) the agreed value of any property subsequently
contributed to the capital of the Partnership by such Partner (or predecessor
thereof); and (c) Net Income allocated to any Partner (or predecessor thereof).
A Partner's Capital Account shall be decreased by: (a) Net Loss allocated to
any Partner (or predecessor thereof); and (b) any distributions made to such
Partner (or predecessor thereof). In addition to and notwithstanding the
foregoing, Capital Accounts shall be maintained at all times in accordance with
the capital account maintenance rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv).
Section 4.02. Compliance with Treasury Regulations. The foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Section 704(b) of
the Code and Treasury Regulation Section 1.704-1(b) and shall be interpreted
and applied in a manner consistent with such regulations. In the event that
the General Partner shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto, are determined in
order to comply with such regulations, the General Partner may make such
modification.
ARTICLE V
ALLOCATIONS
Section 5.01. Profits and Losses. Each fiscal period, the Net Income of
the Partnership shall be allocated (1) first, to the Preferred Partners, pro
rata in proportion to the number of Preferred Partner Interests held by each
Preferred Partner and at the distribution rate specified in the Action for each
series of Preferred Partner Interests, in an amount equal to the excess of (a)
the Preferred Partner Distributions accrued on such Preferred Partner Interests
since their date of issuance through and including the close of the current
fiscal period (whether or not paid) over (b) the amount of Net Income allocated
to the Preferred Partners pursuant to clause (1) of this Section 5.01 in all
prior fiscal periods; and (2) thereafter, to the General Partner. Except in
connection with the dissolution and liquidation of the Partnership, the Net
Loss of the Partnership shall be allocated each year to the General Partner.
Upon a dissolution and liquidation of the Partnership, Net Loss shall be
allocated to each Preferred Partner in an amount equal to the excess of (a)
such Preferred Partner's Capital Account over (b) such Preferred Partner's
Liquidation Distribution (as defined with respect to each Preferred Partner's
Interest in the Action establishing such Preferred Partner Interests), with any
remaining Net Loss being allocated to the General Partner. Notwithstanding the
foregoing, any and all costs and expenses of the Partnership paid (or required
to be paid) by the General Partner pursuant to Section 8.03(c) shall be
allocated each Fiscal Year to the General Partner.
<PAGE>
Section 5.02. Allocation Rules. For purposes of determining the profits,
losses, or any other items allocable to any period, profits, losses, and any
such other items shall be determined on a daily, monthly, or other basis, as
determined by the General Partner in its sole and absolute discretion using any
method that is permissible under Section 706 of the Code and the Treasury
Regulations thereunder. The Partners are aware of the income tax consequences
of the allocations made by this Article V and hereby agree to be bound by the
provisions of this Article V in reporting their shares of Partnership income
and loss for income tax purposes.
Section 5.03. Adjustments to Reflect Changes in Interests.
Notwithstanding the foregoing, with respect to any Fiscal Year during which any
Partner's percentage interest in the Partnership changes, whether by reason of
the admission of a Partner, the withdrawal of a Partner, a non-pro rata
contribution of capital to the Partnership or any other event described in
Section 706(d)(1) of the Code and the Treasury Regulations issued thereunder,
allocations of the items of income, gain, loss, and deduction of the
Partnership shall be adjusted appropriately to take into account the varying
interests of the Partners during such Fiscal Year. The General Partner shall
consult with the Partnership's accountants and other tax advisors and shall
select the method of making such adjustments, which method shall be used
consistently thereafter.
Section 5.04. Tax Allocations. For United States federal, state, and
local income tax purposes, Partnership income, gain, loss, deduction, or credit
(or any item thereof) for each Fiscal Year shall be allocated to and among the
Partners in order to reflect the allocations made pursuant to the provisions of
this Article V for such Fiscal Year (other than allocations of items which are
not deductible or are excluded from taxable income), taking into account any
variation between the adjusted tax basis and book value of Partnership property
in accordance with the principles of Section 704(c) of the Code.
Section 5.05. Qualified Income Offset. Notwithstanding any other
provision hereof, if any Partner unexpectedly receives an adjustment,
allocation, or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6) which creates or increases a deficit in
the Capital Account of such Partner (and, for this purpose, the existence of a
deficit shall be determined by increasing the Partner's Capital Account by any
amounts that the Partner is obligated to restore to the Partnership pursuant to
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated
to restore pursuant to the penultimate sentence of Treasury Regulation Section
1.704-2(g)(1) and -2(i)(5), and reducing the Partner's Capital Account by the
items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5),
and (6)), the next available gross income of the Partnership shall be allocated
to the Partners having such deficit balances, in proportion to the deficit
balances, until such deficit balances are eliminated as quickly as possible.
The provisions of this Section 5.05 are intended to constitute a "qualified
income offset" within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and implemented as therein
provided.
Section 5.06. Nonrecourse Debt. While this Agreement does not provide
certain provisions required by Treasury Regulations Sec. 1.704-1(b) and 1.704-2
because those provisions apply to transactions that are not expected to occur,
the Partners intend that the allocation under this Article V conform to
Treasury Regulations Sec. 1.704-1(b) and 1.704-2 (including, without limitation,
<PAGE>
the minimum gain chargeback, chargeback of partner nonrecourse debt minimum
gain and partner nonrecourse debt provisions of such Treasury Regulations), and
the General Partner shall make such changes in the allocations under this
Article V as it believes are reasonably necessary to meet the requirements of
such Treasury Regulations.
Section 5.07. Minimum Allocations to General Partner. Notwithstanding
any other provision hereof, other than the provisions of Section 5.05, the
General Partner shall be allocated at least 1% of all items of Net Income and
Net Losses for each Fiscal Year.
Section 5.08. Taxpayer Information. Any Person who holds Preferred
Partner Interests as a nominee for another Person is required to furnish to the
Partnership (a) the name, address, and taxpayer identification number of the
beneficial owner and the nominee; (b) information as to whether the beneficial
owner is (1) a Person that is not a United States Person, (2) a foreign
government, an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, or (3) a tax-exempt entity; (c) the
amount and description of Preferred Partner Interests held, acquired, or
transferred for the beneficial owner; and (d) certain information including the
dates of acquisitions and transfers, means of acquisitions and transfers, and
acquisitions cost for purchases, as well as the amount of net proceeds from
sales.
ARTICLE VI
DISTRIBUTIONS
Section 6.01. Distributions. Preferred Partners shall receive periodic
distributions, if any, in accordance with the terms of the applicable Action
creating the series of Preferred Partner Interests held by them, as and when
determined by the General Partner, out of funds held by the Partnership and
legally available therefor. Subject to the rights of the holders of the
Preferred Partner Interests, the General Partner shall receive such
distributions, if any, as may be determined from time to time by the General
Partner.
Section 6.02. Certain Distributions Prohibited. Notwithstanding anything
in this Agreement to the contrary, all Partnership distributions shall be
subject to the following limitations:
(a) No distribution shall be made to any Partner if, and to the extent
that, such distribution would not be permitted under Section 17-607 of the
Delaware Act or other applicable law.
(b) No distribution shall be made to any Partner to the extent that such
distribution, if made, would create or increase a deficit balance in the
Capital Account of such Partner.
(c) Other than Liquidating Distributions, no distribution of Partnership
property shall be made in kind. Notwithstanding anything in the Delaware Act
or this Agreement to the contrary, in the event of a Liquidating Distribution,
a Partner may be compelled in accordance with Section 12.01 to accept a
distribution of cash or any other asset in kind from the Partnership even if
the percentage of the asset distributed to it exceeds a percentage of that
asset which is equal to the percentage in which such Partner shares in
distributions from the Partnership.
<PAGE>
Section 6.03. Withholding. The Partnership shall comply with all
withholding requirements under United States federal, state and local law. The
Partnership shall request, and the Partners shall provide to the Partnership,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Partner, and any representations and forms as
shall reasonably be requested by the Partnership to assist it in determining
the extent of, and in fulfilling, its withholding obligations. The Partnership
shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Partner, shall remit
amounts withheld with respect to the Partners to applicable jurisdictions. To
the extent that the Partnership is required to withhold and pay over any
amounts to any authority with respect to distributions or allocations to any
Partner, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Partner. In the event of any claimed
overwithholding, Partners shall be limited to an action against the applicable
jurisdiction. If the amount withheld was not withheld from actual
distributions, the Partnership may reduce subsequent distributions by the
amount of such withholding.
ARTICLE VII
ACCOUNTING MATTERS; BANKING
Section 7.01. Fiscal Year. The fiscal year ("Fiscal Year") of the
Partnership shall be the calendar year, or such other year as is required by
the Code.
Section 7.02. Certain Accounting Matters. (a) At all times during the
existence of the Partnership, the General Partner shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Partnership. The books
of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.
The Partnership shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of the
Partnership shall be examined by and reported upon as of the end of each Fiscal
Year by a firm of independent certified public accountants selected by the
General Partner.
(b) The General Partner shall cause to be prepared and delivered to each
of the Partners, within 90 days after the end of each Fiscal Year of the
Partnership, annual financial statements of the Partnership, including a
balance sheet of the Partnership as of the end of such Fiscal Year, and the
related statements of income or loss and a statement indicating such Partner's
share of each item of Partnership income, gain, loss, deduction, or credit for
such Fiscal Year for income tax purposes.
(c) Notwithstanding anything in this Agreement to the contrary, the
General Partner may, to the maximum extent permitted by applicable law, keep
confidential from the Partners for such period of time as the General Partner
deems reasonable any information which the General Partner reasonably believes
to be in the nature of trade secrets or other information the disclosure of
which the General Partner in good faith believes is not in the best interest of
the Partnership or could damage the Partnership or which the Partnership or a
third party is required by law or by an agreement to keep confidential.
<PAGE>
(d) The General Partner may make, or revoke, in its sole and absolute
discretion, any elections for the Partnership that are permitted under tax or
other applicable laws, including elections under Section 704(c) of the Code,
provided that the General Partner shall not make any elections pursuant to
Section 754 of the Code.
Section 7.03. Banking. The Partnership shall maintain one or more bank
accounts in the name and for the sole benefit of the Partnership. The sole
signatories for such accounts shall be designated by the General Partner.
Reserve cash, cash held pending the expenditure of funds for the business of
the Partnership, or cash held pending a distribution to one or more of the
Partners may be invested in any manner at the sole and absolute discretion of
the General Partner.
Section 7.04. Right to Rely on Authority of General Partner. No Person
that is not a Partner, in dealing with the General Partner, shall be required
to determine such General Partner's authority to make any commitment or engage
in any undertaking on behalf of the Partnership, or to determine any fact or
circumstance bearing upon the existence of the authority of the General
Partner.
Section 7.05. Tax Matters Partner. The "tax matters partner," as defined
in Section 6231 of the Code, of the Partnership shall be the General Partner
(the "Tax Matters Partner"). The Tax Matters Partner shall receive no
compensation from the Partnership for its services in that capacity. The Tax
Matters Partner is authorized to employ such accountants, attorneys, and agents
as it, in its sole and absolute discretion, deems necessary or desirable. Any
Person who serves as Tax Matters Partner shall not be liable to the Partnership
or to any Partner for any action it takes or fails to take as Tax Matters
Partner with respect to any administrative or judicial proceeding involving
"partnership items" (as defined in Section 6231 of the Code) of the
Partnership.
ARTICLE VIII
MANAGEMENT
Section 8.01. Management. (a) The General Partner shall have full and
exclusive authority with respect to all matters concerning the conduct of the
business and affairs of the Partnership, including without limitation the
power, without the consent of the Limited Partners, to make all decisions it
deems necessary, advisable, convenient, or desirable to accomplish the purposes
of the Partnership. The Limited Partners shall have no right to remove or
replace the General Partner. The acts of the General Partner acting alone
shall serve to bind the Partnership and shall constitute the acts of the
Partners.
(b) The Limited Partners in their capacity as such shall not take part in
the management, operation, or control of the business of the Partnership or
transact any business in the name of the Partnership. In addition, the Limited
Partners, in their capacity as such, shall not be agents of the Partnership and
shall not have the power to sign or bind the Partnership to any agreement or
document. The Limited Partners shall have the right to vote only with respect
to those matters specifically provided for in this Agreement. Notwithstanding
anything herein to the contrary, the Preferred Partners may exercise all rights
provided to them, if any, under the Indenture and the Guaranty.
<PAGE>
(c) The General Partner is authorized and directed to use its best
efforts to conduct the affairs of, and to operate, the Partnership in such a
way that the Partnership would not be deemed to be an "investment company"
required to be registered under the 1940 Act or taxed as a corporation for
United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of CL&P for United States federal
income tax purposes. In this connection, the General Partner is authorized to
take any action not inconsistent with applicable law, the Certificate of
Limited Partnership, or this Agreement that does not materially adversely
affect the interests of holders of Preferred Partner Interests that the General
Partner determines in its sole and absolute discretion to be necessary or
desirable for such purposes.
Section 8.02. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Partnership or to any other Covered Person,
an Indemnified Person acting under this Agreement shall not be liable to the
Partnership or to any other Covered Person for its good faith reliance on the
provisions of this Agreement or the advice of counsel selected by the
Indemnified Person in good faith. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein, (1) whenever a conflict
of interest exists or arises between Covered Persons, or (2) whenever this
Agreement or any other agreement contemplated herein or therein provides that
an Indemnified Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Partnership or any Partner, the Indemnified
Person shall resolve such conflict of interest, taking such action or providing
such terms, considering in each case the relative interest of each party
(including its own interest) to such conflict, agreement, transaction, or
situation, and the benefits and burdens relating to such interests, any
customary or accepted industry practices, the advice of counsel selected by the
Indemnified Person in good faith, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action, or term so made, taken, or provided
by the Indemnified Person shall not constitute a breach of this Agreement or
any other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is permitted or
required to make a decision (1) in its "discretion" or under a grant of similar
authority or latitude, the Indemnified Person shall be entitled to consider
only such interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Partnership or any other Person, or (2) in its "good
faith" or under another express standard, the Indemnified Person shall act
under such express standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable law.
Section 8.03. Specific Obligations of the General Partner. The General
Partner hereby undertakes:
(a) to devote to the affairs of the Partnership so much of its time as
shall be necessary to carry on properly the Partnership's business and its
responsibilities hereunder;
<PAGE>
(b) to cause the Partnership (i) to do, or refrain from doing, such acts
as shall be required by Delaware law in order to preserve the valid existence
of the Partnership as a Delaware limited partnership and to preserve the
limited liability of the Limited Partners, and (ii) to refrain from engaging in
any activity that is not consistent with the limited purposes of the
Partnership set forth in Section 2.03 hereof;
(c) to pay directly all (and the Partnership shall not be obligated to
pay, directly or indirectly, any) of the costs and expenses of the Partnership,
including without limitation costs and expenses relating to the organization of
and offering of limited partner interests in the Partnership and costs and
expenses relating to the operation of the Partnership. By way of example and
not of limitation, such costs and expenses include costs and expenses of
accountants, attorneys, statistical or bookkeeping services, computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel, telephone, and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Partnership assets; and
(d) to timely perform all its duties as General Partner, including its
duty to pay distributions to the Preferred Partners in accordance with Section
6.01 hereof.
Section 8.04. Powers of the General Partner. The General Partner shall
have the right, power and authority, in the management of the business and
affairs of the Partnership, to do or cause to be done any and all acts deemed
by the General Partner to be necessary or desirable to effectuate the business,
purposes, and objectives of the Partnership. Without limiting the generality
of the foregoing, the General Partner shall have the power and authority
without any further act, approval, or vote of any Partner to:
(a) cause the Partnership to issue Interests, including Preferred Partner
Interests, and determine classes and series thereof, in accordance with this
Agreement; provided, however, that the Partnership shall not create or issue
any Interests senior to Preferred Partner Interests;
(b) act as, or appoint another Person to act as, registrar and transfer
agent for the Preferred Partner Interests;
(c) establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including with respect
to allocations, distributions, and voting rights and declare distributions and
make all other required payments on General Partner, Class A Limited Partner
and Preferred Partner Interests as the Partnership's paying agent;
(d) enter into and perform one or more Indentures and one or more
Underwriting Agreements and use the proceeds from the issuance of the Interests
to purchase the Subordinated Debentures, in each case on behalf of the
Partnership;
(e) bring and defend on behalf of the Partnership actions and proceedings
at law or in equity before any court or governmental, administrative, or other
regulatory agency, body, or commission or otherwise;
(f) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
<PAGE>
(g) redeem each series of Preferred Partner Interests (which shall
constitute a return of capital and not a distribution of income) in accordance
with its terms and/or to the extent that the related series of Subordinated
Debentures is redeemed or reaches maturity; and
(h) execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Partnership in all matters
necessary, desirable, convenient, advisable or incidental to the foregoing.
The expression of any power or authority of the General Partner in this
Agreement shall not in any way limit or exclude any other power or authority
which is not specifically or expressly set forth in, or precluded by, this
Agreement.
Section 8.05. Independent Affairs. Any Partner or any Affiliate thereof
may engage in or possess an interest in any other business venture of whatever
nature and description, independently or with others, wherever located and
whether or not comparable to or in competition with the Partnership or the
General Partner, or any Affiliate thereof, and neither the Partnership nor any
of the Partners shall, by virtue of this Agreement, have any rights with
respect to, or interests in, such independent ventures or the income, profits,
or losses derived therefrom. No Partner or Affiliate thereof shall be
obligated to present any particular investment opportunity to the Partnership
even if such opportunity is of a character that, if presented to the
Partnership, could be taken by the Partnership, and any Partner or Affiliate
thereof shall have the right to take for its own account (individually or as a
Partner or fiduciary) or to recommend to others any such particular investment
opportunity.
Section 8.06. Meetings of the Partners. Meetings of the Partners of any
class or series or of all classes or series of the Partnership's Interests may
be called at any time by the Partners holding 10% in liquidation preference of
such class or series of Interests, or of all classes or series of Interests, as
the case may be, or as provided in any Action establishing a series of
Preferred Partner Interests. Except to the extent otherwise provided in any
such Action, the following provisions shall apply to meetings of Partners.
(a) Notice of any meeting shall be given to all Partners not less than 10
Business Days nor more than 60 days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Whenever a vote,
consent, or approval of Partners is permitted or required under this Agreement,
such vote, consent, or approval may be given at a meeting of Partners or by
written consent.
(b) Each Partner may authorize any Person to act for it by proxy on all
matters in which a Partner is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. Every proxy must be
signed by the Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the Partner
executing it.
(c) Each meeting of Partners shall be conducted by the General Partner or
by such other Person that the General Partner may designate.
<PAGE>
(d) Subject to the provisions of this Section 8.06, the General Partner,
in its sole and absolute discretion, shall establish all other provisions
relating to meetings of Partners, including notice of the time, place, or
purpose of any meeting at which any matter is to be voted on by any Partners,
waiver of any such notice, action, by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy, or any other matter with respect to the exercise of any such right to
vote; provided, however, that unless the General Partner has established a
lower percentage, a majority of the Partners entitled to vote thereat shall
constitute a quorum at all meetings of the Partners.
Section 8.07. Net Worth of the General Partner. By execution of this
Agreement, the General Partner represents and covenants that (a) as of the date
hereof and at all times during the existence of the Partnership it will
maintain a fair market value net worth of at least 10% of the total
contributions less redemptions to the Partnership, throughout the life of the
Partnership, in accordance with Rev. Proc. 92-88, 1992-2 C.B. 496, or such
other amount as may be required from time to time pursuant to any amendment,
modification, or successor to Rev. Proc. 92-88 (such net worth being computed
excluding any interest in, or receivable due from, the Partnership and
including any income tax liabilities that would become due by the General
Partner upon disposition by the General Partner of all assets included in
determining such net worth), and (b) it will not make any voluntary
dispositions of assets which would reduce the net worth below the amount
described in (a).
Section 8.08. Restrictions on General Partner. So long as any series of
Subordinated Debentures are held by the Partnership, the General Partner,
unless so directed by the Special Representative, shall not (1) direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or executing any trust or power conferred on the Trustee with
respect to such series, (2) waive any past default which is available under the
Indenture, (3) exercise any right to rescind or annul a declaration that the
principal of all of a series of Subordinated Debentures shall be due and
payable or (4) consent to any amendment, modification, or termination of the
Indenture, or to a supplemental indenture under the Indenture where such
consent shall be required, without, in each case, obtaining the prior approval
of the holders of not less than 66 2/3% of the aggregate stated liquidation
preference of all series of Preferred Partner Interests affected thereby,
acting as a single class; provided, however, that where a consent under the
Indenture would require the consent of each holder affected thereby, no such
consent shall be given by the General Partner without the prior consent of each
holder of all series of Preferred Partner Interests affected thereby. The
General Partner shall not revoke any action previously authorized or approved
by a vote of any series of Preferred Partner Interests. The General Partner
shall notify all holders of such Preferred Partner Interests of any notice of
default received from the Trustee with respect to such series of Subordinated
Debentures.
ARTICLE IX
LIABILITY AND INDEMNIFICATION
Section 9.01. Partnership Expenses and Liabilities.
<PAGE>
(a) Except as provided in the Delaware Act, the General Partner shall
have the liabilities of a partner in a partnership without limited partners to
Persons other than the Partnership and the other Partners.
(b) Except as otherwise expressly required by law, a Limited Partner, in
its capacity as such, shall have no liability in excess of (1) the amount of
its capital contributions to the Partnership, (2) its share of any assets and
undistributed profits of the Partnership, and (3) the amount of any
distributions wrongfully distributed to it.
Section 9.02. No Liability. Except as otherwise expressly provided in
Section 9.01(a) or by the Delaware Act, no Covered Person shall be liable to
the Partnership or to any other Partner for any act or omission performed or
omitted pursuant to the authority granted to it hereunder or by law, or from a
loss resulting from any mistake or error in judgment on its part or from the
negligence, dishonesty, fraud or bad faith of any employee, independent
contractor, broker or other agent of the Partnership, provided that such act or
omission, such mistake or error in judgment or the selection of such employee,
independent contractor, broker or other agent, as the case may be, did not
result from the willful misconduct, gross negligence or fraud of such Covered
Person. Any Covered Person shall be fully protected in relying in good faith
upon the records of the Partnership and upon such information, opinions,
reports or statements presented to the Partnership by any Person as to matters
the Covered Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Partnership, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to Partners might properly be paid.
Section 9.03. Indemnification. To the fullest extent permitted by
applicable law, except as set forth in Section 8.03(c), an Indemnified Person
shall be entitled to indemnification from the Partnership for any loss, damage
or claim incurred by such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Partnership and in a manner reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of willful
misconduct, gross negligence or fraud with respect to such acts or omissions;
provided, however, that any indemnity under this Section 9.03 shall be provided
out of and to the extent of Partnership assets only, and except as otherwise
provided by the Delaware Act, no Covered Person shall have any personal
liability on account thereof. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Partnership prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in this Section 9.03.
ARTICLE X
WITHDRAWAL; TRANSFER RESTRICTIONS
<PAGE>
Section 10.01. Transfer by General Partner; Admission of Substituted
General Partner. The General Partner may not Transfer its Interest (in whole
or in part) to any Person without the consent of all other Partners, provided
that the General Partner may, without the consent of any Partner, Transfer its
Interest to any of its direct or indirect wholly-owned subsidiaries.
Notwithstanding anything else herein, the General Partner may merge with or
into another Person, may permit another Person to merge with or into the
General Partner and may Transfer all or substantially all of its assets to
another Person if the General Partner is the survivor of such merger or the
Person into which the General Partner is merged or to which the General
Partner's assets are transferred is a Person organized under the laws of the
United States or any state thereof or the District of Columbia and the General
Partner shall have the right to admit the assignee or transferee of its
Interest which is permitted hereunder as a substituted or additional general
partner of the Partnership, without the consent of the Limited Partners. Any
such assignee or transferee of all or a part of the Interest of a General
Partner shall be deemed admitted to the Partnership as a general partner of the
Partnership immediately prior to the effective date of such Transfer, and such
additional or successor general partner is hereby authorized to and shall
continue the business of the Partnership without dissolution.
Section 10.02. Withdrawal of Limited Partners. A Preferred Partner may
not withdraw from the Partnership prior to the dissolution, liquidation, or
winding up of the Partnership except upon the assignment of its Preferred
Partner Interests (including any redemption, repurchase, exchange, or other
acquisition by the Partnership), as the case may be, in accordance with the
provisions of this Agreement. Any Person who has been assigned one or more
Interests shall provide the Partnership with a completed Form W-8 or such other
documents or information as are requested by the Partnership for tax reporting
purposes. A withdrawing Preferred Partner shall not be entitled to receive any
distribution and shall not otherwise be entitled to receive the fair value of
its Preferred Partner Interest except as otherwise expressly provided in this
Agreement.
ARTICLE XI
DISSOLUTION OF THE PARTNERSHIP
Section 11.01. No Dissolution. The Partnership shall not be dissolved by
the admission of Partners in accordance with the terms of this Agreement. The
death, withdrawal, incompetency, bankruptcy, dissolution, or other cessation to
exist as a legal entity of a Limited Partner, or the occurrence of any other
event that terminates the Interest of a Limited Partner in the Partnership,
shall not in and of itself cause the Partnership to be dissolved and its
affairs wound up. To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner, subject to the terms of this
Agreement, may, without any further act, vote, or approval of any Partner,
admit any Person to the Partnership as an additional or substitute Limited
Partner, which admission shall be effective as of the date of the occurrence of
such event, and the business of the Partnership shall be continued without
dissolution.
Section 11.02. Events Causing Dissolution. The Partnership shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
<PAGE>
(a) The expiration of the term of the Partnership, as provided in Section
2.04 hereof;
(b) The withdrawal, removal, or bankruptcy of the General Partner or
Transfer (other than a grant of a security interest) by the General Partner of
its entire Interest in the Partnership when the assignee is not admitted to the
Partnership as an additional or successor general partner in accordance with
Section 10.01 hereof, or the occurrence of any other event that results in the
General Partner ceasing to be a general partner of the Partnership under the
Delaware Act, provided, the Partnership shall not be dissolved and required to
be wound up in connection with any of the events specified in this clause (b)
if (1) at the time of the occurrence of such event there is at least one
remaining general partner of the Partnership who is hereby authorized to,
agrees to, and does carry on the business of the Partnership, or (2) within 90
days after the occurrence of such event, a majority in Interest of the
remaining Partners (or such greater percentage in Interest as is required by
the Delaware Act) agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of such event, if required, of
one or more successor general partners of the Partnership;
(c) The entry of a decree of judicial dissolution under Section 17-802 of
the Delaware Act;
(d) The written consent of the General Partner and all of the Preferred
Partners; or
(e) If a Tax Event or an Investment Company Act Event has occurred,
pursuant to an Action of the General Partner so providing.
Section 11.03. Notice of Dissolution. Upon the dissolution of the
Partnership, the General Partner shall promptly notify the Partners of such
dissolution.
ARTICLE XII
LIQUIDATION OF PARTNERSHIP INTERESTS
Section 12.01. Liquidation. Upon dissolution, liquidation or winding up
of the Partnership, the General Partner, or, in the event that the dissolution,
liquidation or winding up is caused by an event described in Section 11.02(b)
and there is no other general partner of the Partnership, a Person or Persons
who may be approved by Preferred Partners holding not less than a majority in
liquidation preference of the Preferred Partner Interests, as liquidating
trustee (the "Liquidating Trustee"), shall immediately commence to wind up the
Partnership's affairs; provided, however, that a reasonable time shall be
allowed for the orderly liquidation of the assets of the Partnership and the
satisfaction of liabilities to creditors so as to enable the Partners to
minimize the normal losses attendant upon a liquidation. The Preferred
Partners shall continue to share profits and losses during liquidation in the
same proportions, as specified in Articles V and VI hereof, as before
liquidation. The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(a) to creditors of the Partnership, including Preferred Partners who are
creditors, to the extent permitted by law, in satisfaction of the liabilities
of the Partnership (whether by payment or the making of reasonable provision
<PAGE>
for payment thereof), other than (1) liabilities for which reasonable provision
for payment has been made and (2) liabilities for distributions to Partners;
(b) to the holders of Preferred Partner Interests of each series then
outstanding in accordance with the terms of the Action or Actions for such
series; and
(c) to all Partners in proportion to their respective positive Capital
Account balances, after giving effect to all contributions, distributions, and
allocations for all periods.
Section 12.02. Termination. The Partnership shall terminate when all of
the assets of the Partnership have been distributed in the manner provided for
in this Article XII, and the Certificate of Limited Partnership shall have been
cancelled in the manner required by the Delaware Act.
Section 12.03. Duty of Care. The General Partner or the Liquidating
Trustee, as the case may be, shall not be liable to the Partnership or any
Partner for any loss attributable to any act or omission of the General Partner
taken in good faith in connection with the liquidation of the Partnership and
distribution of its assets in belief that such course of conduct was in
accordance with this Agreement and in the best interest of the Partnership.
The General Partner or the Liquidating Trustee, as the case may be, may consult
with counsel and accountants with respect to liquidating the Partnership and
distributing its assets and shall be justified in acting or omitting to act in
accordance with the written opinion of such counsel or accountants, provided
they shall have been selected with reasonable care.
Section 12.04. No Liability for Return of Capital. The General Partner and
its respective officers, directors, members, shareholders, employees,
representatives, agents, partners, and Affiliates shall not be personally
liable for the return of the contributions of any Partner to the Partnership.
No Limited Partner shall be obligated to restore to the Partnership any amount
with respect to a negative Capital Account. The General Partner shall be
obligated to restore to the Partnership any deficit balance in its Capital
Account upon the dissolution of the Partnership by the end of the Fiscal Year
of dissolution (or, if later, within 90 days after the date of such
dissolution).
ARTICLE XIII
PREFERRED PARTNER INTERESTS
Section 13.01. Preferred Partner Interests.
(a) The aggregate number of Preferred Partner Interests which the
Partnership shall have authority to issue is unlimited. Each series of
Preferred Partner Interests shall rank equally and all Preferred Partner
Interests shall rank senior to all other Interests in respect of the right to
receive distributions and the right to receive payments out of the assets of
the Partnership upon voluntary or involuntary dissolution and winding up of the
Partnership.
(b) The General Partner on behalf of the Partnership is authorized to
issue Preferred Partner Interests, in one or more series, having such
designations, rights, privileges, restrictions, and other terms and provisions,
whether in regard to distributions, return of capital, or otherwise, as may
<PAGE>
from time to time be established in a written action or actions (each, an
"Action") of the General Partner providing for the issue of such series. In
connection with the foregoing, the General Partner is expressly authorized,
prior to issuance, to set forth in an Action or Actions providing for the issue
of such series, the following:
(1) The distinctive designation of such series which shall
distinguish it from other series;
(2) The number of Preferred Partner Interests included in such
series;
(3) The Preferred Partner Distribution rate (or method of
determining such rate) for Preferred Partner Interests of such series and
the first date upon which such Preferred Partner Distribution shall be
payable; provided, however, that Preferred Partner Distributions shall be
payable on a monthly basis to the holders of the Preferred Securities of
such series as of a record date in each calendar month during which the
Preferred Securities of such series are outstanding;
(4) The amount or amounts which shall be paid out of the assets of
the Partnership to the holders of such series of Preferred Partner
Interests upon voluntary or involuntary dissolution and winding up of the
Partnership;
(5) The price or prices at which (the "Redemption Price"), the
period or periods within which, and the terms and conditions upon which
the Preferred Partner Interests of such series may be redeemed or
purchased, in whole or in part, at the option of the Partnership;
(6) The obligation, if any, of the Partnership to purchase or redeem
Preferred Partner Interests of such series pursuant to a sinking fund or
otherwise and the price or prices at which, the period or periods within
which and the terms and conditions upon which the Preferred Partner
Interests of such series shall be redeemed, in whole or in part, pursuant
to such obligation;
(7) The period or periods within which and the terms and conditions,
if any (including the price or prices or the rate or rates of conversion
or exchange and the terms and conditions of any adjustments thereof), upon
which the Preferred Partner Interests of such series shall be convertible
or exchangeable at the option of the Preferred Partner, or the
Partnership, into any other Interests or securities or other property or
cash or into any other series of Preferred Partner Interests;
(8) The voting rights, if any, of the Preferred Partner Interests of
such series in addition to those required by law or set forth herein, and
any requirement for the approval by the Preferred Partner Interest, or of
the Preferred Partner Interests of one or more series, or of both, as a
condition to specified Action or amendments to this Agreement; and
(9) Any other relative rights, powers, preferences, or limitations
of the Preferred Partner Interests of the series not inconsistent with
this Agreement or with applicable law.
In connection with the foregoing and without limiting the generality
thereof, the General Partner is hereby expressly authorized, without the vote
<PAGE>
or approval of any other Partner, to take any Action to create under the
provisions of this Agreement a series of Preferred Partner Interests that was
not previously outstanding. Without the vote or approval of any other Partner,
the General Partner may execute, swear to, acknowledge, deliver, file, and
record whatever documents may be required in connection with the issue from
time to time of Preferred Partner Interests in one or more series as shall be
necessary or desirable to reflect the issue of such series. The General
Partner shall do all things it deems to be necessary or desirable to comply
with the Delaware Act and is authorized and directed to do all permissible
things it deems to be necessary or desirable in connection with any future
issuance, including compliance with any statute, rule, regulation, or guideline
of any federal, state, or other governmental agency or any securities exchange.
Any Action or Actions taken by the General Partner pursuant to the
provisions of this paragraph (b) shall be deemed an amendment and supplement to
and part of this Agreement.
(c) Except as otherwise provided in this Agreement or in any Action in
respect of any series of the Preferred Partner Interests and as otherwise
required by law, all rights to the management and control of the Partnership
shall be vested exclusively in the General Partner.
(d) No holder of Interests shall be entitled as a matter of right to
subscribe for or purchase, or have any preemptive right with respect to, any
part of any new or additional issue of Interests of any class or series
whatsoever, or of securities convertible into any Interests of any class or
series whatsoever, whether now or hereafter authorized and whether issued for
cash or other consideration or by way of distribution. Any Person acquiring
Preferred Partner Interests shall be admitted to the Partnership as a Preferred
Partner upon compliance with Section 2.06.
Section 13.02. Terms of All Preferred Partner Interests. Notwithstanding
anything else in any Action to the contrary, all Preferred Partner Interests of
the Partnership regardless of series shall have the voting rights, preferences,
participating, optional and other special rights, and the qualifications,
limitations, or restrictions of, and other matters relating to, the Preferred
Partner Interests as set forth below in this Section 13.02.
(a) Distributions.
(1) The Preferred Partners shall be entitled to receive, to the
extent that the Partnership has cash on hand sufficient to permit such
payments and, as determined by the General Partner, funds legally
available therefor, cumulative preferential cash distributions ("Preferred
Partner Distributions") at a rate per annum established by the General
Partner, calculated on the basis of a 360-day year consisting of 12 months
of 30 days each, and for any period shorter than a full monthly
distribution period, Preferred Partner Distributions will be computed on
the basis of the actual number of days elapsed in such period, and payable
in United States dollars monthly in arrears on the last day of each
calendar month of each year. In the event that any date on which
Preferred Partner Distributions are payable is not a Business Day, then
payment of such Preferred Partner Distributions will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
<PAGE>
effect as if made on such date. Such Preferred Partner Distributions will
be cumulative from the date of original issue whether or not there are
profits, surplus, or other funds of the Partnership legally available for
the payment of Preferred Partner Distributions, or whether they are
deferred.
(2) If distributions have not been paid, or set aside for payment,
in full on any series of Preferred Partner Interests, the Partnership may
not:
(A) pay, or set aside for payment, any distributions on any
other series of Preferred Partner Interests, unless the amount of any
distributions paid, or set aside for payment, on any Preferred
Partner Interests is paid on all Preferred Partner Interests then
outstanding on a pro rata basis, on the date such distributions are
paid, or set aside for payment, so that
(i) (x) the aggregate amount of distributions paid on such
series of Preferred Partner Interests bears to (y) the aggregate
amount of distributions paid on all such Preferred Partner
Interests outstanding the same ratio as
(ii) (x) the aggregate of all accumulated arrears of
unpaid distributions in respect of such series of Preferred
Partner Interests bears to (y) the aggregate of all accumulated
arrears of unpaid distributions in respect of all such Preferred
Partner Interests outstanding;
(B) pay, or set aside for payment, any distribution on the
General Partner's Interest; or
(C) redeem, purchase or otherwise acquire any other Preferred
Partner Interests of such series or any other series then outstanding
or any of the General Partner's Interest;
until, in each case, such time as all accumulated and unpaid distributions
on all series of Preferred Partner Interests shall have been paid in full
for all distribution periods terminating on or prior to, in the case of
clauses (A) and (B), such payment and, in the case of clause (C), the date
of such redemption, purchase, or acquisition.
(b) Redemption Procedures.
(1) Notice of any redemption (a "Notice of Redemption") of the
Preferred Partner Interests will be given by the Partnership by mail or
delivery to each record holder of Preferred Partner Interests to be
redeemed not fewer than 30 nor more than 60 days prior to the date fixed
for redemption thereof, at a redemption price set forth in the related
Action plus an amount equal to accumulated and unpaid Preferred Partner
Distributions. For purposes of the calculation of the date of redemption
and the dates on which notices are given pursuant to this paragraph
(b)(i), a Notice of Redemption shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or on the
date it was delivered in person, receipt acknowledged, to the holders of
such Preferred Partner Interests. Each Notice of Redemption shall be
addressed to the record holders of the Preferred Partner Interests at the
<PAGE>
address of the holder appearing in the books and records of the
Partnership. Each Notice of Redemption may state that it is subject to
receipt by the Partnership of redemption monies on or before the date
fixed for redemption, and which notice shall be of no effect unless such
monies are so received prior to such date. No defect in the Notice of
Redemption or in the mailing or delivery thereof or publication of its
contents shall affect the validity of the redemption proceedings.
(2) The Partnership may not redeem any Preferred Partner Interests
unless all accumulated and unpaid distributions have been paid on all
Preferred Partner Interests for all monthly distribution periods
terminating on or prior to the date of redemption. In the case of a
partial redemption resulting from a Tax Event, the Partnership will (A)
cause the global certificates representing all of such series of Preferred
Partner Interests to be withdrawn from The Depository Trust Company or its
successor securities depository, (B) issue certificates in definitive form
representing such series of Preferred Partner Interests, and (C) redeem
the series or portion of the series of Preferred Partner Interests subject
to such Tax Event. Subject to applicable law, CL&P or its subsidiaries
may at any time and from time to time purchase outstanding Preferred
Partner Interests by tender, in the open market, or by private agreement.
In the event that CL&P or its subsidiary surrenders any Preferred Partner
Interests to the Partnership, the Partnership will distribute, to or upon
order by CL&P, Subordinated Debentures of the corresponding series in
aggregate principal amount equal to the aggregate liquidation preference
of the Preferred Securities so surrendered. If a partial redemption of
outstanding Preferred Partner Interests would result in a delisting of a
series of Preferred Partner Interests from any national securities
exchange on which the series of Preferred Partner Interests is then
listed, the Partnership may then only redeem the series of Preferred
Partner Interests in whole.
(3) If Notice of Redemption shall have been given and payment shall
have been made by the Partnership to the record holders of the Preferred
Partner Interests, then upon the date of such payment, all rights of the
Preferred Partner Interest Owners or holders of such Preferred Partner
Interests so called for redemption will cease, except the right of the
holders of such securities to receive the Redemption Price, but without
interest. In the event that any date fixed for redemption of Preferred
Partner Interests is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next
succeeding calendar year, such payment will be made on the immediately
preceding Business Day (in each case with the same force and effect as if
made on such day). In the event that payment of the Redemption Price in
respect of Preferred Partner Interests is not made either by the
Partnership or by CL&P pursuant to the Guaranty, distributions on such
Preferred Partner Interests will continue to accrue at the then applicable
rate, from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(c) Liquidation Distribution. If, upon any liquidation, the Liquidation
Distribution on any series of Preferred Partner Interests can be paid only in
part because the Partnership has insufficient assets available to pay in full
the aggregate Liquidation Distribution on all Preferred Partner Interests, then
<PAGE>
the amounts payable directly by the Partnership on such series of Preferred
Partner Interests and on all other series of Preferred Partner Interests shall
be paid on a pro rata basis, so that
(1) (A) the aggregate amount actually paid in respect of the
Liquidation Distribution on such series bears to (B) the aggregate amount
actually paid as liquidation distributions on all other Preferred Partner
Interests the same ratio as
(2) (A) the aggregate Liquidation Distribution on such series bears
to (B) the aggregate maximum liquidation distributions on all other
Preferred Partner Interests.
(d) Voting Rights. The Limited Partners shall not have any right to vote
on matters concerning the Partnership except as specifically set forth in this
Agreement, in the Guaranty, or as otherwise required by law. If (1) the
Partnership fails to pay distributions in full on any series of Preferred
Partner Interests for 18 consecutive months; (2) an Event of Default under the
Indenture occurs and is continuing; or (3) CL&P is in default on any of its
payment or other obligations under the Guaranty, then the holders of all series
of the Preferred Partner Interests outstanding, acting as a single class, will
be entitled, by a vote of the majority of the aggregate stated liquidation
preference of outstanding Preferred Partner Interests, to appoint and authorize
a special representative (the "Special Representative") to enforce the
Partnership's creditor rights under the Subordinated Debentures and the
Indenture against CL&P and enforce the obligations undertaken by CL&P under the
Guaranty, including (but only after failure to pay distributions for 60
consecutive monthly distribution periods) to declare and pay distributions on
such series of Preferred Partner Interests, the General Partner agreeing to
execute and deliver such documents as may be necessary or desirable for the
Special Representative to enforce such rights and obligations. Notwithstanding
anything else herein, the Special Representative shall not be admitted as a
partner of the Partnership and shall have no liability for the debts,
obligations, or liabilities of the Partnership, except to the extent otherwise
required by applicable law in order for such Special Representative to enforce
the Partnership's rights under the Subordinated Debentures and the Indenture
and fulfill its other duties hereunder.
In furtherance of the foregoing, and without limiting the powers of any
Special Representative so appointed and for the avoidance of any doubt
concerning the powers of the Special Representative, any Special
Representative, in its own name and as trustee of an express trust, may
institute a proceeding, including, without limitation, any suit in equity, an
action at law, or other judicial or administrative proceeding, to enforce the
Partnership's creditor rights pursuant to the Indenture and the Guaranty
directly against CL&P or any other obligor in connection with such obligations
to the same extent as the Partnership and on behalf of the Partnership, and may
pursue such proceeding to judgment or final decree, and enforce the same
against CL&P or any other obligor in connection with such obligations and
collect, out of the property, wherever situated, of CL&P or any such other
obligor upon such obligations, the monies adjudged or decreed to be payable in
the manner provided by law.
For purposes of determining whether the Partnership has failed to pay
distributions in full for 18 consecutive monthly distribution periods,
distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative distributions have been or
<PAGE>
contemporaneously are declared and paid with respect to all monthly
distribution periods terminating on or prior to the date of payment of such
full cumulative distributions on all Preferred Partner Interests. Subject to
the requirements of applicable law, not later than 30 days after such right to
appoint a Special Representative arises, the General Partner will convene a
general meeting for the above purpose. If the General Partner fails to convene
such meeting within such 30-day period, the Preferred Partners who hold 10% of
the aggregate stated liquidation preference of the outstanding Preferred
Partner Interests will be entitled to convene such meeting. The provisions of
this Agreement relating to the convening and conduct of general meetings of
Partners will apply with respect to any such meeting. Any Special
Representative so appointed shall cease to act in such capacity immediately if
the Partnership (or CL&P pursuant to the Guaranty) shall have paid in full all
accumulated and unpaid distributions on the Preferred Partner Interests or such
default or breach, as the case may be, shall have been cured. Notwithstanding
the appointment of any such Special Representative, CL&P retains all rights
under the Indenture, including the right to extend the interest payment period
on the Subordinated Debentures.
If any proposed amendment of this Agreement provides for, or the General
Partner otherwise proposes to effect (pursuant to an Action or otherwise), any
action which would materially adversely affect the powers, preferences, or
special rights of any series of Preferred Partner Interests, then holders of
such series of outstanding Preferred Partner Interests will be entitled to vote
on such amendment or action of the General Partner (but not on any other
amendment or action) and, in the case of an amendment which would equally
adversely affect the powers, preferences, or special rights of any other series
of Preferred Partner Interests, all holders of such series of Preferred Partner
Interests, shall vote together as a class on such amendment or action of the
General Partner (but not on any other amendment or action), and such amendment
or action shall not be effective except with the approval of Preferred Partners
holding not less than 66 2/3% of the aggregate stated liquidation preference of
such outstanding series of Preferred Partner Interests. Except as otherwise
provided under Section 11.02 or the Delaware Act, the Partnership will be
dissolved and wound up only with the consent of the holders of all outstanding
Preferred Partner Interests.
The powers, preferences, or special rights of any Preferred Partner
Interests will be deemed not to be adversely affected by the creation or issue
of, and no vote will be required for the creation or issuance of, any
additional series of Preferred Partner Interests or additional general partner
Interests.
Any required approval of Preferred Partner Interests may be given at a
separate meeting of such holders convened for such purpose, at a meeting of the
holders of all series of Preferred Partner Interests or pursuant to written
consent. The Partnership will cause a notice of any meeting at which holders
of any Preferred Partner Interests are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be mailed to
each holder of Preferred Partner Interests. Each such notice will include a
statement setting forth (a) the date of such meeting or the date by which such
action is to be taken, (b) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought, and (c) instructions for the
delivery of proxies or consents.
<PAGE>
No vote or consent of the holders of the Preferred Partner Interests will
be required for the Partnership to redeem and cancel the Preferred Partner
Interests in accordance with this Agreement.
Notwithstanding that holders of Preferred Partner Interests are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Partner Interests that are owned by CL&P or any entity owned more
than 50% by CL&P, either directly or indirectly, shall not be entitled to vote
or consent and shall, for the purposes of such vote or consent, be treated as
if they were not outstanding.
(e) Mergers. The Partnership shall not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer, or lease its properties
and assets substantially as an entirety, to any corporation or other entity,
except with the approval of the General Partner and the holders of 66 2/3% in
aggregate stated liquidation preference of all outstanding Preferred Partner
Interests or as otherwise described below. The General Partner may, without
the consent of the holders of the Preferred Partner Interests, cause the
Partnership to consolidate, amalgamate, merge with or into, or be replaced by,
or convey, transfer, or lease its properties and assets substantially as an
entirety to, a corporation, a limited liability company, limited partnership,
trust, or other entity organized as such under the laws of any state of the
United States of America or the District of Columbia, provided that (1) such
successor entity either (A) expressly assumes all of the obligations of the
Partnership under the Preferred Partner Interests and the other obligations of
the Partnership or (B) substitutes for the Preferred Partner Interests other
securities having substantially the same terms as the Preferred Partner
Interests (the "Successor Securities") so long as the Successor Securities
rank, as regards participation in the profits and assets of the successor
entity, at least as high as the Preferred Partner Interests rank, as regards
participation in the profits and assets of the Partnership, (2) CL&P confirms
in writing its obligations under the Guaranty with regard to the Successor
Securities, if any are issued, (3) such consolidation, amalgamation, merger,
replacement, conveyance, transfer, or lease does not cause the Preferred
Partner Interests or Successor Securities to be delisted by any national
securities exchange or other organization on which the Preferred Partner
Interests are then listed, (4) such merger, consolidation, amalgamation,
replacement, conveyance, transfer, or lease does not cause the Preferred
Partner Interests or Successor Securities to be downgraded by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, (5) such
merger, consolidation, amalgamation, replacement, conveyance, transfer, or
lease does not adversely affect the powers, preferences, and special rights of
holders of Preferred Partner Interests or Successor Securities in any material
respect, (6) such successor entity has a purpose substantially identical to
that of the Partnership, and (7) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer, or lease CL&P has received an
opinion of counsel (which may be regular counsel to CL&P or an Affiliate, but
not an employee thereof) experienced in such matters to the effect that (A)
holders of outstanding Preferred Partner Interests will not recognize any gain
or loss for United States federal income tax purposes as a result of the
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, (B) such successor entity will be treated as a partnership for United
States federal income tax purposes, (C) following such consolidation,
amalgamation, merger, replacement, conveyance, transfer, or lease, CL&P and
such successor entity will be in compliance with the 1940 Act without
registering thereunder as an "investment company," and (D) such merger,
<PAGE>
consolidation, amalgamation, replacement, conveyance, transfer, or lease will
not adversely affect the limited liability of holders of Preferred Partner
Interests or Successor Securities.
ARTICLE XIV
TRANSFERS
Section 14.01. Transfers of Preferred Partner Interests. Preferred
Partner Interests may be freely transferred by a Preferred Partner in
accordance with the terms and conditions set forth in this Agreement. Any
transfer or purported transfer of any Interest not made in accordance with this
Agreement shall be null and void.
Section 14.02. Transfer of Certificates. The General Partner shall
provide for the registration of Certificates. Upon surrender for registration
of transfer of any Certificate, the General Partner shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer and agreement to be bound by
the terms of this Agreement in form satisfactory to the General Partner duly
executed by the Preferred Partner or his attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be cancelled by
the General Partner. A transferee of a Certificate shall provide the
Partnership with a completed Form W-8 or such other documents or information as
are requested by the Partnership for tax reporting purposes and thereafter
shall be admitted to the Partnership as a Preferred Partner and shall be
entitled to the rights and subject to the obligations of a Preferred Partner
hereunder upon the receipt by such transferee of a Certificate. The transferor
of a Certificate shall cease to be a Limited Partner at the time that the
transferee of the Certificate is admitted to the Partnership as a Preferred
Partner in accordance with this Section 14.02.
Section 14.03. Persons Deemed Preferred Partners. The Partnership may
treat the Person in whose name any Certificate shall be registered on the books
and records of the Partnership as the Preferred Partner and the sole holder of
such Certificate for purposes of receiving distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claims to or interest in such Certificate on the part of any
other Person, whether or not the Partnership shall have actual or other notice
thereof.
Section 14.04. Book Entry Interests. The Certificates, on original
issuance, will be issued in the form of a typewritten Certificate or
Certificates representing the Book Entry Interests to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Partnership. Such Certificates shall initially be registered on the books and
records of the Partnership in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Preferred Partner Interest Owner will receive a
definitive Certificate representing such Preferred Partner Interest Owner's
interests in such Certificate, except as provided in Section 14.06. Unless and
until definitive, fully registered Certificates (the "Definitive Certificates")
have been issued to the Preferred Partner Interest Owners pursuant to Section
14.06:
(a) The provisions of this Section shall be in full force and effect;
<PAGE>
(b) The Partnership and the General Partner shall be entitled to deal
with the Clearing Agency for all purposes of this Agreement (including the
payment of distributions on the Certificates and receiving approvals, votes, or
consents hereunder) and shall consider such clearing agency as the Preferred
Partner and sole holder of the Certificates and shall have no obligations to
the Preferred Partner Interest Owners;
(c) The rights of the Preferred Partner Interest Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Partner Interest
Owners and the Clearing Agency and/or the Clearing Agency Participants. Unless
or until the Definitive Certificates are issued pursuant to Section 14.06, the
initial Clearing Agency will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of distributions on the
Certificates to such Clearing Agency Participants;
(d) To the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control; and
(e) Whenever this Agreement requires or permits actions to be taken based
upon approvals, votes, or consents of a percentage of the Preferred Partners,
the Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from the Preferred
Partner Interest Owners and/or Clearing Agency participants owning or
representing, respectively, such required percentage of the beneficial
interests in the Certificates and has delivered such instructions to the
General Partner.
Section 14.05. Notices to Clearing Agency. Whenever a notice or other
communication to the Preferred Partners is required under this Agreement,
unless and until Definitive Certificates shall have been issued pursuant to
Section 14.06, the General Partner shall give all such notices and
communications specified herein to be given to the Preferred Partners to the
Clearing Agency, and shall have no obligations to the Preferred Partner
Interest Owners.
Section 14.06. Definitive Certificates. If (1) the Clearing Agency elects
to discontinue its services as securities depository and gives reasonable
notice to the Partnership and a successor Clearing Agency is not obtained by
the Partnership to act as securities depository, or (2) the Partnership elects
to terminate the book entry system through the initial Clearing Agency or any
successor Clearing Agency, then the Definitive Certificates shall be prepared
by the Partnership. Upon surrender of the typewritten Certificate or
Certificates representing the Book Entry Interests by the Clearing Agency,
accompanied by registration instructions, the General Partner shall cause the
Definitive Certificates to be delivered to the Preferred Partner Interest
Owners in accordance with the instructions of the Clearing Agency. The General
Partner shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Any Person receiving a Definitive Certificate in accordance with
this Article XIV shall be admitted to the Partnership as a Preferred Partner
upon receipt of such Definitive Certificate. The Clearing Agency or the
nominee of the Clearing Agency, as the case may be, shall cease to be a Limited
Partner of the Partnership under this Section 14.06 at the time that at least
one additional Person is admitted to the Partnership as a Preferred Partner in
accordance with this Section 14.06. The Definitive Certificates shall be
<PAGE>
printed, lithographed, or engraved or may be produced in any other manner as is
reasonably acceptable to the General Partner, as evidenced by its execution
thereof.
In the event that the Partnership exercises its option to redeem only a
portion of the Preferred Partner Interests of any series, the Partnership may
cause the Certificate or certificates representing the Book Entry Interests to
be withdrawn from the Clearing Agency and issue Definitive Certificates
representing the Preferred Partner Interests of such series. The General
Partner will appoint a registrar, transfer agent, and paying agent for
Preferred Partner Interests represented by Definitive Certificates.
Registration of transfers of Preferred Partner Interests represented by
Definitive Certificates will be effected without charge by or on behalf of the
Partnership, but upon payment of any tax or other governmental charges which
may be imposed in relation to it. The Partnership will not be required to
register or cause to be registered the transfer of Preferred Partner Interests
represented by Definitive Certificates after such Preferred Partner Interests
have been called for redemption.
ARTICLE XV
GENERAL
Section 15.01. Power of Attorney. (a) The Class A Limited Partner and
each Preferred Partner constitutes and appoints the General Partner and the
Liquidating Trustee as its true and lawful representative and attorney-in-fact,
in its name, place, and stead, to make, execute, sign, acknowledge, and deliver
or file (1) all instruments, documents, and certificates which may from time to
time be required by any law to effectuate, implement and continue the valid and
subsisting existence of the Partnership, (2) all instruments, documents, and
certificates that may be required to effectuate the dissolution and termination
of the Partnership in accordance with the provisions hereof and Delaware law,
(3) all other amendments of this Agreement or the Certificate of Limited
Partnership and other filings contemplated by this Agreement, including without
limitation amendments reflecting the withdrawal of the General Partner, or the
return, in whole or in part, of the contribution of any Partner, or the
addition, substitution, or increased contribution of any Partner, or any action
of the Partners duly taken pursuant to this Agreement whether or not such
Partner voted in favor of or otherwise approved such action, and (4) any other
instrument, certificate, or document required from time to time to admit a
Partner, to effect its substitution as a Partner, to effect the substitution of
the Partner's assignee as a Partner, or to reflect any action of the Partners
provided for in this Agreement.
(b) The powers of attorney granted herein (1) shall be deemed to be
coupled with an interest, shall be irrevocable, and shall survive the death,
insanity, incompetency, or incapacity (or, in the case of a Partner that is a
corporation, association, partnership, limited liability company or trust,
shall survive the merger, dissolution, or other termination of existence) of
the Partner and (2) shall survive the assignment by the Partner of the whole or
any portion of his Interest, except that where the assignee of the whole or any
portion thereof has furnished a power of attorney, this power of attorney shall
survive such assignment for the sole purpose of enabling the General Partner
and the Liquidating Trustee to execute, acknowledge, and file any instrument
necessary to effect any permitted substitution of the assignee for the assignor
as a Partner and shall thereafter terminate. In the event that the appointment
conferred in this Section 15.01 would not constitute a legal and valid
<PAGE>
appointment by any Partner under the laws of the jurisdiction in which such
Partner is incorporated, established, or resident, upon the request of the
General Partner or the Liquidating Trustee, such Partner shall deliver to the
General Partner or the Liquidating Trustee a properly authenticated and duly
executed document constituting a legal and valid power of attorney under the
laws of the appropriate jurisdiction covering the matters set forth in this
Section 15.01.
(c) The General Partner may require a power of attorney to be executed by
a transferee of a Partner as a condition of its admission as a substitute
Partner.
Section 15.02. Waiver of Partition. Each Partner hereby irrevocably
waives any and all rights that it may have to maintain an action for partition
(or any action in the nature of partition) of any of the Partnership's property
or assets.
Section 15.03. Notices. Any notice or communication to a Partner
permitted or required to be given hereunder shall be in writing and delivered
in person or mailed by first-class mail, postage prepaid. Any such notice or
communication shall be deemed given if in writing and delivered (1) on the date
it was delivered in person to a Partner, receipt acknowledged, at its address
appearing on the books and records of the Partnership, or (2) on the day it is
first mailed to a Partner by first class mail, postage prepaid.
Section 15.04. Entire Agreement. This Agreement, including the exhibits
annexed hereto and incorporated by reference herein, contains the entire
agreement of the parties hereto and supersedes all prior agreements and
understandings, oral or otherwise, among the parties hereto with respect to the
matters contained herein.
Section 15.05. Waivers. Except as otherwise expressly provided herein, no
purported waiver by any party of any breach by another party of any of his
obligations, agreements, or covenants hereunder, or any part thereof, shall be
effective unless made in a writing executed by the party or parties sought to
be bound thereby, and no failure to pursue or elect any remedy with respect to
any default under or breach of any provision of this Agreement, or any part
hereof, shall be deemed to be a waiver of any other subsequent similar or
different default or breach, or any election of remedies available in
connection therewith, nor shall the acceptance or receipt by any party of any
money or other consideration due him under this Agreement, with or without
knowledge of any breach hereunder, constitute a waiver of any provision of this
Agreement with respect to such or any other breach.
Section 15.06. Headings. The section headings herein contained have been
inserted only as a matter of convenience of reference and in no way define,
limit, or describe the scope or intent of any provisions of this Agreement nor
in any way affect any such provisions.
Section 15.07. Separability. Each provision of this Agreement shall be
considered to be separable, and if, for any reason, any such provision or
provisions, or any part thereof, is determined to be invalid and contrary to
any existing or future applicable law, such invalidity shall not impair the
operation of, or affect, those portions of this Agreement which are valid, and
this Agreement shall be construed and enforced in all respects as if such
invalid or unenforceable provision or provisions had been omitted.
<PAGE>
Section 15.08. Contract Construction. Whenever the content of this
Agreement permits, the masculine gender shall include the feminine and neuter
genders, and reference to singular or plural shall be interchangeable with the
other. References in this Agreement to particular sections of the Code or to
provisions of the Delaware Act shall be deemed to refer to such sections or
provisions as they may be amended after the date of this Agreement.
Section 15.09. Counterparts. This Agreement may be executed in one or
more counterparts and each of such counterparts for all purposes shall be
deemed to be an original, but all of such counterparts, when taken together,
shall constitute but one and the same instrument, binding upon all parties
hereto, notwithstanding that all of such parties may not have executed the same
counterpart.
Section 15.10. Benefit. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
but shall not be deemed for the benefit of creditors or any other Persons, nor
shall it be deemed to permit any assignment by a Partner of any of its rights
or obligations hereunder except as expressly provided herein.
Section 15.11. Further Actions. Each of the Partners hereby agrees that
it shall hereafter execute and deliver such further instruments and do such
further acts and things as may be required or useful to carry out the intent
and purposes of this Agreement and as are not inconsistent with the terms
hereof.
Section 15.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Delaware,
without regard to conflicts of laws.
Section 15.13. Amendments. Except as otherwise expressly provided herein
or as otherwise required by law, this Agreement may only be amended by a
written instrument executed by the General Partner; provided, however, that any
amendment which would adversely affect the powers, preferences, or special
rights of any series of Preferred Partner Interests may be effected only as
permitted by the terms of such series of Preferred Partner Interests.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
General Partner:
THE CONNECTICUT LIGHT AND POWER
COMPANY
By _________________________________
Name:
Title:
Class A Limited Partner,
solely to reflect its withdrawal from the Partnership:
NORTHEAST UTILITIES SERVICE COMPANY
By _________________________________
Name:
Title:
<PAGE>
Exhibit A
Certificate No. _____ CUSIP No. _____
Certificate Evidencing Preferred Partner Interests
of
CL&P Capital, L.P.
__% Cumulative Monthly Income Preferred Securities,
Series __
Liquidation preference $25 per Preferred Partner Interest
CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
___________ (______________) fully paid Preferred Partner Interests of the
Partnership designated the __% Cumulative Monthly Income Preferred Securities,
Series ____ (liquidation preference $25 per Preferred Partner Interest) (the
"Series ____ Preferred Partner Interests") representing preferred limited
partner interests in the Partnership transferable on the books and records of
the Partnership, in person or by a duly authorized attorney, upon surrender of
this Certificate duly endorsed and in proper form for transfer. The powers,
preferences and special rights and limitations of the Series ____ Preferred
Partner Interests are set forth in, and this Certificate and the Series ____
Preferred Partner Interests represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Limited Partnership Agreement dated as of ___________, 199__ of the Partnership
as the same may, from time to time, be amended (the "Partnership Agreement")
authorizing the issuance of the Series __ Preferred Partner Interests and
determining, along with any actions of the General Partner of the Partnership
as authorized under the Partnership Agreement, the powers, preferences, and
other special rights and limitations, regarding distributions, voting,
redemption, and otherwise and other matters relating to the Series __ Preferred
Partner Interests. The Partnership will furnish a copy of the Partnership
Agreement to the Holder without charge upon written request to the Partnership
at its principal place of business or registered office. The Holder is
entitled to the benefits of the Payment and Guaranty Agreement of The
Connecticut Light and Power Company, dated as of _______, 199__ (the
"Guaranty") relating to the Preferred Partner Interests, and of the Indenture
between The Connecticut Light and Power Company and ____________________, as
Trustee, dated as of ____________, 199__ (the "Indenture"), under and pursuant
to which the related series of Subordinated Debentures are issued and
outstanding, in either case to the extent provided therein. The Holder is
further entitled to enforce such rights of the Partnership under the Indenture
to the extent provided therein and in the Partnership Agreement. The
<PAGE>
Partnership will furnish a copy of the Guaranty and the Indenture to the Holder
without charge upon written request to the Partnership at its principal place
of business or registered office.
The Holder, by accepting this Certificate, is deemed to have (1) agreed
that the Subordinated Debentures issued pursuant to the Indenture are
subordinate and junior in right of payment to all general liabilities of The
Connecticut Light and Power Company as and to the extent provided in the
Indenture and (2) agreed that the Guaranty is subordinate and junior in right
of payment to all general liabilities of The Connecticut Light and Power
Company. Upon receipt of this Certificate, the Holder is admitted to the
Partnership as a Preferred Partner, is bound by the Partnership Agreement and
is entitled to the benefits thereunder.
Capitalized terms used herein but not defined shall have the meaning given
them in the Partnership Agreement.
IN WITNESS WHEREOF, the Partnership has executed this Certificate this
____ day of ________________, 199__.
CL&P CAPITAL, L.P.
By The Connecticut Light and Power Company,
its General Partner
By_________________________________
Name:
Title:
<PAGE>
ACTION BY THE GENERAL PARTNER OF
CL&P CAPITAL, L.P.
CREATING THE ____% CUMULATIVE MONTHLY INCOME
PREFERRED SECURITIES, SERIES A
Dated as of ___________ __, 199_
Pursuant to Section 13.01 of the Amended and Restated Limited Partnership
Agreement of CL&P Capital, L.P. dated ____________ __, 199__ (as amended from
time to time, the "Partnership Agreement"), The Connecticut Light and Power
Company ("CL&P"), as general partner (the "General Partner") of CL&P Capital,
L.P. (the "Partnership"), desiring to state the designations, rights,
privileges, restrictions, preferences, voting rights, and other terms and
conditions of a new series of Preferred Partner Interests, hereby authorizes
and establishes such new series of Preferred Partner Interests having the
designations, rights, privileges, restrictions, and other terms and provisions
set forth below. Each capitalized term used but not defined herein shall have
the meaning set forth in the Partnership Agreement.
(a) Designation. [*****Number of interests in the series*****] interests
of the Partnership with an aggregate liquidation preference of $ [***** $25
times number of interests in the series *****] of the Preferred Partner
Interests of the Partnership, and a liquidation preference of $25 per Preferred
Partner Interest, are hereby designated as "__% Cumulative Monthly Income
Preferred Securities, Series A" (hereinafter the "Series A Preferred Partner
Interests"). The Certificates evidencing the Series A Preferred Partner
Interests shall be substantially in the form attached hereto as Exhibit A. The
proceeds of the Series A Preferred Partner Interests shall be loaned to CL&P in
return for the __% Subordinated Debentures, Series A, due 20__ of CL&P issued
pursuant to an Indenture dated as of _______________, 199_ between CL&P and
Bankers Trust Company, as Trustee (the "Indenture") and bearing interest at an
annual rate equal to the annual distribution rate on the Series A Preferred
Partner Interests and having certain payment and redemption provisions which
correspond to the payment and redemption provisions of the Series A Preferred
Partner Interests (the "Series A Debentures").
(b) Distributions on the Series A Preferred Partner Interests.
(1) The Preferred Partners who hold the Series A Preferred
Partner Interests shall be entitled to receive, to the extent set
forth in paragraph (b)(2) hereof, cumulative, preferential cash
distributions at a rate per annum of ___% of the stated liquidation
preference of $25 per Series A Preferred Partner Interest, calculated
in accordance with Section 13.02(a)(1) of the Partnership Agreement
("Series A Preferred Partner Distributions"). Series A Preferred
Partner Distributions will be payable in United States dollars
<PAGE>
-2-
monthly in arrears on the last day of each calendar month of each
year; provided, however, that in the event that any date on which
Series A Preferred Partner Distributions are payable is not a
Business Day, then payment of such Series A Preferred Partner
Distributions will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date. The Series A Preferred Partner
Distributions will be cumulative from the date of original issue, and
the cumulative portion from such date to _____________ __, 199__
shall be payable on ______________ __, 19__.
(2) Series A Preferred Partner Distributions shall be paid to
the extent that the Partnership has (x) funds on hand legally
available therefor, as determined by the General Partner, and (y)
cash on hand sufficient to permit such payments. Series A Preferred
Partner Distributions will be deferred if and for so long as CL&P
defers interest payments to the Partnership on the Series A
Debentures. Accrued and unpaid Series A Preferred Partner
Distributions will accrue additional distributions after the
scheduled payment date therefor ("Additional Distributions") in
respect thereof, to the extent permitted by law, at the distribution
rate per annum for the Series A Preferred Partner Interests. Such
Additional Distributions shall be payable at the time the related
deferred Series A Preferred Partner Distribution is paid, but in any
event by the end of such deferral period. Series A Preferred Partner
Distributions will be payable to the Series A Preferred Partners as
they appear on the books and records of the Partnership on the
relevant record dates, which will be one Business Day prior to the
relevant payment dates; provided, however, that if the Series A
Preferred Partner Interests are not held by a securities depositary,
the General Partner shall have the right to change such record dates.
(c) Redemption.
(1) The Series A Preferred Partner Interests are subject to
redemption at the option of the General Partner, in whole or in part,
from time to time, on or after _________ __, ____, at the redemption
price of $25 per Series A Preferred Partner Interest plus accumulated
and unpaid Series A Preferred Partner Distributions to the date fixed
for redemption, together with any accrued Additional Distributions
thereon (the "Redemption Price").
(2) Upon redemption or payment at maturity of the Series A
Debentures, the proceeds from such redemption or payment of the
Series A Debentures shall be applied to redeem the Series A Preferred
Partner Interests at the Redemption Price.
<PAGE>
-3-
(3) If at any time after the issuance of the Series A Preferred
Partner Interests, an Investment Company Act Event shall occur and be
continuing, the General Partner shall (A) cause the Partnership to
redeem the Series A Preferred Partner Interests at the Redemption
Price, within 90 days following the occurrence of such Special Event,
or (B) dissolve the Partnership and cause the Partnership to
distribute the Series A Debentures to Holders of Series A Preferred
Partner Interests in liquidation of the Partnership within 90 days
following the occurrence of such Special Event; provided, however,
that in the case of clause (B) above, the Partnership shall have
received an opinion of counsel (which may be regular tax counsel to
the Partnership or an affiliate, but not an employee thereof) to the
effect that such Holders will not recognize any gain or loss for
United States federal income tax purposes as a result of such
distribution.
(4) If at any time after the issuance of the Series A Preferred
Partner Interests, a Tax Event shall occur and be continuing, the
General Partner may (A) cause the Partnership to redeem the Series A
Preferred Partner Interests at the Redemption Price, within 90 days
following the occurrence of such Special Event, or (B) dissolve the
Partnership and cause the Partnership to distribute the Series A
Debentures to Holders of Series A Preferred Partner Interests in
liquidation of the Partnership within 90 days following the
occurrence of such Special Event; provided, however, that in the case
of clause (B) above, the Partnership shall have received an opinion
of counsel (which may be regular tax counsel to the Partnership or an
affiliate, but not an employee thereof) to the effect that such
Holders will not recognize any gain or loss for United States federal
income tax purposes as a result of such distribution.
(d) Liquidation Distribution.
(1) In the event of any voluntary or involuntary dissolution,
liquidation or winding up of the Partnership, holders of the Series A
Preferred Partner Interests at the time outstanding will be entitled
to receive out of the assets of the Partnership available for
distribution to holders of Preferred Partner Interests, after
satisfaction of liabilities to creditors as required by the Delaware
Act and before any distribution of assets is made to holders of the
general partner interests, but together with holders of every other
series of Preferred Partner Interests outstanding, an amount equal
to, in the case of holders of Series A Preferred Partner Interests,
the aggregate of the stated liquidation preference of $25 per Series
A Preferred Partner Interest plus accumulated and unpaid
distributions and Additional Distributions to the date of payment
(the "Liquidation Distribution").
(2) Notwithstanding the foregoing, the General Partner may
distribute the Series A Debentures to Holders of Series A Preferred
Partner Interests in liquidation of the Partnership pursuant to
<PAGE>
-4-
paragraph (c)(3)(B) or (c)(4)(B) hereof. After the date fixed for
any such distribution, upon dissolution of the Partnership, (i) the
Series A Preferred Partner Interests will no longer be deemed to be
outstanding, (ii) DTC or its nominee, as the record Holder of the
Series A Preferred Partner Interests, will return the registered
global certificate or certificates representing the Series A
Preferred Partner Interests and will receive a registered global
certificate or certificates representing the Series A Debentures to
be delivered upon such distribution, and (iii) any certificates
representing Series A Preferred Partner Interests not held by DTC or
its nominee will be deemed to represent Series A Debentures having a
principal amount and accrued and unpaid interest equal to the
aggregate of the stated liquidation preference of, and accrued and
unpaid Distributions on, such Series A Preferred Partner Interests
until such certificates are presented to the General Partner or its
agent for transfer or reissuance.
(e) Voting Rights. The holders of the Series A Preferred Partner
Interests shall have no voting rights except as provided in the Partnership
Agreement.
(f) Withholding. All payments by the Partnership in respect of the
Series A Preferred Partner Interests will be made without withholding or
deduction on account of any present or future taxes, duties or assessments
imposed by the United States or any state thereof, unless such withholding or
deduction is required by law.
(g) Subordination. The holders of Series A Preferred Partner Interests
are deemed, by acceptance of such Interests, to have (1) agreed that the Series
A Debentures issued pursuant to the Indenture are subordinate and junior in
right of payment to all general liabilities of CL&P as and to the extent
provided in the Indenture and (2) agreed that the Guaranty relating to the
Series A Preferred Partner Interests is subordinated and junior in right of
payment to all general liabilities of CL&P.
<PAGE>
-5-
IN WITNESS WHEREOF, the General Partner has executed this Action as of the
date and year first above written.
THE CONNECTICUT LIGHT AND POWER COMPANY,
as General Partner
By_________________________________
Name:
Title:
<PAGE>
Exhibit A
Certificate No. _____ CUSIP No. _____
Certificate Evidencing Preferred Partner Interests
of
CL&P Capital, L.P.
__% Cumulative Monthly Income Preferred Securities,
Series A
Liquidation preference $25 per Preferred Partner Interest
CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
___________ (______________) fully paid Preferred Partner Interests of the
Partnership designated the __% Cumulative Monthly Income Preferred Securities,
Series A (liquidation preference $25 per Preferred Partner Interest) (the
"Series A Preferred Partner Interests") representing preferred limited partner
interests in the Partnership transferable on the books and records of the
Partnership, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer. The powers,
preferences and special rights and limitations of the Series A Preferred
Partner Interests are set forth in, and this Certificate and the Series A
Preferred Partner Interests represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Limited Partnership Agreement dated as of ___________, 199__ of the Partnership
as the same may, from time to time, be amended (the "Partnership Agreement")
authorizing the issuance of the Series A Preferred Partner Interests and
determining, along with any actions of the General Partner of the Partnership
as authorized under the Partnership Agreement, the powers, preferences, and
other special rights and limitations, regarding distributions, voting,
redemption, and otherwise and other matters relating to the Series A Preferred
Partner Interests. The Partnership will furnish a copy of the Partnership
Agreement to the Holder without charge upon written request to the Partnership
at its principal place of business or registered office. The Holder is
entitled to the benefits of the Payment and Guaranty Agreement of The
Connecticut Light and Power Company, dated as of _______, 199__ (the
"Guaranty") relating to the Preferred Partner Interests, and of the Indenture
between The Connecticut Light and Power Company and ____________________, as
Trustee, dated as of ____________, 199__ (the "Indenture"), under and pursuant
to which the related series of Subordinated Debentures are issued and
<PAGE>
-2-
outstanding, in either case to the extent provided therein. The Holder is
further entitled to enforce such rights of the Partnership under the Indenture
to the extent provided therein and in the Partnership Agreement. The
Partnership will furnish a copy of the Guaranty and the Indenture to the Holder
without charge upon written request to the Partnership at its principal place
of business or registered office.
The Holder, by accepting this Certificate, is deemed to have (1) agreed
that the Subordinated Debentures issued pursuant to the Indenture are
subordinate and junior in right of payment to all general liabilities of The
Connecticut Light and Power Company as and to the extent provided in the
Indenture and (2) agreed that the Guaranty is subordinate and junior in right
of payment to all general liabilities of The Connecticut Light and Power
Company. Upon receipt of this Certificate, the Holder is admitted to the
Partnership as a Preferred Partner, is bound by the Partnership Agreement and
is entitled to the benefits thereunder.
Capitalized terms used herein but not defined shall have the meaning given
them in the Partnership Agreement.
IN WITNESS WHEREOF, the Partnership has executed this Certificate this
____ day of ________________, 199__.
CL&P CAPITAL, L.P.
By The Connecticut Light and Power Company,
its General Partner
By_________________________________
Name:
Title:
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit A.2
_________________________________________________________________
_________________________________________________________________
__________________________________________
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
WMECO CAPITAL, L.P.
Dated as of ________ __, 199__
__________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - CONTINUATION; NAME; PURPOSES; TERM; ETC. . . . . . . . . . . . 6
Section 2.01. Formation . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02. Name, Place of Business and Registered Agent . . . . . 6
Section 2.03. Purposes . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.04. Term . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.05. Qualification in Other Jurisdictions . . . . . . . . . 6
Section 2.06. Admission of Preferred Partners . . . . . . . . . . . . 7
Section 2.07. Records . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.08. Withdrawal of Class A Limited Partner . . . . . . . . . 7
ARTICLE III - CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 7
Section 3.01. Capital Contributions . . . . . . . . . . . . . . . . . 7
Section 3.02. Additional Capital Contributions . . . . . . . . . . . 7
Section 3.03. No Interest or Withdrawals . . . . . . . . . . . . . . 7
Section 3.04. Minimum Capital Account Balance of General Partner . . 7
Section 3.05. Partnership Interests . . . . . . . . . . . . . . . . . 8
Section 3.06. Interests . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV - CAPITAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.01. Capital Accounts . . . . . . . . . . . . . . . . . . . 8
Section 4.02. Compliance with Treasury Regulations . . . . . . . . . 8
ARTICLE V - ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.01. Profits and Losses . . . . . . . . . . . . . . . . . . 8
Section 5.02. Allocation Rules . . . . . . . . . . . . . . . . . . . 9
Section 5.03. Adjustments to Reflect Changes in Interests . . . . . . 9
Section 5.04. Tax Allocations . . . . . . . . . . . . . . . . . . . . 9
Section 5.05. Qualified Income Offset . . . . . . . . . . . . . . . . 9
Section 5.07. Minimum Allocations to General Partner . . . . . . . . 10
Section 5.08. Taxpayer Information . . . . . . . . . . . . . . . . . 10
ARTICLE VI - DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.01. Distributions . . . . . . . . . . . . . . . . . . . . . 10
Section 6.02. Certain Distributions Prohibited . . . . . . . . . . . 10
ARTICLE VII - ACCOUNTING MATTERS; BANKING . . . . . . . . . . . . . . . . . 11
Section 7.01. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.02. Certain Accounting Matters . . . . . . . . . . . . . . 11
Section 7.03. Banking . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.04. Right to Rely on Authority of General Partner . . . . . 12
Section 7.05. Tax Matters Partner . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII - MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.01. Management . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.02. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . 13
Section 8.03. Specific Obligations of the General Partner . . . . . . 14
Section 8.04. Powers of the General Partner . . . . . . . . . . . . . 14
Section 8.05. Independent Affairs . . . . . . . . . . . . . . . . . . 15
Section 8.06. Meetings of the Partners . . . . . . . . . . . . . . . 15
Section 8.07. Net Worth of the General Partner . . . . . . . . . . . 16
Section 8.08. Restrictions on General Partner . . . . . . . . . . . . 16
ARTICLE IX - LIABILITY AND INDEMNIFICATION . . . . . . . . . . . . . . . . 17
<PAGE>
Section 9.01. Partnership Expenses and Liabilities . . . . . . . . . 17
Section 9.02. No Liability . . . . . . . . . . . . . . . . . . . . . 17
Section 9.03. Indemnification . . . . . . . . . . . . . . . . . . . . 17
ARTICLE X - WITHDRAWAL; TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . 18
Section 10.01. Transfer by General Partner; Admission of Substituted
General Partner . . . . . . . . . . . . . . . . . . . . 18
Section 10.02. Withdrawal of Limited Partners . . . . . . . . . . . . 18
ARTICLE XI - DISSOLUTION OF THE PARTNERSHIP . . . . . . . . . . . . . . . . 19
Section 11.01. No Dissolution . . . . . . . . . . . . . . . . . . . . 19
Section 11.02. Events Causing Dissolution . . . . . . . . . . . . . . 19
Section 11.03. Notice of Dissolution . . . . . . . . . . . . . . . . . 19
ARTICLE XII - LIQUIDATION OF PARTNERSHIP INTERESTS . . . . . . . . . . . . 20
Section 12.01. Liquidation . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.02. Termination . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.03. Duty of Care . . . . . . . . . . . . . . . . . . . . . 20
Section 12.04. No Liability for Return of Capital . . . . . . . . . . 20
ARTICLE XIII - PREFERRED PARTNER INTERESTS . . . . . . . . . . . . . . . . 21
Section 13.01. Preferred Partner Interests. . . . . . . . . . . . . . 21
Section 13.02. Terms of All Preferred Partner Interests . . . . . . . 23
ARTICLE XIV - TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 14.01. Transfers of Preferred Partner Interests . . . . . . . 28
Section 14.02. Transfer of Certificates . . . . . . . . . . . . . . . 28
Section 14.03. Persons Deemed Preferred Partners . . . . . . . . . . . 29
Section 14.04. Book Entry Interests . . . . . . . . . . . . . . . . . 29
Section 14.05. Notices to Clearing Agency . . . . . . . . . . . . . . 30
Section 14.06. Definitive Certificates . . . . . . . . . . . . . . . . 30
ARTICLE XV - GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 15.01. Power of Attorney . . . . . . . . . . . . . . . . . . . 31
Section 15.02. Waiver of Partition . . . . . . . . . . . . . . . . . . 31
Section 15.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 15.04. Entire Agreement . . . . . . . . . . . . . . . . . . . 32
Section 15.05. Waivers . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.06. Headings . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.07. Separability . . . . . . . . . . . . . . . . . . . . . 32
Section 15.08. Contract Construction . . . . . . . . . . . . . . . . . 32
Section 15.09. Counterparts . . . . . . . . . . . . . . . . . . . . . 32
Section 15.10. Benefit . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.11. Further Actions . . . . . . . . . . . . . . . . . . . . 33
Section 15.12. Governing Law . . . . . . . . . . . . . . . . . . . . . 33
Section 15.13. Amendments . . . . . . . . . . . . . . . . . . . . . . 33
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibit A Form of Certificate
<PAGE>
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
WMECO CAPITAL, L.P.
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of
_________, 199__, of WMECO Capital, L.P., a Delaware limited partnership (the
"Partnership"), is made by and among Western Massachusetts Electric Company
("WMECO"), as general partner of the Partnership, Northeast Utilities Service
Company ("NUSCO") as Class A Limited Partner, and the Persons (as defined
below) who become limited partners of the Partnership in accordance with the
provisions hereof.
WHEREAS, WMECO and NUSCO have heretofore formed a limited partnership
pursuant to the Delaware Act (as defined below) by filing a Certificate of
Limited Partnership (as defined below) with the Secretary of State of the State
of Delaware on __________ __, 199__, and entering into a Limited Partnership
Agreement of the Partnership dated as of__________ __, 199__ (the "Limited
Partnership Agreement");
WHEREAS, the parties hereto desire to continue the Partnership as a
limited partnership under the Delaware Act and to amend and restate the Limited
Partnership Agreement in its entirety.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree to amend and restate the Limited Partnership Agreement in its entirety as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, each of the following terms shall have the
meaning set forth below (such meaning to be equally applicable to both singular
and plural forms of the terms so defined).
"Action" shall have the meaning set forth in Section 13.01(b).
"Affiliate" shall mean, with respect to the Person to which it refers, a
Person that directly or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, such subject Person.
"Agreement" shall mean this Amended and Restated Limited Partnership
Agreement, as amended, modified, supplemented, or restated from time to time,
including, without limitation, by any Action establishing a series of Preferred
Partner Interests.
"Book Entry Interests" shall mean a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 14.04.
"Business Day" shall mean any day that is not a Saturday, a Sunday, or a
day on which banking institutions in The City of New York, the Commonwealth of
Massachusetts, the State of Connecticut, or the State of Delaware are
authorized or required to close.
"Capital Account" shall have the meaning set forth in Section 4.01.
<PAGE>
"Certificate" shall mean a certificate substantially in the form attached
hereto as Exhibit A, evidencing a Preferred Partner Interest.
"Certificate of Limited Partnership" shall mean the Certificate of Limited
Partnership of the Partnership and any and all amendments thereto and
restatements thereof filed with the Secretary of State of the State of
Delaware.
"Change in 1940 Act Law" shall mean the occurrence of a change, effective
on or after the date of issuance of one or more series of Preferred Partner
Interests, in law or regulation or a change in official interpretation of law
or regulation by any legislative body, court, governmental agency, or
regulatory authority to the effect that the Partnership is or will be
considered an "investment company" which is required to be registered under the
1940 Act.
"Class A Limited Partner" shall mean NUSCO, in its capacity as a limited
partner of the Partnership.
"Clearing Agency" shall mean an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker dealer, bank, other
financial institution, or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"WMECO" shall mean Western Massachusetts Electric Company and its
successors.
"Code" shall mean the United States Internal Revenue Code of 1986 and
(unless the context requires otherwise) the rules and regulations promulgated
thereunder, as amended from time to time.
"Commission" shall mean the Securities and Exchange Commission.
"Covered Person" shall mean any Partner, the Special Representative, or
any Affiliate thereof, or any officers, directors, shareholders, partners,
members, employees, representatives or agents of a Partner, the Special
Representative or their respective Affiliates, or any employee or agent of the
Partnership or its Affiliates.
"Definitive Certificate" shall have the meaning set forth in Section
14.04.
"Delaware Act" shall mean the Delaware Revised Uniform Limited Partnership
Act, 6 Del.C. Section 17-101, et seq. as amended from time to time or any
successor statute thereto.
"Economic Risk of Loss" shall mean the "economic risk of loss" that any
Partner is treated as bearing under Treasury Regulation Section 1.752-2 with
respect to any Partnership liability.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fiscal Year" shall have the meaning set forth in Section 7.01.
"General Partner" shall mean WMECO, in its capacity as general partner of
the Partnership, together with any successor thereto that becomes a general
partner of the Partnership pursuant to the terms of this Agreement.
<PAGE>
"Guaranty" shall mean the Payment and Guaranty Agreement dated as of
______, 199__, as amended or supplemented from time to time, of WMECO.
"Indemnified Person" shall mean the General Partner or the Special
Representative, any Affiliate thereof, or any officers, directors,
shareholders, partners, members, employees, representatives, or agents thereof,
or any employee or agent of the Partnership or its Affiliates.
"Indenture" shall mean the Indenture dated as of __________, 199__, as
amended or supplemented from time to time, between WMECO and Bankers Trust
Company, as Trustee, and any supplemental Indentures thereto entered into by
WMECO pursuant to which Subordinated Debentures of WMECO are to be issued.
"Interest" shall mean the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement.
"Investment Company Act Event" shall mean, with respect to any series of
Preferred Partner Interests, the occurrence of a Change in 1940 Act Law without
the Partnership having received, within 45 days after such Change in 1940 Act
Law, an opinion of counsel (which may be regular counsel to WMECO or an
Affiliate, but not an employee thereof) experienced in such matters, to the
effect that WMECO and/or the Partnership has taken reasonable measures within
its discretion to avoid such Change in 1940 Act Law so that notwithstanding
such Change in 1940 Act Law, the Partnership is not required to be registered
as an "investment company" within the meaning of the 1940 Act.
"Limited Partners" shall mean the Class A Limited Partner, if any, and the
Preferred Partners.
"Liquidating Distributions" shall mean distributions of Partnership
property made upon a liquidation and dissolution of the Partnership as provided
in Article XII.
"Liquidating Trustee" shall have the meaning set forth in Section 12.01.
"Liquidation Distribution" shall mean the liquidation preference of each
series of Preferred Partner Interests as set forth in the Action for such
series.
"Loss Items" shall mean, with respect to any fiscal period, items of gross
Partnership loss, deduction, or expense for such period.
"Net Income" or "Net Loss" shall mean, with respect to any Fiscal Year,
the sum of the Partnership's (a) net gain or loss from the sale or exchange of
the Partnership's capital assets during such Fiscal Year, and (b) all other
items of income, gain, loss, deduction, and expense for such Fiscal Year that
are not included in (a). For purposes of determining the Capital Accounts as
set forth in Article IV, "Net Income" and "Net Loss" shall be computed in the
same manner as the Partnership computes its income for United States federal
income tax purposes, except that adjustments shall be made in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv), which adjustments shall include
any income which is exempt from United States federal income tax, all
Partnership losses and all expenses properly chargeable to the Partnership,
whether deductible or non-deductible and whether described in Section
705(a)(2)(B) of the Code, treated as so described pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), or otherwise, and a distribution in
<PAGE>
kind of Partnership property shall be treated as a taxable disposition of such
property for its fair market value (taking into account Section 7701(g) of the
Code) on the date of distribution.
"1940 Act" shall mean the Investment Company Act of 1940, as amended.
"NUSCO" shall mean Northeast Utilities Service Company and its successors.
"Notice of Redemption" shall have the meaning set forth in Section
13.02(b)(i).
"Partners" shall mean the General Partner and the Limited Partners.
"Partnership" shall mean WMECO Capital, L.P., a limited partnership formed
under the laws of the State of Delaware.
"Person" shall mean any individual, general partnership, limited
partnership, corporation, limited liability company, joint venture, trust,
business trust, cooperative, or association, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such Person
where the context so admits.
"Preferred Partner" shall mean a limited partner of the Partnership who
holds one or more Preferred Partner Interests.
"Preferred Partner Distribution" shall have the meaning set forth in
Section 13.02(a)(1).
"Preferred Partner Interest Owner" shall mean, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Partner Interests" shall mean the Interests described in
Article XIII.
"Purchase Price" shall mean the amount paid to the Partnership for each
Preferred Partner Interest.
"Redemption Price" shall have the meaning set forth in Section
13.01(b)(v).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Special Representative" shall have the meaning set forth in Section
13.02(d).
"Subordinated Debentures" shall mean the Junior Subordinated Deferrable
Interest Debentures of WMECO issued under the Indenture.
"Successor Securities" shall have the meaning set forth in Section
13.02(e).
"Tax Event" shall mean, with respect to any series of Preferred Partner
Interests, that the Partnership shall have received an opinion of counsel
(which may be regular tax counsel to WMECO or an Affiliate, but not an employee
thereof) experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
<PAGE>
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such interpretation or pronouncement is announced on or after the
date of issuance of such series of Preferred Partner Interests, there is more
than an insubstantial risk that (1) the Partnership is subject to United States
federal income tax with respect to interest received on the related
Subordinated Debentures or the Partnership will otherwise not be taxed as a
Partnership or (2) interest payable by WMECO to the Partnership on the related
Subordinated Debentures is not deductible for United States federal income tax
purposes or (3) the Partnership is subject to more than a de minimis amount of
other taxes, duties, or other governmental charges.
"Tax Matters Partner" shall have the meaning set forth in Section 7.05.
"Transfer" shall mean any transfer, sale, assignment, gift, pledge,
hypothecation, or other disposition or encumbrance of an interest in the
Partnership.
"Treasury Regulations" shall mean the final and temporary income tax
regulations, as well as the procedural and administrative regulations,
promulgated by the United States Department of the Treasury under the Code, as
amended from time to time.
"Trustee" shall mean Bankers Trust Company, or any successor Trustee under
the Indenture.
"Underwriting Agreement" shall mean the Underwriting Agreement dated
_____________, 199__, among the Partnership, WMECO and the underwriters named
therein with regard to the sale of Preferred Partner Interests and related
securities and any additional Underwriting Agreements entered into by the
Partnership and WMECO with regard to the sale of additional Preferred Partner
Interests and related securities.
ARTICLE II
CONTINUATION; NAME; PURPOSES; TERM; ETC.
Section 2.01. Formation. The parties hereto hereby join together to
continue a limited partnership which shall exist under and be governed by the
Delaware Act. The Partnership shall make any and all filings or disclosures
required under the laws of Delaware or otherwise with respect to its
continuation as a limited partnership, its use of a fictitious name, or
otherwise as may be required. The Partnership shall be a limited partnership
among the Partners solely for the purposes specified in Section 2.03 hereof,
and this Agreement shall not be deemed to create a partnership among the
Partners with respect to any activities whatsoever other than the activities
within the business purposes of the Partnership as specified in Section 2.03.
No Partner shall have any power to bind any other Partner with respect to any
matter except as specifically provided in this Agreement. No Partner shall be
responsible or liable for any indebtedness or obligation of any other Partner
incurred either before or after the execution of this Agreement. The assets of
the Partnership shall be owned by the Partnership as an entity, and no Partner
individually shall own any direct interest in the assets of the Partnership.
Section 2.02. Name, Place of Business and Registered Agent. The name of
the Partnership is "WMECO Capital, L.P." The principal place of business of
the Partnership shall be Berlin, Connecticut or at such other place as may be
<PAGE>
selected by the General Partner in its sole discretion. The name and address
of the agent for service of process for the Partnership is:
Corporation Service Company
1013 Centre Road
Wilmington, DE 19805
Section 2.03. Purposes. The sole purposes of the Partnership are to
issue and sell Interests in the Partnership, including, without limitation,
Preferred Partner Interests, and to use the proceeds of all sales of Interests
in the Partnership (as well as all or a portion of the capital contributions to
the Partnership) to purchase Subordinated Debentures issued by WMECO pursuant
to the Indenture and to effect other similar arrangements permitted by this
Agreement, and to engage in any and all activities necessary, convenient,
advisable, or incidental thereto. The Partnership shall not borrow money or
issue debt or mortgage or pledge any of its assets.
Section 2.04. Term. The Partnership was formed on November __, 1994 and
shall continue without dissolution through November __, 2093, unless sooner
dissolved as provided in Article XI hereof.
Section 2.05. Qualification in Other Jurisdictions. The General Partner
shall cause the Partnership to be qualified, formed, or registered under
assumed or fictitious name statutes or similar laws in any jurisdiction in
which the Partnership transacts business. The General Partner shall execute,
deliver and file any certificates (and any amendments and/or restatements
thereof) necessary for the Partnership to qualify to do business in any
jurisdiction in which the Partnership may wish to conduct business.
Section 2.06. Admission of Preferred Partners. Upon receipt by a Person
of a Certificate and payment for the Preferred Partner Interest being acquired
by such Person, which shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect its admission as a
Preferred Partner, such Person shall be admitted to the Partnership as a
Preferred Partner and shall become bound by this Agreement without execution of
this Agreement.
Section 2.07. Records. The name and mailing address of, and the amount
contributed to the capital of the Partnership by, each Partner shall be listed
on the books and records of the Partnership. The Partnership shall keep such
other records as are required by Section 17-305 of the Delaware Act. The
General Partner shall update the books and records from time to time as
necessary to accurately reflect the information therein.
Section 2.08. Withdrawal of Class A Limited Partner. Upon the admission
of at least one Preferred Partner as a limited partner of the Partnership, the
Class A Limited Partner shall be deemed to have withdrawn from the Partnership
as a limited partner of the Partnership, and upon such withdrawal, the Class A
Limited Partner shall have its capital contribution returned to it without any
interest or deduction and shall have no further interest in the Partnership.
ARTICLE III
CAPITAL CONTRIBUTIONS
Section 3.01. Capital Contributions. As of the date of this Agreement,
the General Partner has contributed the amount of [*** $___________ ***] to the
capital of the Partnership and shall make any further contributions required to
satisfy its obligations under Section 3.04. Each Preferred Partner, or its
<PAGE>
predecessor in interest, will contribute to the capital of the Partnership the
amount of the Purchase Price for the Preferred Partner Interests held by it.
Section 3.02. Additional Capital Contributions. No Partner shall be
required to make any additional contributions or advances to the Partnership
except as provided in Section 3.04 or by law. The General Partner may make
additional capital contributions in excess of the amounts required under this
Agreement at any time.
Section 3.03. No Interest or Withdrawals. No interest shall accrue on
any capital contribution made by a Partner, and no Partner shall have the right
to withdraw or to be repaid any portions of its capital contributions so made,
except as specifically provided in this Agreement.
Section 3.04. Minimum Capital Account Balance of General Partner. At all
times throughout the term of the Partnership, the General Partner shall
maintain a Capital Account balance equal to at least 3% of the total positive
Capital Account balances for the Partnership. If necessary, the General
Partner shall immediately make additional contributions to satisfy those
requirements, which shall constitute additional capital contributions made by
the General Partner.
Section 3.05. Partnership Interests. Unless otherwise provided herein,
the percentage interests of the Partners shall be as determined in proportion
to the capital contributions of the Partners.
Section 3.06. Interests. Each Partner's respective Preferred Partner
Interests shall be set forth on the books and records of the Partnership. Each
Partner hereby agrees that its Interests shall for all purposes be personal
property. No Partner has an interest in specific Partnership property. The
Partnership shall not issue any additional interest in the Partnership after
the date hereof other than General Partner Interests or Preferred Partner
Interests.
ARTICLE IV
CAPITAL ACCOUNTS
Section 4.01. Capital Accounts. There shall be established on the books
of the Partnership a capital account (each a "Capital Account") for each
Partner that shall consist of the initial capital contribution to the
Partnership made by such Partner (or such Partner's predecessor in interest),
increased by: (a) any additional capital contributions made by such Partner
(or predecessor thereof), (b) the agreed value of any property subsequently
contributed to the capital of the Partnership by such Partner (or predecessor
thereof); and (c) Net Income allocated to any Partner (or predecessor thereof).
A Partner's Capital Account shall be decreased by: (a) Net Loss allocated to
any Partner (or predecessor thereof); and (b) any distributions made to such
Partner (or predecessor thereof). In addition to and notwithstanding the
foregoing, Capital Accounts shall be maintained at all times in accordance with
the capital account maintenance rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv).
Section 4.02. Compliance with Treasury Regulations. The foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Section 704(b) of
the Code and Treasury Regulation Section 1.704-1(b) and shall be interpreted
and applied in a manner consistent with such regulations. In the event that
the General Partner shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto, are determined in
<PAGE>
order to comply with such regulations, the General Partner may make such
modification.
ARTICLE V
ALLOCATIONS
Section 5.01. Profits and Losses. Each fiscal period, the Net Income of
the Partnership shall be allocated (1) first, to the Preferred Partners, pro
rata in proportion to the number of Preferred Partner Interests held by each
Preferred Partner and at the distribution rate specified in the Action for each
series of Preferred Partner Interests, in an amount equal to the excess of (a)
the Preferred Partner Distributions accrued on such Preferred Partner Interests
since their date of issuance through and including the close of the current
fiscal period (whether or not paid) over (b) the amount of Net Income allocated
to the Preferred Partners pursuant to clause (1) of this Section 5.01 in all
prior fiscal periods; and (2) thereafter, to the General Partner. Except in
connection with the dissolution and liquidation of the Partnership, the Net
Loss of the Partnership shall be allocated each year to the General Partner.
Upon a dissolution and liquidation of the Partnership, Net Loss shall be
allocated to each Preferred Partner in an amount equal to the excess of (a)
such Preferred Partner's Capital Account over (b) such Preferred Partner's
Liquidation Distribution (as defined with respect to each Preferred Partner's
Interest in the Action establishing such Preferred Partner Interests), with any
remaining Net Loss being allocated to the General Partner. Notwithstanding the
foregoing, any and all costs and expenses of the Partnership paid (or required
to be paid) by the General Partner pursuant to Section 8.03(c) shall be
allocated each Fiscal Year to the General Partner.
Section 5.02. Allocation Rules. For purposes of determining the profits,
losses, or any other items allocable to any period, profits, losses, and any
such other items shall be determined on a daily, monthly, or other basis, as
determined by the General Partner in its sole and absolute discretion using any
method that is permissible under Section 706 of the Code and the Treasury
Regulations thereunder. The Partners are aware of the income tax consequences
of the allocations made by this Article V and hereby agree to be bound by the
provisions of this Article V in reporting their shares of Partnership income
and loss for income tax purposes.
Section 5.03. Adjustments to Reflect Changes in Interests.
Notwithstanding the foregoing, with respect to any Fiscal Year during which any
Partner's percentage interest in the Partnership changes, whether by reason of
the admission of a Partner, the withdrawal of a Partner, a non-pro rata
contribution of capital to the Partnership or any other event described in
Section 706(d)(1) of the Code and the Treasury Regulations issued thereunder,
allocations of the items of income, gain, loss, and deduction of the
Partnership shall be adjusted appropriately to take into account the varying
interests of the Partners during such Fiscal Year. The General Partner shall
consult with the Partnership's accountants and other tax advisors and shall
select the method of making such adjustments, which method shall be used
consistently thereafter.
Section 5.04. Tax Allocations. For United States federal, state, and
local income tax purposes, Partnership income, gain, loss, deduction, or credit
(or any item thereof) for each Fiscal Year shall be allocated to and among the
Partners in order to reflect the allocations made pursuant to the provisions of
this Article V for such Fiscal Year (other than allocations of items which are
not deductible or are excluded from taxable income), taking into account any
variation between the adjusted tax basis and book value of Partnership property
in accordance with the principles of Section 704(c) of the Code.
<PAGE>
Section 5.05. Qualified Income Offset. Notwithstanding any other
provision hereof, if any Partner unexpectedly receives an adjustment,
allocation, or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6) which creates or increases a deficit in
the Capital Account of such Partner (and, for this purpose, the existence of a
deficit shall be determined by increasing the Partner's Capital Account by any
amounts that the Partner is obligated to restore to the Partnership pursuant to
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated
to restore pursuant to the penultimate sentence of Treasury Regulation Section
1.704-2(g)(1) and -2(i)(5), and reducing the Partner's Capital Account by the
items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5),
and (6)), the next available gross income of the Partnership shall be allocated
to the Partners having such deficit balances, in proportion to the deficit
balances, until such deficit balances are eliminated as quickly as possible.
The provisions of this Section 5.05 are intended to constitute a "qualified
income offset" within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and implemented as therein
provided.
Section 5.06. Nonrecourse Debt. While this Agreement does not provide
certain provisions required by Treasury Regulations Sections 1.704-1(b) and
1.704-2 because those provisions apply to transactions that are not expected to
occur, the Partners intend that the allocation under this Article V conform to
Treasury Regulations Sections 1.704-1(b) and 1.704-2 (including, without
limitation, the minimum gain chargeback, chargeback of partner nonrecourse debt
minimum gain and partner nonrecourse debt provisions of such Treasury
Regulations), and the General Partner shall make such changes in the
allocations under this Article V as it believes are reasonably necessary to
meet the requirements of such Treasury Regulations.
Section 5.07. Minimum Allocations to General Partner. Notwithstanding
any other provision hereof, other than the provisions of Section 5.05, the
General Partner shall be allocated at least 1% of all items of Net Income and
Net Losses for each Fiscal Year.
Section 5.08. Taxpayer Information. Any Person who holds Preferred
Partner Interests as a nominee for another Person is required to furnish to the
Partnership (a) the name, address, and taxpayer identification number of the
beneficial owner and the nominee; (b) information as to whether the beneficial
owner is (1) a Person that is not a United States Person, (2) a foreign
government, an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, or (3) a tax-exempt entity; (c) the
amount and description of Preferred Partner Interests held, acquired, or
transferred for the beneficial owner; and (d) certain information including the
dates of acquisitions and transfers, means of acquisitions and transfers, and
acquisitions cost for purchases, as well as the amount of net proceeds from
sales.
ARTICLE VI
DISTRIBUTIONS
Section 6.01. Distributions. Preferred Partners shall receive periodic
distributions, if any, in accordance with the terms of the applicable Action
creating the series of Preferred Partner Interests held by them, as and when
determined by the General Partner, out of funds held by the Partnership and
legally available therefor. Subject to the rights of the holders of the
Preferred Partner Interests, the General Partner shall receive such
<PAGE>
distributions, if any, as may be determined from time to time by the General
Partner.
Section 6.02. Certain Distributions Prohibited. Notwithstanding anything
in this Agreement to the contrary, all Partnership distributions shall be
subject to the following limitations:
(a) No distribution shall be made to any Partner if, and to the extent
that, such distribution would not be permitted under Section 17-607 of the
Delaware Act or other applicable law.
(b) No distribution shall be made to any Partner to the extent that such
distribution, if made, would create or increase a deficit balance in the
Capital Account of such Partner.
(c) Other than Liquidating Distributions, no distribution of Partnership
property shall be made in kind. Notwithstanding anything in the Delaware Act
or this Agreement to the contrary, in the event of a Liquidating Distribution,
a Partner may be compelled in accordance with Section 12.01 to accept a
distribution of cash or any other asset in kind from the Partnership even if
the percentage of the asset distributed to it exceeds a percentage of that
asset which is equal to the percentage in which such Partner shares in
distributions from the Partnership.
Section 6.03. Withholding. The Partnership shall comply with all
withholding requirements under United States federal, state and local law. The
Partnership shall request, and the Partners shall provide to the Partnership,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Partner, and any representations and forms as
shall reasonably be requested by the Partnership to assist it in determining
the extent of, and in fulfilling, its withholding obligations. The Partnership
shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Partner, shall remit
amounts withheld with respect to the Partners to applicable jurisdictions. To
the extent that the Partnership is required to withhold and pay over any
amounts to any authority with respect to distributions or allocations to any
Partner, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Partner. In the event of any claimed
overwithholding, Partners shall be limited to an action against the applicable
jurisdiction. If the amount withheld was not withheld from actual
distributions, the Partnership may reduce subsequent distributions by the
amount of such withholding.
ARTICLE VII
ACCOUNTING MATTERS; BANKING
Section 7.01. Fiscal Year. The fiscal year ("Fiscal Year") of the
Partnership shall be the calendar year, or such other year as is required by
the Code.
Section 7.02. Certain Accounting Matters. (a) At all times during the
existence of the Partnership, the General Partner shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Partnership. The books
of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.
The Partnership shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of the
Partnership shall be examined by and reported upon as of the end of each Fiscal
<PAGE>
Year by a firm of independent certified public accountants selected by the
General Partner.
(b) The General Partner shall cause to be prepared and delivered to each
of the Partners, within 90 days after the end of each Fiscal Year of the
Partnership, annual financial statements of the Partnership, including a
balance sheet of the Partnership as of the end of such Fiscal Year, and the
related statements of income or loss and a statement indicating such Partner's
share of each item of Partnership income, gain, loss, deduction, or credit for
such Fiscal Year for income tax purposes.
(c) Notwithstanding anything in this Agreement to the contrary, the
General Partner may, to the maximum extent permitted by applicable law, keep
confidential from the Partners for such period of time as the General Partner
deems reasonable any information which the General Partner reasonably believes
to be in the nature of trade secrets or other information the disclosure of
which the General Partner in good faith believes is not in the best interest of
the Partnership or could damage the Partnership or which the Partnership or a
third party is required by law or by an agreement to keep confidential.
(d) The General Partner may make, or revoke, in its sole and absolute
discretion, any elections for the Partnership that are permitted under tax or
other applicable laws, including elections under Section 704(c) of the Code,
provided that the General Partner shall not make any elections pursuant to
Section 754 of the Code.
Section 7.03. Banking. The Partnership shall maintain one or more bank
accounts in the name and for the sole benefit of the Partnership. The sole
signatories for such accounts shall be designated by the General Partner.
Reserve cash, cash held pending the expenditure of funds for the business of
the Partnership, or cash held pending a distribution to one or more of the
Partners may be invested in any manner at the sole and absolute discretion of
the General Partner.
Section 7.04. Right to Rely on Authority of General Partner. No Person
that is not a Partner, in dealing with the General Partner, shall be required
to determine such General Partner's authority to make any commitment or engage
in any undertaking on behalf of the Partnership, or to determine any fact or
circumstance bearing upon the existence of the authority of the General
Partner.
Section 7.05. Tax Matters Partner. The "tax matters partner," as defined
in Section 6231 of the Code, of the Partnership shall be the General Partner
(the "Tax Matters Partner"). The Tax Matters Partner shall receive no
compensation from the Partnership for its services in that capacity. The Tax
Matters Partner is authorized to employ such accountants, attorneys, and agents
as it, in its sole and absolute discretion, deems necessary or desirable. Any
Person who serves as Tax Matters Partner shall not be liable to the Partnership
or to any Partner for any action it takes or fails to take as Tax Matters
Partner with respect to any administrative or judicial proceeding involving
"partnership items" (as defined in Section 6231 of the Code) of the
Partnership.
ARTICLE VIII
MANAGEMENT
Section 8.01. Management. (a) The General Partner shall have full and
exclusive authority with respect to all matters concerning the conduct of the
business and affairs of the Partnership, including without limitation the
<PAGE>
power, without the consent of the Limited Partners, to make all decisions it
deems necessary, advisable, convenient, or desirable to accomplish the purposes
of the Partnership. The Limited Partners shall have no right to remove or
replace the General Partner. The acts of the General Partner acting alone
shall serve to bind the Partnership and shall constitute the acts of the
Partners.
(b) The Limited Partners in their capacity as such shall not take part in
the management, operation, or control of the business of the Partnership or
transact any business in the name of the Partnership. In addition, the Limited
Partners, in their capacity as such, shall not be agents of the Partnership and
shall not have the power to sign or bind the Partnership to any agreement or
document. The Limited Partners shall have the right to vote only with respect
to those matters specifically provided for in this Agreement. Notwithstanding
anything herein to the contrary, the Preferred Partners may exercise all rights
provided to them, if any, under the Indenture and the Guaranty.
(c) The General Partner is authorized and directed to use its best
efforts to conduct the affairs of, and to operate, the Partnership in such a
way that the Partnership would not be deemed to be an "investment company"
required to be registered under the 1940 Act or taxed as a corporation for
United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of WMECO for United States federal
income tax purposes. In this connection, the General Partner is authorized to
take any action not inconsistent with applicable law, the Certificate of
Limited Partnership, or this Agreement that does not materially adversely
affect the interests of holders of Preferred Partner Interests that the General
Partner determines in its sole and absolute discretion to be necessary or
desirable for such purposes.
Section 8.02. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Partnership or to any other Covered Person,
an Indemnified Person acting under this Agreement shall not be liable to the
Partnership or to any other Covered Person for its good faith reliance on the
provisions of this Agreement or the advice of counsel selected by the
Indemnified Person in good faith. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein, (1) whenever a conflict
of interest exists or arises between Covered Persons, or (2) whenever this
Agreement or any other agreement contemplated herein or therein provides that
an Indemnified Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Partnership or any Partner, the Indemnified
Person shall resolve such conflict of interest, taking such action or providing
such terms, considering in each case the relative interest of each party
(including its own interest) to such conflict, agreement, transaction, or
situation, and the benefits and burdens relating to such interests, any
customary or accepted industry practices, the advice of counsel selected by the
Indemnified Person in good faith, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action, or term so made, taken, or provided
by the Indemnified Person shall not constitute a breach of this Agreement or
any other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is permitted or
required to make a decision (1) in its "discretion" or under a grant of similar
<PAGE>
authority or latitude, the Indemnified Person shall be entitled to consider
only such interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Partnership or any other Person, or (2) in its "good
faith" or under another express standard, the Indemnified Person shall act
under such express standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable law.
Section 8.03. Specific Obligations of the General Partner. The General
Partner hereby undertakes:
(a) to devote to the affairs of the Partnership so much of its time as
shall be necessary to carry on properly the Partnership's business and its
responsibilities hereunder;
(b) to cause the Partnership (i) to do, or refrain from doing, such acts
as shall be required by Delaware law in order to preserve the valid existence
of the Partnership as a Delaware limited partnership and to preserve the
limited liability of the Limited Partners, and (ii) to refrain from engaging in
any activity that is not consistent with the limited purposes of the
Partnership set forth in Section 2.03 hereof;
(c) to pay directly all (and the Partnership shall not be obligated to
pay, directly or indirectly, any) of the costs and expenses of the Partnership,
including without limitation costs and expenses relating to the organization of
and offering of limited partner interests in the Partnership and costs and
expenses relating to the operation of the Partnership. By way of example and
not of limitation, such costs and expenses include costs and expenses of
accountants, attorneys, statistical or bookkeeping services, computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel, telephone, and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Partnership assets; and
(d) to timely perform all its duties as General Partner, including its
duty to pay distributions to the Preferred Partners in accordance with Section
6.01 hereof.
Section 8.04. Powers of the General Partner. The General Partner shall
have the right, power and authority, in the management of the business and
affairs of the Partnership, to do or cause to be done any and all acts deemed
by the General Partner to be necessary or desirable to effectuate the business,
purposes, and objectives of the Partnership. Without limiting the generality
of the foregoing, the General Partner shall have the power and authority
without any further act, approval, or vote of any Partner to:
(a) cause the Partnership to issue Interests, including Preferred Partner
Interests, and determine classes and series thereof, in accordance with this
Agreement; provided, however, that the Partnership shall not create or issue
any Interests senior to Preferred Partner Interests;
(b) act as, or appoint another Person to act as, registrar and transfer
agent for the Preferred Partner Interests;
(c) establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including with respect
to allocations, distributions, and voting rights and declare distributions and
make all other required payments on General Partner, Class A Limited Partner
and Preferred Partner Interests as the Partnership's paying agent;
<PAGE>
(d) enter into and perform one or more Indentures and one or more
Underwriting Agreements and use the proceeds from the issuance of the Interests
to purchase the Subordinated Debentures, in each case on behalf of the
Partnership;
(e) bring and defend on behalf of the Partnership actions and proceedings
at law or in equity before any court or governmental, administrative, or other
regulatory agency, body, or commission or otherwise;
(f) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(g) redeem each series of Preferred Partner Interests (which shall
constitute a return of capital and not a distribution of income) in accordance
with its terms and/or to the extent that the related series of Subordinated
Debentures is redeemed or reaches maturity; and
(h) execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Partnership in all matters
necessary, desirable, convenient, advisable or incidental to the foregoing.
The expression of any power or authority of the General Partner in this
Agreement shall not in any way limit or exclude any other power or authority
which is not specifically or expressly set forth in, or precluded by, this
Agreement.
Section 8.05. Independent Affairs. Any Partner or any Affiliate thereof
may engage in or possess an interest in any other business venture of whatever
nature and description, independently or with others, wherever located and
whether or not comparable to or in competition with the Partnership or the
General Partner, or any Affiliate thereof, and neither the Partnership nor any
of the Partners shall, by virtue of this Agreement, have any rights with
respect to, or interests in, such independent ventures or the income, profits,
or losses derived therefrom. No Partner or Affiliate thereof shall be
obligated to present any particular investment opportunity to the Partnership
even if such opportunity is of a character that, if presented to the
Partnership, could be taken by the Partnership, and any Partner or Affiliate
thereof shall have the right to take for its own account (individually or as a
Partner or fiduciary) or to recommend to others any such particular investment
opportunity.
Section 8.06. Meetings of the Partners. Meetings of the Partners of any
class or series or of all classes or series of the Partnership's Interests may
be called at any time by the Partners holding 10% in liquidation preference of
such class or series of Interests, or of all classes or series of Interests, as
the case may be, or as provided in any Action establishing a series of
Preferred Partner Interests. Except to the extent otherwise provided in any
such Action, the following provisions shall apply to meetings of Partners.
(a) Notice of any meeting shall be given to all Partners not less than 10
Business Days nor more than 60 days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Whenever a vote,
consent, or approval of Partners is permitted or required under this Agreement,
such vote, consent, or approval may be given at a meeting of Partners or by
written consent.
(b) Each Partner may authorize any Person to act for it by proxy on all
matters in which a Partner is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. Every proxy must be
<PAGE>
signed by the Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the Partner
executing it.
(c) Each meeting of Partners shall be conducted by the General Partner or
by such other Person that the General Partner may designate.
(d) Subject to the provisions of this Section 8.06, the General Partner,
in its sole and absolute discretion, shall establish all other provisions
relating to meetings of Partners, including notice of the time, place, or
purpose of any meeting at which any matter is to be voted on by any Partners,
waiver of any such notice, action, by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy, or any other matter with respect to the exercise of any such right to
vote; provided, however, that unless the General Partner has established a
lower percentage, a majority of the Partners entitled to vote thereat shall
constitute a quorum at all meetings of the Partners.
Section 8.07. Net Worth of the General Partner. By execution of this
Agreement, the General Partner represents and covenants that (a) as of the date
hereof and at all times during the existence of the Partnership it will
maintain a fair market value net worth of at least 10% of the total
contributions less redemptions to the Partnership, throughout the life of the
Partnership, in accordance with Rev. Proc. 92-88, 1992-2 C.B. 496, or such
other amount as may be required from time to time pursuant to any amendment,
modification, or successor to Rev. Proc. 92-88 (such net worth being computed
excluding any interest in, or receivable due from, the Partnership and
including any income tax liabilities that would become due by the General
Partner upon disposition by the General Partner of all assets included in
determining such net worth), and (b) it will not make any voluntary
dispositions of assets which would reduce the net worth below the amount
described in (a).
Section 8.08. Restrictions on General Partner. So long as any series of
Subordinated Debentures are held by the Partnership, the General Partner,
unless so directed by the Special Representative, shall not (1) direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or executing any trust or power conferred on the Trustee with
respect to such series, (2) waive any past default which is available under the
Indenture, (3) exercise any right to rescind or annul a declaration that the
principal of all of a series of Subordinated Debentures shall be due and
payable or (4) consent to any amendment, modification, or termination of the
Indenture, or to a supplemental indenture under the Indenture where such
consent shall be required, without, in each case, obtaining the prior approval
of the holders of not less than 66 2/3% of the aggregate stated liquidation
preference of all series of Preferred Partner Interests affected thereby,
acting as a single class; provided, however, that where a consent under the
Indenture would require the consent of each holder affected thereby, no such
consent shall be given by the General Partner without the prior consent of each
holder of all series of Preferred Partner Interests affected thereby. The
General Partner shall not revoke any action previously authorized or approved
by a vote of any series of Preferred Partner Interests. The General Partner
shall notify all holders of such Preferred Partner Interests of any notice of
default received from the Trustee with respect to such series of Subordinated
Debentures.
ARTICLE IX
LIABILITY AND INDEMNIFICATION
<PAGE>
Section 9.01. Partnership Expenses and Liabilities.
(a) Except as provided in the Delaware Act, the General Partner shall
have the liabilities of a partner in a partnership without limited partners to
Persons other than the Partnership and the other Partners.
(b) Except as otherwise expressly required by law, a Limited Partner, in
its capacity as such, shall have no liability in excess of (1) the amount of
its capital contributions to the Partnership, (2) its share of any assets and
undistributed profits of the Partnership, and (3) the amount of any
distributions wrongfully distributed to it.
Section 9.02. No Liability. Except as otherwise expressly provided in
Section 9.01(a) or by the Delaware Act, no Covered Person shall be liable to
the Partnership or to any other Partner for any act or omission performed or
omitted pursuant to the authority granted to it hereunder or by law, or from a
loss resulting from any mistake or error in judgment on its part or from the
negligence, dishonesty, fraud or bad faith of any employee, independent
contractor, broker or other agent of the Partnership, provided that such act or
omission, such mistake or error in judgment or the selection of such employee,
independent contractor, broker or other agent, as the case may be, did not
result from the willful misconduct, gross negligence or fraud of such Covered
Person. Any Covered Person shall be fully protected in relying in good faith
upon the records of the Partnership and upon such information, opinions,
reports or statements presented to the Partnership by any Person as to matters
the Covered Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Partnership, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to Partners might properly be paid.
Section 9.03. Indemnification. To the fullest extent permitted by
applicable law, except as set forth in Section 8.03(c), an Indemnified Person
shall be entitled to indemnification from the Partnership for any loss, damage
or claim incurred by such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Partnership and in a manner reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of willful
misconduct, gross negligence or fraud with respect to such acts or omissions;
provided, however, that any indemnity under this Section 9.03 shall be provided
out of and to the extent of Partnership assets only, and except as otherwise
provided by the Delaware Act, no Covered Person shall have any personal
liability on account thereof. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Partnership prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in this Section 9.03.
ARTICLE X
WITHDRAWAL; TRANSFER RESTRICTIONS
<PAGE>
Section 10.01. Transfer by General Partner; Admission of Substituted
General Partner. The General Partner may not Transfer its Interest (in whole
or in part) to any Person without the consent of all other Partners, provided
that the General Partner may, without the consent of any Partner, Transfer its
Interest to any of its direct or indirect wholly-owned subsidiaries.
Notwithstanding anything else herein, the General Partner may merge with or
into another Person, may permit another Person to merge with or into the
General Partner and may Transfer all or substantially all of its assets to
another Person if the General Partner is the survivor of such merger or the
Person into which the General Partner is merged or to which the General
Partner's assets are transferred is a Person organized under the laws of the
United States or any state thereof or the District of Columbia and the General
Partner shall have the right to admit the assignee or transferee of its
Interest which is permitted hereunder as a substituted or additional general
partner of the Partnership, without the consent of the Limited Partners. Any
such assignee or transferee of all or a part of the Interest of a General
Partner shall be deemed admitted to the Partnership as a general partner of the
Partnership immediately prior to the effective date of such Transfer, and such
additional or successor general partner is hereby authorized to and shall
continue the business of the Partnership without dissolution.
Section 10.02. Withdrawal of Limited Partners. A Preferred Partner may
not withdraw from the Partnership prior to the dissolution, liquidation, or
winding up of the Partnership except upon the assignment of its Preferred
Partner Interests (including any redemption, repurchase, exchange, or other
acquisition by the Partnership), as the case may be, in accordance with the
provisions of this Agreement. Any Person who has been assigned one or more
Interests shall provide the Partnership with a completed Form W-8 or such other
documents or information as are requested by the Partnership for tax reporting
purposes. A withdrawing Preferred Partner shall not be entitled to receive any
distribution and shall not otherwise be entitled to receive the fair value of
its Preferred Partner Interest except as otherwise expressly provided in this
Agreement.
ARTICLE XI
DISSOLUTION OF THE PARTNERSHIP
Section 11.01. No Dissolution. The Partnership shall not be dissolved by
the admission of Partners in accordance with the terms of this Agreement. The
death, withdrawal, incompetency, bankruptcy, dissolution, or other cessation to
exist as a legal entity of a Limited Partner, or the occurrence of any other
event that terminates the Interest of a Limited Partner in the Partnership,
shall not in and of itself cause the Partnership to be dissolved and its
affairs wound up. To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner, subject to the terms of this
Agreement, may, without any further act, vote, or approval of any Partner,
admit any Person to the Partnership as an additional or substitute Limited
Partner, which admission shall be effective as of the date of the occurrence of
such event, and the business of the Partnership shall be continued without
dissolution.
Section 11.02. Events Causing Dissolution. The Partnership shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(a) The expiration of the term of the Partnership, as provided in Section
2.04 hereof;
<PAGE>
(b) The withdrawal, removal, or bankruptcy of the General Partner or
Transfer (other than a grant of a security interest) by the General Partner of
its entire Interest in the Partnership when the assignee is not admitted to the
Partnership as an additional or successor general partner in accordance with
Section 10.01 hereof, or the occurrence of any other event that results in the
General Partner ceasing to be a general partner of the Partnership under the
Delaware Act, provided, the Partnership shall not be dissolved and required to
be wound up in connection with any of the events specified in this clause (b)
if (1) at the time of the occurrence of such event there is at least one
remaining general partner of the Partnership who is hereby authorized to,
agrees to, and does carry on the business of the Partnership, or (2) within 90
days after the occurrence of such event, a majority in Interest of the
remaining Partners (or such greater percentage in Interest as is required by
the Delaware Act) agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of such event, if required, of
one or more successor general partners of the Partnership;
(c) The entry of a decree of judicial dissolution under Section 17-802 of
the Delaware Act;
(d) The written consent of the General Partner and all of the Preferred
Partners; or
(e) If a Tax Event or an Investment Company Act Event has occurred,
pursuant to an Action of the General Partner so providing.
Section 11.03. Notice of Dissolution. Upon the dissolution of the
Partnership, the General Partner shall promptly notify the Partners of such
dissolution.
ARTICLE XII
LIQUIDATION OF PARTNERSHIP INTERESTS
Section 12.01. Liquidation. Upon dissolution, liquidation or winding up
of the Partnership, the General Partner, or, in the event that the dissolution,
liquidation or winding up is caused by an event described in Section 11.02(b)
and there is no other general partner of the Partnership, a Person or Persons
who may be approved by Preferred Partners holding not less than a majority in
liquidation preference of the Preferred Partner Interests, as liquidating
trustee (the "Liquidating Trustee"), shall immediately commence to wind up the
Partnership's affairs; provided, however, that a reasonable time shall be
allowed for the orderly liquidation of the assets of the Partnership and the
satisfaction of liabilities to creditors so as to enable the Partners to
minimize the normal losses attendant upon a liquidation. The Preferred
Partners shall continue to share profits and losses during liquidation in the
same proportions, as specified in Articles V and VI hereof, as before
liquidation. The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(a) to creditors of the Partnership, including Preferred Partners who are
creditors, to the extent permitted by law, in satisfaction of the liabilities
of the Partnership (whether by payment or the making of reasonable provision
for payment thereof), other than (1) liabilities for which reasonable provision
for payment has been made and (2) liabilities for distributions to Partners;
(b) to the holders of Preferred Partner Interests of each series then
outstanding in accordance with the terms of the Action or Actions for such
series; and
<PAGE>
(c) to all Partners in proportion to their respective positive Capital
Account balances, after giving effect to all contributions, distributions, and
allocations for all periods.
Section 12.02. Termination. The Partnership shall terminate when all of
the assets of the Partnership have been distributed in the manner provided for
in this Article XII, and the Certificate of Limited Partnership shall have been
cancelled in the manner required by the Delaware Act.
Section 12.03. Duty of Care. The General Partner or the Liquidating
Trustee, as the case may be, shall not be liable to the Partnership or any
Partner for any loss attributable to any act or omission of the General Partner
taken in good faith in connection with the liquidation of the Partnership and
distribution of its assets in belief that such course of conduct was in
accordance with this Agreement and in the best interest of the Partnership.
The General Partner or the Liquidating Trustee, as the case may be, may consult
with counsel and accountants with respect to liquidating the Partnership and
distributing its assets and shall be justified in acting or omitting to act in
accordance with the written opinion of such counsel or accountants, provided
they shall have been selected with reasonable care.
Section 12.04. No Liability for Return of Capital. The General Partner and
its respective officers, directors, members, shareholders, employees,
representatives, agents, partners, and Affiliates shall not be personally
liable for the return of the contributions of any Partner to the Partnership.
No Limited Partner shall be obligated to restore to the Partnership any amount
with respect to a negative Capital Account. The General Partner shall be
obligated to restore to the Partnership any deficit balance in its Capital
Account upon the dissolution of the Partnership by the end of the Fiscal Year
of dissolution (or, if later, within 90 days after the date of such
dissolution).
ARTICLE XIII
PREFERRED PARTNER INTERESTS
Section 13.01. Preferred Partner Interests.
(a) The aggregate number of Preferred Partner Interests which the
Partnership shall have authority to issue is unlimited. Each series of
Preferred Partner Interests shall rank equally and all Preferred Partner
Interests shall rank senior to all other Interests in respect of the right to
receive distributions and the right to receive payments out of the assets of
the Partnership upon voluntary or involuntary dissolution and winding up of the
Partnership.
(b) The General Partner on behalf of the Partnership is authorized to
issue Preferred Partner Interests, in one or more series, having such
designations, rights, privileges, restrictions, and other terms and provisions,
whether in regard to distributions, return of capital, or otherwise, as may
from time to time be established in a written action or actions (each, an
"Action") of the General Partner providing for the issue of such series. In
connection with the foregoing, the General Partner is expressly authorized,
prior to issuance, to set forth in an Action or Actions providing for the issue
of such series, the following:
(1) The distinctive designation of such series which shall
distinguish it from other series;
<PAGE>
(2) The number of Preferred Partner Interests included in such
series;
(3) The Preferred Partner Distribution rate (or method of
determining such rate) for Preferred Partner Interests of such series and
the first date upon which such Preferred Partner Distribution shall be
payable; provided, however, that Preferred Partner Distributions shall be
payable on a monthly basis to the holders of the Preferred Securities of
such series as of a record date in each calendar month during which the
Preferred Securities of such series are outstanding;
(4) The amount or amounts which shall be paid out of the assets of
the Partnership to the holders of such series of Preferred Partner
Interests upon voluntary or involuntary dissolution and winding up of the
Partnership;
(5) The price or prices at which (the "Redemption Price"), the
period or periods within which, and the terms and conditions upon which
the Preferred Partner Interests of such series may be redeemed or
purchased, in whole or in part, at the option of the Partnership;
(6) The obligation, if any, of the Partnership to purchase or redeem
Preferred Partner Interests of such series pursuant to a sinking fund or
otherwise and the price or prices at which, the period or periods within
which and the terms and conditions upon which the Preferred Partner
Interests of such series shall be redeemed, in whole or in part, pursuant
to such obligation;
(7) The period or periods within which and the terms and conditions,
if any (including the price or prices or the rate or rates of conversion
or exchange and the terms and conditions of any adjustments thereof), upon
which the Preferred Partner Interests of such series shall be convertible
or exchangeable at the option of the Preferred Partner, or the
Partnership, into any other Interests or securities or other property or
cash or into any other series of Preferred Partner Interests;
(8) The voting rights, if any, of the Preferred Partner Interests of
such series in addition to those required by law or set forth herein, and
any requirement for the approval by the Preferred Partner Interest, or of
the Preferred Partner Interests of one or more series, or of both, as a
condition to specified Action or amendments to this Agreement; and
(9) Any other relative rights, powers, preferences, or limitations
of the Preferred Partner Interests of the series not inconsistent with
this Agreement or with applicable law.
In connection with the foregoing and without limiting the generality
thereof, the General Partner is hereby expressly authorized, without the vote
or approval of any other Partner, to take any Action to create under the
provisions of this Agreement a series of Preferred Partner Interests that was
not previously outstanding. Without the vote or approval of any other Partner,
the General Partner may execute, swear to, acknowledge, deliver, file, and
record whatever documents may be required in connection with the issue from
time to time of Preferred Partner Interests in one or more series as shall be
necessary or desirable to reflect the issue of such series. The General
Partner shall do all things it deems to be necessary or desirable to comply
with the Delaware Act and is authorized and directed to do all permissible
things it deems to be necessary or desirable in connection with any future
issuance, including compliance with any statute, rule, regulation, or guideline
of any federal, state, or other governmental agency or any securities exchange.
<PAGE>
Any Action or Actions taken by the General Partner pursuant to the
provisions of this paragraph (b) shall be deemed an amendment and supplement to
and part of this Agreement.
(c) Except as otherwise provided in this Agreement or in any Action in
respect of any series of the Preferred Partner Interests and as otherwise
required by law, all rights to the management and control of the Partnership
shall be vested exclusively in the General Partner.
(d) No holder of Interests shall be entitled as a matter of right to
subscribe for or purchase, or have any preemptive right with respect to, any
part of any new or additional issue of Interests of any class or series
whatsoever, or of securities convertible into any Interests of any class or
series whatsoever, whether now or hereafter authorized and whether issued for
cash or other consideration or by way of distribution. Any Person acquiring
Preferred Partner Interests shall be admitted to the Partnership as a Preferred
Partner upon compliance with Section 2.06.
Section 13.02. Terms of All Preferred Partner Interests. Notwithstanding
anything else in any Action to the contrary, all Preferred Partner Interests of
the Partnership regardless of series shall have the voting rights, preferences,
participating, optional and other special rights, and the qualifications,
limitations, or restrictions of, and other matters relating to, the Preferred
Partner Interests as set forth below in this Section 13.02.
(a) Distributions.
(1) The Preferred Partners shall be entitled to receive, to the
extent that the Partnership has cash on hand sufficient to permit such
payments and, as determined by the General Partner, funds legally
available therefor, cumulative preferential cash distributions ("Preferred
Partner Distributions") at a rate per annum established by the General
Partner, calculated on the basis of a 360-day year consisting of 12 months
of 30 days each, and for any period shorter than a full monthly
distribution period, Preferred Partner Distributions will be computed on
the basis of the actual number of days elapsed in such period, and payable
in United States dollars monthly in arrears on the last day of each
calendar month of each year. In the event that any date on which
Preferred Partner Distributions are payable is not a Business Day, then
payment of such Preferred Partner Distributions will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Such Preferred Partner Distributions will
be cumulative from the date of original issue whether or not there are
profits, surplus, or other funds of the Partnership legally available for
the payment of Preferred Partner Distributions, or whether they are
deferred.
(2) If distributions have not been paid, or set aside for payment,
in full on any series of Preferred Partner Interests, the Partnership may
not:
(A) pay, or set aside for payment, any distributions on any
other series of Preferred Partner Interests, unless the amount of any
distributions paid, or set aside for payment, on any Preferred
Partner Interests is paid on all Preferred Partner Interests then
<PAGE>
outstanding on a pro rata basis, on the date such distributions are
paid, or set aside for payment, so that
(i) (x) the aggregate amount of distributions paid on such
series of Preferred Partner Interests bears to (y) the aggregate
amount of distributions paid on all such Preferred Partner
Interests outstanding the same ratio as
(ii) (x) the aggregate of all accumulated arrears of
unpaid distributions in respect of such series of Preferred
Partner Interests bears to (y) the aggregate of all accumulated
arrears of unpaid distributions in respect of all such Preferred
Partner Interests outstanding;
(B) pay, or set aside for payment, any distribution on the
General Partner's Interest; or
(C) redeem, purchase or otherwise acquire any other Preferred
Partner Interests of such series or any other series then outstanding
or any of the General Partner's Interest;
until, in each case, such time as all accumulated and unpaid distributions
on all series of Preferred Partner Interests shall have been paid in full
for all distribution periods terminating on or prior to, in the case of
clauses (A) and (B), such payment and, in the case of clause (C), the date
of such redemption, purchase, or acquisition.
(b) Redemption Procedures.
(1) Notice of any redemption (a "Notice of Redemption") of the
Preferred Partner Interests will be given by the Partnership by mail or
delivery to each record holder of Preferred Partner Interests to be
redeemed not fewer than 30 nor more than 60 days prior to the date fixed
for redemption thereof, at a redemption price set forth in the related
Action plus an amount equal to accumulated and unpaid Preferred Partner
Distributions. For purposes of the calculation of the date of redemption
and the dates on which notices are given pursuant to this paragraph
(b)(i), a Notice of Redemption shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or on the
date it was delivered in person, receipt acknowledged, to the holders of
such Preferred Partner Interests. Each Notice of Redemption shall be
addressed to the record holders of the Preferred Partner Interests at the
address of the holder appearing in the books and records of the
Partnership. Each Notice of Redemption may state that it is subject to
receipt by the Partnership of redemption monies on or before the date
fixed for redemption, and which notice shall be of no effect unless such
monies are so received prior to such date. No defect in the Notice of
Redemption or in the mailing or delivery thereof or publication of its
contents shall affect the validity of the redemption proceedings.
(2) The Partnership may not redeem any Preferred Partner Interests
unless all accumulated and unpaid distributions have been paid on all
Preferred Partner Interests for all monthly distribution periods
terminating on or prior to the date of redemption. In the case of a
partial redemption resulting from a Tax Event, the Partnership will (A)
cause the global certificates representing all of such series of Preferred
Partner Interests to be withdrawn from The Depository Trust Company or its
successor securities depository, (B) issue certificates in definitive form
representing such series of Preferred Partner Interests, and (C) redeem
<PAGE>
the series or portion of the series of Preferred Partner Interests subject
to such Tax Event. Subject to applicable law, WMECO or its subsidiaries
may at any time and from time to time purchase outstanding Preferred
Partner Interests by tender, in the open market, or by private agreement.
In the event that WMECO or its subsidiary surrenders any Preferred Partner
Interests to the Partnership, the Partnership will distribute, to or upon
order by WMECO, Subordinated Debentures of the corresponding series in
aggregate principal amount equal to the aggregate liquidation preference
of the Preferred Securities so surrendered. If a partial redemption of
outstanding Preferred Partner Interests would result in a delisting of a
series of Preferred Partner Interests from any national securities
exchange on which the series of Preferred Partner Interests is then
listed, the Partnership may then only redeem the series of Preferred
Partner Interests in whole.
(3) If Notice of Redemption shall have been given and payment shall
have been made by the Partnership to the record holders of the Preferred
Partner Interests, then upon the date of such payment, all rights of the
Preferred Partner Interest Owners or holders of such Preferred Partner
Interests so called for redemption will cease, except the right of the
holders of such securities to receive the Redemption Price, but without
interest. In the event that any date fixed for redemption of Preferred
Partner Interests is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next
succeeding calendar year, such payment will be made on the immediately
preceding Business Day (in each case with the same force and effect as if
made on such day). In the event that payment of the Redemption Price in
respect of Preferred Partner Interests is not made either by the
Partnership or by WMECO pursuant to the Guaranty, distributions on such
Preferred Partner Interests will continue to accrue at the then applicable
rate, from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(c) Liquidation Distribution. If, upon any liquidation, the Liquidation
Distribution on any series of Preferred Partner Interests can be paid only in
part because the Partnership has insufficient assets available to pay in full
the aggregate Liquidation Distribution on all Preferred Partner Interests, then
the amounts payable directly by the Partnership on such series of Preferred
Partner Interests and on all other series of Preferred Partner Interests shall
be paid on a pro rata basis, so that
(1) (A) the aggregate amount actually paid in respect of the
Liquidation Distribution on such series bears to (B) the aggregate amount
actually paid as liquidation distributions on all other Preferred Partner
Interests the same ratio as
(2) (A) the aggregate Liquidation Distribution on such series bears
to (B) the aggregate maximum liquidation distributions on all other
Preferred Partner Interests.
(d) Voting Rights. The Limited Partners shall not have any right to vote
on matters concerning the Partnership except as specifically set forth in this
Agreement, in the Guaranty, or as otherwise required by law. If (1) the
Partnership fails to pay distributions in full on any series of Preferred
Partner Interests for 18 consecutive months; (2) an Event of Default under the
Indenture occurs and is continuing; or (3) WMECO is in default on any of its
payment or other obligations under the Guaranty, then the holders of all series
<PAGE>
of the Preferred Partner Interests outstanding, acting as a single class, will
be entitled, by a vote of the majority of the aggregate stated liquidation
preference of outstanding Preferred Partner Interests, to appoint and authorize
a special representative (the "Special Representative") to enforce the
Partnership's creditor rights under the Subordinated Debentures and the
Indenture against WMECO and enforce the obligations undertaken by WMECO under
the Guaranty, including (but only after failure to pay distributions for 60
consecutive monthly distribution periods) to declare and pay distributions on
such series of Preferred Partner Interests, the General Partner agreeing to
execute and deliver such documents as may be necessary or desirable for the
Special Representative to enforce such rights and obligations. Notwithstanding
anything else herein, the Special Representative shall not be admitted as a
partner of the Partnership and shall have no liability for the debts,
obligations, or liabilities of the Partnership, except to the extent otherwise
required by applicable law in order for such Special Representative to enforce
the Partnership's rights under the Subordinated Debentures and the Indenture
and fulfill its other duties hereunder.
In furtherance of the foregoing, and without limiting the powers of any
Special Representative so appointed and for the avoidance of any doubt
concerning the powers of the Special Representative, any Special
Representative, in its own name and as trustee of an express trust, may
institute a proceeding, including, without limitation, any suit in equity, an
action at law, or other judicial or administrative proceeding, to enforce the
Partnership's creditor rights pursuant to the Indenture and the Guaranty
directly against WMECO or any other obligor in connection with such obligations
to the same extent as the Partnership and on behalf of the Partnership, and may
pursue such proceeding to judgment or final decree, and enforce the same
against WMECO or any other obligor in connection with such obligations and
collect, out of the property, wherever situated, of WMECO or any such other
obligor upon such obligations, the monies adjudged or decreed to be payable in
the manner provided by law.
For purposes of determining whether the Partnership has failed to pay
distributions in full for 18 consecutive monthly distribution periods,
distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative distributions have been or
contemporaneously are declared and paid with respect to all monthly
distribution periods terminating on or prior to the date of payment of such
full cumulative distributions on all Preferred Partner Interests. Subject to
the requirements of applicable law, not later than 30 days after such right to
appoint a Special Representative arises, the General Partner will convene a
general meeting for the above purpose. If the General Partner fails to convene
such meeting within such 30-day period, the Preferred Partners who hold 10% of
the aggregate stated liquidation preference of the outstanding Preferred
Partner Interests will be entitled to convene such meeting. The provisions of
this Agreement relating to the convening and conduct of general meetings of
Partners will apply with respect to any such meeting. Any Special
Representative so appointed shall cease to act in such capacity immediately if
the Partnership (or WMECO pursuant to the Guaranty) shall have paid in full all
accumulated and unpaid distributions on the Preferred Partner Interests or such
default or breach, as the case may be, shall have been cured. Notwithstanding
the appointment of any such Special Representative, WMECO retains all rights
under the Indenture, including the right to extend the interest payment period
on the Subordinated Debentures.
If any proposed amendment of this Agreement provides for, or the General
Partner otherwise proposes to effect (pursuant to an Action or otherwise), any
action which would materially adversely affect the powers, preferences, or
special rights of any series of Preferred Partner Interests, then holders of
<PAGE>
such series of outstanding Preferred Partner Interests will be entitled to vote
on such amendment or action of the General Partner (but not on any other
amendment or action) and, in the case of an amendment which would equally
adversely affect the powers, preferences, or special rights of any other series
of Preferred Partner Interests, all holders of such series of Preferred Partner
Interests, shall vote together as a class on such amendment or action of the
General Partner (but not on any other amendment or action), and such amendment
or action shall not be effective except with the approval of Preferred Partners
holding not less than 66 2/3% of the aggregate stated liquidation preference of
such outstanding series of Preferred Partner Interests. Except as otherwise
provided under Section 11.02 or the Delaware Act, the Partnership will be
dissolved and wound up only with the consent of the holders of all outstanding
Preferred Partner Interests.
The powers, preferences, or special rights of any Preferred Partner
Interests will be deemed not to be adversely affected by the creation or issue
of, and no vote will be required for the creation or issuance of, any
additional series of Preferred Partner Interests or additional general partner
Interests.
Any required approval of Preferred Partner Interests may be given at a
separate meeting of such holders convened for such purpose, at a meeting of the
holders of all series of Preferred Partner Interests or pursuant to written
consent. The Partnership will cause a notice of any meeting at which holders
of any Preferred Partner Interests are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be mailed to
each holder of Preferred Partner Interests. Each such notice will include a
statement setting forth (a) the date of such meeting or the date by which such
action is to be taken, (b) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought, and (c) instructions for the
delivery of proxies or consents.
No vote or consent of the holders of the Preferred Partner Interests will
be required for the Partnership to redeem and cancel the Preferred Partner
Interests in accordance with this Agreement.
Notwithstanding that holders of Preferred Partner Interests are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Partner Interests that are owned by WMECO or any entity owned more
than 50% by WMECO, either directly or indirectly, shall not be entitled to vote
or consent and shall, for the purposes of such vote or consent, be treated as
if they were not outstanding.
(e) Mergers. The Partnership shall not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer, or lease its properties
and assets substantially as an entirety, to any corporation or other entity,
except with the approval of the General Partner and the holders of 66 2/3% in
aggregate stated liquidation preference of all outstanding Preferred Partner
Interests or as otherwise described below. The General Partner may, without
the consent of the holders of the Preferred Partner Interests, cause the
Partnership to consolidate, amalgamate, merge with or into, or be replaced by,
or convey, transfer, or lease its properties and assets substantially as an
entirety to, a corporation, a limited liability company, limited partnership,
trust, or other entity organized as such under the laws of any state of the
United States of America or the District of Columbia, provided that (1) such
successor entity either (A) expressly assumes all of the obligations of the
Partnership under the Preferred Partner Interests and the other obligations of
the Partnership or (B) substitutes for the Preferred Partner Interests other
securities having substantially the same terms as the Preferred Partner
<PAGE>
Interests (the "Successor Securities") so long as the Successor Securities
rank, as regards participation in the profits and assets of the successor
entity, at least as high as the Preferred Partner Interests rank, as regards
participation in the profits and assets of the Partnership, (2) WMECO confirms
in writing its obligations under the Guaranty with regard to the Successor
Securities, if any are issued, (3) such consolidation, amalgamation, merger,
replacement, conveyance, transfer, or lease does not cause the Preferred
Partner Interests or Successor Securities to be delisted by any national
securities exchange or other organization on which the Preferred Partner
Interests are then listed, (4) such merger, consolidation, amalgamation,
replacement, conveyance, transfer, or lease does not cause the Preferred
Partner Interests or Successor Securities to be downgraded by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, (5) such
merger, consolidation, amalgamation, replacement, conveyance, transfer, or
lease does not adversely affect the powers, preferences, and special rights of
holders of Preferred Partner Interests or Successor Securities in any material
respect, (6) such successor entity has a purpose substantially identical to
that of the Partnership, and (7) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer, or lease WMECO has received an
opinion of counsel (which may be regular counsel to WMECO or an Affiliate, but
not an employee thereof) experienced in such matters to the effect that (A)
holders of outstanding Preferred Partner Interests will not recognize any gain
or loss for United States federal income tax purposes as a result of the
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, (B) such successor entity will be treated as a partnership for United
States federal income tax purposes, (C) following such consolidation,
amalgamation, merger, replacement, conveyance, transfer, or lease, WMECO and
such successor entity will be in compliance with the 1940 Act without
registering thereunder as an "investment company," and (D) such merger,
consolidation, amalgamation, replacement, conveyance, transfer, or lease will
not adversely affect the limited liability of holders of Preferred Partner
Interests or Successor Securities.
ARTICLE XIV
TRANSFERS
Section 14.01. Transfers of Preferred Partner Interests. Preferred
Partner Interests may be freely transferred by a Preferred Partner in
accordance with the terms and conditions set forth in this Agreement. Any
transfer or purported transfer of any Interest not made in accordance with this
Agreement shall be null and void.
Section 14.02. Transfer of Certificates. The General Partner shall
provide for the registration of Certificates. Upon surrender for registration
of transfer of any Certificate, the General Partner shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer and agreement to be bound by
the terms of this Agreement in form satisfactory to the General Partner duly
executed by the Preferred Partner or his attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be cancelled by
the General Partner. A transferee of a Certificate shall provide the
Partnership with a completed Form W-8 or such other documents or information as
are requested by the Partnership for tax reporting purposes and thereafter
shall be admitted to the Partnership as a Preferred Partner and shall be
entitled to the rights and subject to the obligations of a Preferred Partner
hereunder upon the receipt by such transferee of a Certificate. The transferor
of a Certificate shall cease to be a Limited Partner at the time that the
<PAGE>
transferee of the Certificate is admitted to the Partnership as a Preferred
Partner in accordance with this Section 14.02.
Section 14.03. Persons Deemed Preferred Partners. The Partnership may
treat the Person in whose name any Certificate shall be registered on the books
and records of the Partnership as the Preferred Partner and the sole holder of
such Certificate for purposes of receiving distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claims to or interest in such Certificate on the part of any
other Person, whether or not the Partnership shall have actual or other notice
thereof.
Section 14.04. Book Entry Interests. The Certificates, on original
issuance, will be issued in the form of a typewritten Certificate or
Certificates representing the Book Entry Interests to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Partnership. Such Certificates shall initially be registered on the books and
records of the Partnership in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Preferred Partner Interest Owner will receive a
definitive Certificate representing such Preferred Partner Interest Owner's
interests in such Certificate, except as provided in Section 14.06. Unless and
until definitive, fully registered Certificates (the "Definitive Certificates")
have been issued to the Preferred Partner Interest Owners pursuant to Section
14.06:
(a) The provisions of this Section shall be in full force and effect;
(b) The Partnership and the General Partner shall be entitled to deal
with the Clearing Agency for all purposes of this Agreement (including the
payment of distributions on the Certificates and receiving approvals, votes, or
consents hereunder) and shall consider such clearing agency as the Preferred
Partner and sole holder of the Certificates and shall have no obligations to
the Preferred Partner Interest Owners;
(c) The rights of the Preferred Partner Interest Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Partner Interest
Owners and the Clearing Agency and/or the Clearing Agency Participants. Unless
or until the Definitive Certificates are issued pursuant to Section 14.06, the
initial Clearing Agency will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of distributions on the
Certificates to such Clearing Agency Participants;
(d) To the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control; and
(e) Whenever this Agreement requires or permits actions to be taken based
upon approvals, votes, or consents of a percentage of the Preferred Partners,
the Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from the Preferred
Partner Interest Owners and/or Clearing Agency participants owning or
representing, respectively, such required percentage of the beneficial
interests in the Certificates and has delivered such instructions to the
General Partner.
Section 14.05. Notices to Clearing Agency. Whenever a notice or other
communication to the Preferred Partners is required under this Agreement,
unless and until Definitive Certificates shall have been issued pursuant to
Section 14.06, the General Partner shall give all such notices and
<PAGE>
communications specified herein to be given to the Preferred Partners to the
Clearing Agency, and shall have no obligations to the Preferred Partner
Interest Owners.
Section 14.06. Definitive Certificates. If (1) the Clearing Agency elects
to discontinue its services as securities depository and gives reasonable
notice to the Partnership and a successor Clearing Agency is not obtained by
the Partnership to act as securities depository, or (2) the Partnership elects
to terminate the book entry system through the initial Clearing Agency or any
successor Clearing Agency, then the Definitive Certificates shall be prepared
by the Partnership. Upon surrender of the typewritten Certificate or
Certificates representing the Book Entry Interests by the Clearing Agency,
accompanied by registration instructions, the General Partner shall cause the
Definitive Certificates to be delivered to the Preferred Partner Interest
Owners in accordance with the instructions of the Clearing Agency. The General
Partner shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Any Person receiving a Definitive Certificate in accordance with
this Article XIV shall be admitted to the Partnership as a Preferred Partner
upon receipt of such Definitive Certificate. The Clearing Agency or the
nominee of the Clearing Agency, as the case may be, shall cease to be a Limited
Partner of the Partnership under this Section 14.06 at the time that at least
one additional Person is admitted to the Partnership as a Preferred Partner in
accordance with this Section 14.06. The Definitive Certificates shall be
printed, lithographed, or engraved or may be produced in any other manner as is
reasonably acceptable to the General Partner, as evidenced by its execution
thereof.
In the event that the Partnership exercises its option to redeem only a
portion of the Preferred Partner Interests of any series, the Partnership may
cause the Certificate or certificates representing the Book Entry Interests to
be withdrawn from the Clearing Agency and issue Definitive Certificates
representing the Preferred Partner Interests of such series. The General
Partner will appoint a registrar, transfer agent, and paying agent for
Preferred Partner Interests represented by Definitive Certificates.
Registration of transfers of Preferred Partner Interests represented by
Definitive Certificates will be effected without charge by or on behalf of the
Partnership, but upon payment of any tax or other governmental charges which
may be imposed in relation to it. The Partnership will not be required to
register or cause to be registered the transfer of Preferred Partner Interests
represented by Definitive Certificates after such Preferred Partner Interests
have been called for redemption.
ARTICLE XV
GENERAL
Section 15.01. Power of Attorney. (a) The Class A Limited Partner and
each Preferred Partner constitutes and appoints the General Partner and the
Liquidating Trustee as its true and lawful representative and attorney-in-fact,
in its name, place, and stead, to make, execute, sign, acknowledge, and deliver
or file (1) all instruments, documents, and certificates which may from time to
time be required by any law to effectuate, implement and continue the valid and
subsisting existence of the Partnership, (2) all instruments, documents, and
certificates that may be required to effectuate the dissolution and termination
of the Partnership in accordance with the provisions hereof and Delaware law,
(3) all other amendments of this Agreement or the Certificate of Limited
Partnership and other filings contemplated by this Agreement, including without
limitation amendments reflecting the withdrawal of the General Partner, or the
return, in whole or in part, of the contribution of any Partner, or the
<PAGE>
addition, substitution, or increased contribution of any Partner, or any action
of the Partners duly taken pursuant to this Agreement whether or not such
Partner voted in favor of or otherwise approved such action, and (4) any other
instrument, certificate, or document required from time to time to admit a
Partner, to effect its substitution as a Partner, to effect the substitution of
the Partner's assignee as a Partner, or to reflect any action of the Partners
provided for in this Agreement.
(b) The powers of attorney granted herein (1) shall be deemed to be
coupled with an interest, shall be irrevocable, and shall survive the death,
insanity, incompetency, or incapacity (or, in the case of a Partner that is a
corporation, association, partnership, limited liability company or trust,
shall survive the merger, dissolution, or other termination of existence) of
the Partner and (2) shall survive the assignment by the Partner of the whole or
any portion of his Interest, except that where the assignee of the whole or any
portion thereof has furnished a power of attorney, this power of attorney shall
survive such assignment for the sole purpose of enabling the General Partner
and the Liquidating Trustee to execute, acknowledge, and file any instrument
necessary to effect any permitted substitution of the assignee for the assignor
as a Partner and shall thereafter terminate. In the event that the appointment
conferred in this Section 15.01 would not constitute a legal and valid
appointment by any Partner under the laws of the jurisdiction in which such
Partner is incorporated, established, or resident, upon the request of the
General Partner or the Liquidating Trustee, such Partner shall deliver to the
General Partner or the Liquidating Trustee a properly authenticated and duly
executed document constituting a legal and valid power of attorney under the
laws of the appropriate jurisdiction covering the matters set forth in this
Section 15.01.
(c) The General Partner may require a power of attorney to be executed by
a transferee of a Partner as a condition of its admission as a substitute
Partner.
Section 15.02. Waiver of Partition. Each Partner hereby irrevocably
waives any and all rights that it may have to maintain an action for partition
(or any action in the nature of partition) of any of the Partnership's property
or assets.
Section 15.03. Notices. Any notice or communication to a Partner
permitted or required to be given hereunder shall be in writing and delivered
in person or mailed by first-class mail, postage prepaid. Any such notice or
communication shall be deemed given if in writing and delivered (1) on the date
it was delivered in person to a Partner, receipt acknowledged, at its address
appearing on the books and records of the Partnership, or (2) on the day it is
first mailed to a Partner by first class mail, postage prepaid.
Section 15.04. Entire Agreement. This Agreement, including the exhibits
annexed hereto and incorporated by reference herein, contains the entire
agreement of the parties hereto and supersedes all prior agreements and
understandings, oral or otherwise, among the parties hereto with respect to the
matters contained herein.
Section 15.05. Waivers. Except as otherwise expressly provided herein, no
purported waiver by any party of any breach by another party of any of his
obligations, agreements, or covenants hereunder, or any part thereof, shall be
effective unless made in a writing executed by the party or parties sought to
be bound thereby, and no failure to pursue or elect any remedy with respect to
any default under or breach of any provision of this Agreement, or any part
hereof, shall be deemed to be a waiver of any other subsequent similar or
different default or breach, or any election of remedies available in
<PAGE>
connection therewith, nor shall the acceptance or receipt by any party of any
money or other consideration due him under this Agreement, with or without
knowledge of any breach hereunder, constitute a waiver of any provision of this
Agreement with respect to such or any other breach.
Section 15.06. Headings. The section headings herein contained have been
inserted only as a matter of convenience of reference and in no way define,
limit, or describe the scope or intent of any provisions of this Agreement nor
in any way affect any such provisions.
Section 15.07. Separability. Each provision of this Agreement shall be
considered to be separable, and if, for any reason, any such provision or
provisions, or any part thereof, is determined to be invalid and contrary to
any existing or future applicable law, such invalidity shall not impair the
operation of, or affect, those portions of this Agreement which are valid, and
this Agreement shall be construed and enforced in all respects as if such
invalid or unenforceable provision or provisions had been omitted.
Section 15.08. Contract Construction. Whenever the content of this
Agreement permits, the masculine gender shall include the feminine and neuter
genders, and reference to singular or plural shall be interchangeable with the
other. References in this Agreement to particular sections of the Code or to
provisions of the Delaware Act shall be deemed to refer to such sections or
provisions as they may be amended after the date of this Agreement.
Section 15.09. Counterparts. This Agreement may be executed in one or
more counterparts and each of such counterparts for all purposes shall be
deemed to be an original, but all of such counterparts, when taken together,
shall constitute but one and the same instrument, binding upon all parties
hereto, notwithstanding that all of such parties may not have executed the same
counterpart.
Section 15.10. Benefit. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
but shall not be deemed for the benefit of creditors or any other Persons, nor
shall it be deemed to permit any assignment by a Partner of any of its rights
or obligations hereunder except as expressly provided herein.
Section 15.11. Further Actions. Each of the Partners hereby agrees that
it shall hereafter execute and deliver such further instruments and do such
further acts and things as may be required or useful to carry out the intent
and purposes of this Agreement and as are not inconsistent with the terms
hereof.
Section 15.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Delaware,
without regard to conflicts of laws.
Section 15.13. Amendments. Except as otherwise expressly provided herein
or as otherwise required by law, this Agreement may only be amended by a
written instrument executed by the General Partner; provided, however, that any
amendment which would adversely affect the powers, preferences, or special
rights of any series of Preferred Partner Interests may be effected only as
permitted by the terms of such series of Preferred Partner Interests.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
General Partner:
WESTERN MASSACHUSETTS ELECTRIC
COMPANY
By _________________________________
Name:
Title:
Class A Limited Partner,
solely to reflect its withdrawal from the Partnership:
NORTHEAST UTILITIES SERVICE COMPANY
By _________________________________
Name:
Title:
<PAGE>
Exhibit A
Certificate No. _____ CUSIP No. _____
Certificate Evidencing Preferred Partner Interests
of
WMECO Capital, L.P.
__% Cumulative Monthly Income Preferred Securities,
Series __
Liquidation preference $25 per Preferred Partner Interest
WMECO Capital, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
___________ (______________) fully paid Preferred Partner Interests of the
Partnership designated the __% Cumulative Monthly Income Preferred Securities,
Series ____ (liquidation preference $25 per Preferred Partner Interest) (the
"Series ____ Preferred Partner Interests") representing preferred limited
partner interests in the Partnership transferable on the books and records of
the Partnership, in person or by a duly authorized attorney, upon surrender of
this Certificate duly endorsed and in proper form for transfer. The powers,
preferences and special rights and limitations of the Series ____ Preferred
Partner Interests are set forth in, and this Certificate and the Series ____
Preferred Partner Interests represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Limited Partnership Agreement dated as of ___________, 199__ of the Partnership
as the same may, from time to time, be amended (the "Partnership Agreement")
authorizing the issuance of the Series __ Preferred Partner Interests and
determining, along with any actions of the General Partner of the Partnership
as authorized under the Partnership Agreement, the powers, preferences, and
other special rights and limitations, regarding distributions, voting,
redemption, and otherwise and other matters relating to the Series __ Preferred
Partner Interests. The Partnership will furnish a copy of the Partnership
Agreement to the Holder without charge upon written request to the Partnership
at its principal place of business or registered office. The Holder is
entitled to the benefits of the Payment and Guaranty Agreement of Western
Massachusetts Electric Company, dated as of _______, 199__ (the "Guaranty")
relating to the Preferred Partner Interests, and of the Indenture between
Western Massachusetts Electric Company and ____________________, as Trustee,
dated as of ____________, 199__ (the "Indenture"), under and pursuant to which
the related series of Subordinated Debentures are issued and outstanding, in
either case to the extent provided therein. The Holder is further entitled to
enforce such rights of the Partnership under the Indenture to the extent
provided therein and in the Partnership Agreement. The Partnership will
furnish a copy of the Guaranty and the Indenture to the Holder without charge
upon written request to the Partnership at its principal place of business or
registered office.
<PAGE>
The Holder, by accepting this Certificate, is deemed to have (1) agreed
that the Subordinated Debentures issued pursuant to the Indenture are
subordinate and junior in right of payment to all general liabilities of
Western Massachusetts Electric Company as and to the extent provided in the
Indenture and (2) agreed that the Guaranty is subordinate and junior in right
of payment to all general liabilities of Western Massachusetts Electric
Company. Upon receipt of this Certificate, the Holder is admitted to the
Partnership as a Preferred Partner, is bound by the Partnership Agreement and
is entitled to the benefits thereunder.
Capitalized terms used herein but not defined shall have the meaning given
them in the Partnership Agreement.
IN WITNESS WHEREOF, the Partnership has executed this Certificate this
____ day of ________________, 199__.
WMECO CAPITAL, L.P.
By Western Massachusetts Electric Company,
its General Partner
By_________________________________
Name:
Title:
<PAGE>
ACTION BY THE GENERAL PARTNER OF
WMECO CAPITAL, L.P.
CREATING THE ____% CUMULATIVE MONTHLY INCOME
PREFERRED SECURITIES, SERIES A
Dated as of ___________ __, 199_
Pursuant to Section 13.01 of the Amended and Restated Limited Partnership
Agreement of WMECO Capital, L.P. dated ____________ __, 199__ (as amended from
time to time, the "Partnership Agreement"), Western Massachusetts Electric
Company ("WMECO"), as general partner (the "General Partner") of WMECO Capital,
L.P. (the "Partnership"), desiring to state the designations, rights,
privileges, restrictions, preferences, voting rights, and other terms and
conditions of a new series of Preferred Partner Interests, hereby authorizes
and establishes such new series of Preferred Partner Interests having the
designations, rights, privileges, restrictions, and other terms and provisions
set forth below. Each capitalized term used but not defined herein shall have
the meaning set forth in the Partnership Agreement.
(a) Designation. [*****Number of interests in the series*****] interests
of the Partnership with an aggregate liquidation preference of $ [***** $25
times number of interests in the series *****] of the Preferred Partner
Interests of the Partnership, and a liquidation preference of $25 per Preferred
Partner Interest, are hereby designated as "__% Cumulative Monthly Income
Preferred Securities, Series A" (hereinafter the "Series A Preferred Partner
Interests"). The Certificates evidencing the Series A Preferred Partner
Interests shall be substantially in the form attached hereto as Exhibit A. The
proceeds of the Series A Preferred Partner Interests shall be loaned to WMECO
in return for the __% Subordinated Debentures, Series A, due 20__ of WMECO
issued pursuant to an Indenture dated as of _______________, 199_ between WMECO
and Bankers Trust Company, as Trustee (the "Indenture") and bearing interest at
an annual rate equal to the annual distribution rate on the Series A Preferred
Partner Interests and having certain payment and redemption provisions which
correspond to the payment and redemption provisions of the Series A Preferred
Partner Interests (the "Series A Debentures").
(b) Distributions on the Series A Preferred Partner Interests.
(1) The Preferred Partners who hold the Series A Preferred
Partner Interests shall be entitled to receive, to the extent set
forth in paragraph (b)(2) hereof, cumulative, preferential cash
distributions at a rate per annum of ___% of the stated liquidation
preference of $25 per Series A Preferred Partner Interest, calculated
in accordance with Section 13.02(a)(1) of the Partnership Agreement
("Series A Preferred Partner Distributions"). Series A Preferred
Partner Distributions will be payable in United States dollars
monthly in arrears on the last day of each calendar month of each
year; provided, however, that in the event that any date on which
Series A Preferred Partner Distributions are payable is not a
<PAGE>
-2-
Business Day, then payment of such Series A Preferred Partner
Distributions will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date. The Series A Preferred Partner
Distributions will be cumulative from the date of original issue, and
the cumulative portion from such date to _____________ __, 199__
shall be payable on ______________ __, 19__.
(2) Series A Preferred Partner Distributions shall be paid to
the extent that the Partnership has (x) funds on hand legally
available therefor, as determined by the General Partner, and (y)
cash on hand sufficient to permit such payments. Series A Preferred
Partner Distributions will be deferred if and for so long as WMECO
defers interest payments to the Partnership on the Series A
Debentures. Accrued and unpaid Series A Preferred Partner
Distributions will accrue additional distributions after the
scheduled payment date therefor ("Additional Distributions") in
respect thereof, to the extent permitted by law, at the distribution
rate per annum for the Series A Preferred Partner Interests. Such
Additional Distributions shall be payable at the time the related
deferred Series A Preferred Partner Distribution is paid, but in any
event by the end of such deferral period. Series A Preferred Partner
Distributions will be payable to the Series A Preferred Partners as
they appear on the books and records of the Partnership on the
relevant record dates, which will be one Business Day prior to the
relevant payment dates; provided, however, that if the Series A
Preferred Partner Interests are not held by a securities depositary,
the General Partner shall have the right to change such record dates.
(c) Redemption.
(1) The Series A Preferred Partner Interests are subject to
redemption at the option of the General Partner, in whole or in part,
from time to time, on or after _________ __, ____, at the redemption
price of $25 per Series A Preferred Partner Interest plus accumulated
and unpaid Series A Preferred Partner Distributions to the date fixed
for redemption, together with any accrued Additional Distributions
thereon (the "Redemption Price").
(2) Upon redemption or payment at maturity of the Series A
Debentures, the proceeds from such redemption or payment of the
Series A Debentures shall be applied to redeem the Series A Preferred
Partner Interests at the Redemption Price.
(3) If at any time after the issuance of the Series A Preferred
Partner Interests, an Investment Company Act Event shall occur and be
continuing, the General Partner shall (A) cause the Partnership to
redeem the Series A Preferred Partner Interests at the Redemption
Price, within 90 days following the occurrence of such Special Event,
or (B) dissolve the Partnership and cause the Partnership to
distribute the Series A Debentures to Holders of Series A Preferred
<PAGE>
-3-
Partner Interests in liquidation of the Partnership within 90 days
following the occurrence of such Special Event; provided, however,
that in the case of clause (B) above, the Partnership shall have
received an opinion of counsel (which may be regular tax counsel to
the Partnership or an affiliate, but not an employee thereof) to the
effect that such Holders will not recognize any gain or loss for
United States federal income tax purposes as a result of such
distribution.
(4) If at any time after the issuance of the Series A Preferred
Partner Interests, a Tax Event shall occur and be continuing, the
General Partner may (A) cause the Partnership to redeem the Series A
Preferred Partner Interests at the Redemption Price, within 90 days
following the occurrence of such Special Event, or (B) dissolve the
Partnership and cause the Partnership to distribute the Series A
Debentures to Holders of Series A Preferred Partner Interests in
liquidation of the Partnership within 90 days following the
occurrence of such Special Event; provided, however, that in the case
of clause (B) above, the Partnership shall have received an opinion
of counsel (which may be regular tax counsel to the Partnership or an
affiliate, but not an employee thereof) to the effect that such
Holders will not recognize any gain or loss for United States federal
income tax purposes as a result of such distribution.
(d) Liquidation Distribution.
(1) In the event of any voluntary or involuntary dissolution,
liquidation or winding up of the Partnership, holders of the Series A
Preferred Partner Interests at the time outstanding will be entitled
to receive out of the assets of the Partnership available for
distribution to holders of Preferred Partner Interests, after
satisfaction of liabilities to creditors as required by the Delaware
Act and before any distribution of assets is made to holders of the
general partner interests, but together with holders of every other
series of Preferred Partner Interests outstanding, an amount equal
to, in the case of holders of Series A Preferred Partner Interests,
the aggregate of the stated liquidation preference of $25 per Series
A Preferred Partner Interest plus accumulated and unpaid
distributions and Additional Distributions to the date of payment
(the "Liquidation Distribution").
(2) Notwithstanding the foregoing, the General Partner may
distribute the Series A Debentures to Holders of Series A Preferred
Partner Interests in liquidation of the Partnership pursuant to
paragraph (c)(3)(B) or (c)(4)(B) hereof. After the date fixed for
any such distribution, upon dissolution of the Partnership, (i) the
Series A Preferred Partner Interests will no longer be deemed to be
outstanding, (ii) DTC or its nominee, as the record Holder of the
Series A Preferred Partner Interests, will return the registered
global certificate or certificates representing the Series A
Preferred Partner Interests and will receive a registered global
certificate or certificates representing the Series A Debentures to
be delivered upon such distribution, and (iii) any certificates
representing Series A Preferred Partner Interests not held by DTC or
<PAGE>
-4-
its nominee will be deemed to represent Series A Debentures having a
principal amount and accrued and unpaid interest equal to the
aggregate of the stated liquidation preference of, and accrued and
unpaid Distributions on, such Series A Preferred Partner Interests
until such certificates are presented to the General Partner or its
agent for transfer or reissuance.
(e) Voting Rights. The holders of the Series A Preferred Partner
Interests shall have no voting rights except as provided in the Partnership
Agreement.
(f) Withholding. All payments by the Partnership in respect of the
Series A Preferred Partner Interests will be made without withholding or
deduction on account of any present or future taxes, duties or assessments
imposed by the United States or any state thereof, unless such withholding or
deduction is required by law.
(g) Subordination. The holders of Series A Preferred Partner Interests
are deemed, by acceptance of such Interests, to have (1) agreed that the Series
A Debentures issued pursuant to the Indenture are subordinate and junior in
right of payment to all general liabilities of WMECO as and to the extent
provided in the Indenture and (2) agreed that the Guaranty relating to the
Series A Preferred Partner Interests is subordinated and junior in right of
payment to all general liabilities of WMECO.
<PAGE>
-5-
IN WITNESS WHEREOF, the General Partner has executed this Action as of the
date and year first above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY,
as General Partner
By_________________________________
Name:
Title:
<PAGE>
Exhibit A
Certificate No. _____ CUSIP No. _____
Certificate Evidencing Preferred Partner Interests
of
WMECO Capital, L.P.
__% Cumulative Monthly Income Preferred Securities,
Series A
Liquidation preference $25 per Preferred Partner Interest
WMECO Capital, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
___________ (______________) fully paid Preferred Partner Interests of the
Partnership designated the __% Cumulative Monthly Income Preferred Securities,
Series A (liquidation preference $25 per Preferred Partner Interest) (the
"Series A Preferred Partner Interests") representing preferred limited partner
interests in the Partnership transferable on the books and records of the
Partnership, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer. The powers,
preferences and special rights and limitations of the Series A Preferred
Partner Interests are set forth in, and this Certificate and the Series A
Preferred Partner Interests represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Limited Partnership Agreement dated as of ___________, 199__ of the Partnership
as the same may, from time to time, be amended (the "Partnership Agreement")
authorizing the issuance of the Series A Preferred Partner Interests and
determining, along with any actions of the General Partner of the Partnership
as authorized under the Partnership Agreement, the powers, preferences, and
other special rights and limitations, regarding distributions, voting,
redemption, and otherwise and other matters relating to the Series A Preferred
Partner Interests. The Partnership will furnish a copy of the Partnership
Agreement to the Holder without charge upon written request to the Partnership
at its principal place of business or registered office. The Holder is
entitled to the benefits of the Payment and Guaranty Agreement of Western
Massachusetts Electric Company, dated as of _______, 199__ (the "Guaranty")
relating to the Preferred Partner Interests, and of the Indenture between
Western Massachusetts Electric Company and ____________________, as Trustee,
dated as of ____________, 199__ (the "Indenture"), under and pursuant to which
the related series of Subordinated Debentures are issued and outstanding, in
either case to the extent provided therein. The Holder is further entitled to
enforce such rights of the Partnership under the Indenture to the extent
provided therein and in the Partnership Agreement. The Partnership will
<PAGE>
-2-
furnish a copy of the Guaranty and the Indenture to the Holder without charge
upon written request to the Partnership at its principal place of business or
registered office.
The Holder, by accepting this Certificate, is deemed to have (1) agreed
that the Subordinated Debentures issued pursuant to the Indenture are
subordinate and junior in right of payment to all general liabilities of
Western Massachusetts Electric Company as and to the extent provided in the
Indenture and (2) agreed that the Guaranty is subordinate and junior in right
of payment to all general liabilities of Western Massachusetts Electric
Company. Upon receipt of this Certificate, the Holder is admitted to the
Partnership as a Preferred Partner, is bound by the Partnership Agreement and
is entitled to the benefits thereunder.
Capitalized terms used herein but not defined shall have the meaning given
them in the Partnership Agreement.
IN WITNESS WHEREOF, the Partnership has executed this Certificate this
____ day of ________________, 199__.
WMECO CAPITAL, L.P.
By Western Massachusetts Electric Company,
its General Partner
By_________________________________
Name:
Title:
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.1
_________________________________________________________________
_________________________________________________________________
INDENTURE
Dated as of _________, 199
By and Between
THE CONNECTICUT LIGHT AND POWER COMPANY
and
BANKERS TRUST COMPANY,
as Trustee
Providing for the Issuance of
Junior Subordinated Deferrable Interest Debentures in Series
and for
___% Junior Subordinated Deferrable Interest Debentures, Series A
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Incorporation By Reference Of Trust Indenture Act. . . 6
Section 1.03 Rules Of Construction . . . . . . . . . . . . . . . . . 6
Section 1.04 Acts Of Holders . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES . . . . . . . . 8
Section 2.01 Issue Of Debentures Generally. . . . . . . . . . . . . 8
Section 2.02 Form Of The Series A Debentures; Denominations . . . . 9
Section 2.03 Payment Of Principal And Interest . . . . . . . . . . . 9
Section 2.04 Execution And Authentication . . . . . . . . . . . . . 10
Section 2.05 Registrar And Paying Agent . . . . . . . . . . . . . . 10
Section 2.06 Paying Agent To Hold Money In Trust . . . . . . . . . . 11
Section 2.07 Debentureholder Lists . . . . . . . . . . . . . . . . . 11
Section 2.08 Transfer And Exchange . . . . . . . . . . . . . . . . . 11
Section 2.09 Replacement Debentures . . . . . . . . . . . . . . . . 12
Section 2.10 Outstanding Debentures; Determinations Of Holders'
Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.11 Temporary Debentures . . . . . . . . . . . . . . . . . 13
Section 2.12 Cancellation . . . . . . . . . . . . . . . . . . . . . 14
Section 2.13 Defaulted Interest . . . . . . . . . . . . . . . . . . 14
ARTICLE 3
REDEMPTION . . . . . . . . . . . . . . . 14
Section 3.01 Redemption; Notice To Trustee . . . . . . . . . . . . . 14
Section 3.02 Selection Of Debentures To Be Redeemed . . . . . . . . 15
Section 3.03 Notice Of Redemption . . . . . . . . . . . . . . . . . 15
Section 3.04 Effect Of Notice Of Redemption . . . . . . . . . . . . 16
Section 3.05 Deposit Of Redemption Price . . . . . . . . . . . . . . 16
Section 3.06 Debentures Redeemed In Part . . . . . . . . . . . . . . 16
ARTICLE 4
COVENANTS . . . . . . . . . . . . . . . 16
Section 4.01 Payment Of Debentures . . . . . . . . . . . . . . . . . 16
Section 4.02 Prohibition Against Dividends, Etc. During An Event Of
Default Or An Extension Period . . . . . . . . . . . . 17
Section 4.03 SEC Reports . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.04 Compliance Certificates . . . . . . . . . . . . . . . . 18
Section 4.05 Relationship With CL&P Capital . . . . . . . . . . . . 18
Section 4.06 Further Instruments And Acts . . . . . . . . . . . . . 18
Section 4.07 Payments For Consents . . . . . . . . . . . . . . . . . 18
ARTICLE 5
SUCCESSOR CORPORATION . . . . . . . . . . . . 19
Section 5.01 When The Company May Merge, Etc . . . . . . . . . . . . 19
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . . . . . . 19
Section 6.01 Events Of Default . . . . . . . . . . . . . . . . . . . 19
Section 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . 21
Section 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . 21
Section 6.04 Waiver Of Past Defaults . . . . . . . . . . . . . . . . 21
Section 6.05 Control By Majority Or The Special Representatives . . 22
<PAGE>
Section 6.06 Limitation On Suits . . . . . . . . . . . . . . . . . . 22
Section 6.07 Rights Of Holders To Receive Payment . . . . . . . . . 23
Section 6.08 Collection Suit By The Trustee . . . . . . . . . . . . 23
Section 6.09 The Trustee May File Proofs Of Claim . . . . . . . . . 23
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.11 Undertaking For Costs . . . . . . . . . . . . . . . . . 24
Section 6.12 Waiver Of Stay, Extension, Or Usury Laws . . . . . . . 24
ARTICLE 7
THE TRUSTEE . . . . . . . . . . . . . . . 25
Section 7.01 Duties Of The Trustee . . . . . . . . . . . . . . . . . 25
Section 7.02 Rights Of The Trustee . . . . . . . . . . . . . . . . . 26
Section 7.03 Individual Rights Of The Trustee . . . . . . . . . . . 26
Section 7.04 The Trustee's Disclaimer . . . . . . . . . . . . . . . 26
Section 7.05 Notice Of Defaults . . . . . . . . . . . . . . . . . . 27
Section 7.06 Reports By Trustee To Holders . . . . . . . . . . . . . 27
Section 7.07 Compensation And Indemnity . . . . . . . . . . . . . . 27
Section 7.08 Replacement Of Trustee . . . . . . . . . . . . . . . . 28
Section 7.09 Successor Trustee By Merger . . . . . . . . . . . . . . 29
Section 7.10 Eligibility; Disqualification . . . . . . . . . . . . . 29
Section 7.11 Preferential Collection Of Claims Against The Company . 29
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES . . . . . 29
Section 8.01 Satisfaction And Discharge Of Indenture . . . . . . . . 29
Section 8.02 Application By Trustee Of Funds Deposited For Payment
Of Debentures . . . . . . . . . . . . . . . . . . . . . 30
Section 8.03 Repayment Of Monies Held By Paying Agent . . . . . . . 30
Section 8.04 Return Of Monies Held By The Trustee And Paying Agent
Unclaimed For Three Years . . . . . . . . . . . . . . . 30
ARTICLE 9
AMENDMENTS . . . . . . . . . . . . . . . 31
Section 9.01 Without Consent Of Holders . . . . . . . . . . . . . . 31
Section 9.02 With Consent Of Holders . . . . . . . . . . . . . . . . 31
Section 9.03 Compliance With Trust Indenture Act . . . . . . . . . . 32
Section 9.04 Revocation And Effect Of Consents, Waivers And
Actions . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.05 Notation On Or Exchange Of Debentures . . . . . . . . . 33
Section 9.06 Trustee To Sign Supplemental Indentures . . . . . . . . 33
Section 9.07 Effect Of Supplemental Indentures . . . . . . . . . . . 33
ARTICLE 10
SUBORDINATION . . . . . . . . . . . . . . 33
Section 10.01 Debentures Subordinated To Senior Indebtedness . . . . 33
Section 10.02 Priority And Payment Of Proceeds In Certain Events;
Remedies Standstill . . . . . . . . . . . . . . . . . . 34
Section 10.03 Payments Which May Be Made Prior To Notice. . . . . . . 35
Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be
Impaired . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.05 Trustee May Take Action To Effectuate Subordination . . 35
Section 10.06 Subrogation . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.07 Obligations Of Company Unconditional; Reinstatement . . 36
Section 10.08 Trustee Entitled To Assume Payments Not Prohibited In
Absence Of Notice . . . . . . . . . . . . . . . . . . . 37
Section 10.09 Right Of Trustee To Hold Senior Indebtedness . . . . . 37
ARTICLE 11
MISCELLANEOUS . . . . . . . . . . . . . . 37
<PAGE>
Section 11.01 Trust Indenture Act Controls . . . . . . . . . . . . . 37
Section 11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.03 Communication By Holders With Other Holders . . . . . . 38
Section 11.04 Certificate And Opinion As To Conditions Precedent . . 39
Section 11.05 Statements Required In Certificate Or Opinion . . . . . 39
Section 11.06 Severability Clause . . . . . . . . . . . . . . . . . . 39
Section 11.07 Rules By Trustee, Paying Agent And Registrar . . . . . 39
Section 11.08 Legal Holidays . . . . . . . . . . . . . . . . . . . . 40
Section 11.09 Governing Law . . . . . . . . . . . . . . . . . . . . . 40
Section 11.10 No Recourse Against Others . . . . . . . . . . . . . . 40
Section 11.11 Successors . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.12 Multiple Original Copies Of This Indenture . . . . . . 40
Section 11.13 No Adverse Interpretation Of Other Agreements . . . . . 40
Section 11.14 Table Of Contents; Headings, Etc . . . . . . . . . . . 40
Section 11.15 Benefits Of The Indenture . . . . . . . . . . . . . . . 41
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
EXHIBIT A--FORM OF DEBENTURE
<PAGE>
TRUST INDENTURE PROVISION OF
ACT SECTION INDENTURE
Section 310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) Not Applicable
(b) 7.08; 7.10; 11.01
(c) Not Applicable
Section 311 (a) 7.11
(b) 7.11
(c) Not Applicable
Section 312 (a) 2.07
(b) 11.03
(c) 11.03
Section 313 (a) 7.06
(b)(1) Not Applicable
(b)(2) 7.06
(c) 7.06; 11.02
(d) 7.06
Section 314 (a) 4.03; 4.04; 11.02
(b) Not Applicable
(c)(1) 2.02; 11.04
(c)(2) 2.02; 11.04
(c)(3) Not Applicable
(d) Not Applicable
(e) 11.05
(f) Not Applicable
Section 315 (a) 7.01(2)
(b) 7.05; 11.02
(c) 7.01(1)
(d) 7.01(3)
(e) 6.11
Section 316 (a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) Not Applicable
(a)(last sentence) 2.10
(b) 6.07
(c) 1.04
Section 317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.06
Section 318 (a) 11.01
Note: This Cross-Reference Table shall not, for any purpose, be deemed to
be part of the Indenture.
<PAGE>
INDENTURE
INDENTURE, dated as of _____________ ____, 199__ by and between The
Connecticut Light and Power Company, a Connecticut corporation (together with
its permitted successors and assigns, the "Company"), and Bankers Trust
Company, a New York corporation, as trustee (the "Trustee").
WHEREAS, the Company is the general partner of CL&P Capital, L.P., a
Delaware limited partnership, which intends to issue in series from time to
time its limited partner interests and to loan the proceeds thereof, together
with the investment by the Company in CL&P Capital, L.P., to the Company.
WHEREAS, in order to evidence its intention to make such loans and to
accept the Debentures (as hereinafter defined) as evidence of such loans, and
its approval of the terms of the Series A Debentures (as hereinafter defined),
CL&P Capital, L.P. has joined in this Indenture.
WHEREAS, the Company has authorized the issuance of the Series A
Debentures to evidence its obligations with respect to a loan from CL&P
Capital, L.P. of the proceeds of a series of its preferred limited partner
interests designated __% Cumulative Monthly Income Preferred Securities, Series
A, and the related investment by the Company in CL&P Capital, L.P., and to
provide therefor, the Company has duly authorized the execution and delivery of
this Indenture, all things necessary to make the Series A Debentures, when duly
issued and executed by the Company and authenticated and delivered hereunder,
the valid obligations of the Company, and to make this Indenture a valid and
binding agreement of the Company, in accordance with its terms, having been
done.
NOW THEREFORE:
The Company and the Trustee, intending to be legally bound hereby, each
agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the securities issued hereunder, including
the Series A Debentures:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
For purposes of this Indenture, each of the following terms shall have the
meaning set forth below:
"Act" has the meaning specified in Section 1.04 hereof.
"Additional Interest" means, with respect to the Series A Debentures, any
amounts which CL&P Capital would be required to pay as taxes, duties,
assessments, or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, with
respect to the Series A Debentures. With respect to any other series of
Debentures, "Additional Interest" shall have the meaning set forth in the
supplemental indenture creating such series.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. When used with respect to any Person,
<PAGE>
"control" means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means any day that is not a Saturday, a Sunday, or a day on
which banking institutions in The City of New York, the State of Connecticut,
or the State of Delaware are authorized or required to close.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations, or other equivalents of or interests in
(however designated) corporate stock, including any preferred stock.
"CL&P Capital" means CL&P Capital, L.P., a Delaware limited partnership.
"Company" means The Connecticut Light and Power Company, a Connecticut
corporation, together with its permitted successors and assigns.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian, or similar official under any Bankruptcy Law.
"Debentureholder" or "Holder" means a Person in whose name a Debenture is
registered on the Registrar's books.
"Debentures" shall mean any of the securities of any series issued,
authenticated, and delivered under this Indenture.
"Default" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default pursuant to Section 6.01 hereof.
"Event of Default" has the meaning specified in Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" means a period, up to 60 consecutive months, in which
the Company elects to extend the interest payment period on the Debentures
pursuant to Section 4.01(b) hereof; provided that no Extension Period shall
extend beyond the Stated Maturity date or the date of redemption of any series
of Subordinated Debentures.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board.
"General Partner" means the Company, as the general partner of CL&P
Capital, or any successor general partner of CL&P Capital pursuant to the
Limited Partnership Agreement.
<PAGE>
"Guaranty Agreement" means that certain Payment and Guaranty Agreement
issued by the Company to irrevocably and unconditionally agree to pay Guaranty
Payments (as defined in the Guaranty Agreement) to the holders of the Preferred
Securities.
"Holder" or "Debentureholder" means any Person in whose name a Debenture
is registered on the Registrar's books.
"Indebtedness" means, without duplication, (i) the principal of and
premium, if any, in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities, debentures, bonds, or
other similar instruments issued by the Company; (ii) all Capital Lease
Obligations of the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company, and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement of any obligor on any letter of credit, banker's acceptance,
security purchase facility, or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (i) through (iii) above) entered into in the ordinary
course of business of the Company to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third Business Day following receipt by the Company of a demand
for reimbursement following payment on the letter of credit); (v) all
obligations of the type referred to in clauses (i) through (iv) of other
Persons and all dividends of other Persons (other than the Preferred
Securities) for the payment of which, in either case, the Company is
responsible or liable as obligor, guarantor, or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other Persons
secured by any lien on any property or asset of the Company (whether or not
such obligation is assumed by the Company), the amount of such obligation being
deemed to be the lesser of the value of such property or assets or the amount
of the obligation so secured; provided, however, that Indebtedness will not
include endorsements of negotiable instruments for collection in the ordinary
course of business.
"Indenture" means this indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Issue Date" means, with respect to a series of Debentures, the date on
which the Debentures of such series are originally issued.
"Legal Holiday" has the meaning specified in Section 11.08 hereof.
"Limited Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of CL&P Capital dated _________, 199 , as it may be
amended from time to time.
"Notice of Default" has the meaning specified in Section 6.01 hereof.
"Officer" means, with respect to any corporation, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary, or any Assistant Secretary
of such corporation.
"Officer's Certificate" means a written certificate containing the
applicable information specified in Sections 11.04 and 11.05 hereof, signed in
<PAGE>
the name of the Company by any one of its Officers, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion containing the applicable
information specified in Sections 11.04 and 11.05 hereof, by legal counsel who
is reasonably acceptable to the Trustee.
"Paying Agent" has the meaning specified in Section 2.05 hereof.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof, or any
other entity.
"Preferred Securities" means the limited partner interests issued from
time to time in series by CL&P Capital.
"Record Date", with respect to any series of the Debentures, means the
date set to determine the Holders of such series entitled to payment of
interest or principal or to vote, consent, make a request, or exercise any
other right associated with such series.
"Redemption Date", with respect to any Debenture to be redeemed, means the
date specified for the redemption of such Debenture in accordance with the
terms thereof and Article 3 hereof.
"Redemption Price", with respect to any Debenture to be redeemed, means
the price at which it is to be redeemed pursuant to this Indenture and such
Debenture.
"Register" has the meaning specified in Section 2.05 hereof.
"Registrar" has the meaning specified in Section 2.05 hereof.
"Regular Record Date", with respect to an interest payment on the
Debentures of a series, means the date set forth in the Debentures of such
series for the determination of Holders entitled to receive payment of interest
on the next succeeding interest payment date.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means all Indebtedness, except for Indebtedness that
is by its terms subordinated to or pari passu with the Debentures.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include any Indebtedness between or among the Company and any
Affiliates.
"Series A Debentures" means any of the Company's __% Junior Subordinated
Deferrable Interest Debentures, Series A issued under this Indenture.
"Series A Preferred Securities" means the __% Cumulative Monthly Income
Preferred Securities, Series A, issued by CL&P Capital.
"Special Representative" means a special representative appointed by the
holders of the Preferred Securities pursuant to Section 13.02(d) of the Limited
Partnership Agreement.
<PAGE>
"Stated Maturity", with respect to any Debenture, means the date specified
in the Debenture as the fixed date on which the principal of the Debenture is
due and payable.
"Subsidiary" means any corporation, association, partnership, or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Company, (ii) the Company and one or more
Subsidiaries, or (iii) one or more Subsidiaries.
"Successor" has the meaning specified in Section 5.01 hereof.
"TIA" means the Trust Indenture Act of 1939, as amended and as in effect
on the date of the execution and delivery of this Indenture; provided, however,
that if the TIA is amended after such date, TIA means, to the extent required
by any such amendment, the TIA as so amended.
"Trust Officer" means, when used with respect to the Trustee, the chairman
or vice-chairman of the board of directors, the chairman or vice-chairman of
the executive committee of the board of directors, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any account officer or assistant account officer, the controller and
any assistant controller, or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" means, with respect to a corporation, all classes of
Capital Stock then outstanding of such corporation normally entitled to vote in
elections of directors.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of
which (other than directors' qualifying shares) is owned by the Company or
another Wholly Owned Subsidiary.
Section 1.02 Incorporation By Reference Of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in and made a part of this Indenture. When so
incorporated, the following TIA terms in such provisions correspond to the
terms used in this Indenture as follows:
The "Commission" means the SEC.
The "indenture securities" means the Debentures.
<PAGE>
An "indenture security holder" means a Debentureholder.
The "indenture to be qualified" means this Indenture.
The "indenture trustee" or the "institutional trustee" means the Trustee.
The "obligor" on the indenture securities means the Company and any other
obligor on the Debentures.
All other TIA terms used in this Indenture that are defined in the TIA,
either directly or by reference therein, or defined by SEC rule, have the
meanings assigned to them by such definitions.
Section 1.03 Rules Of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and words in the plural
include the singular; and
(6) unless used with a particular Article, Section, or other subdivision,
"herein," "hereof," and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section, or
other subdivision.
Section 1.04 Acts Of Holders.
Any request, demand, authorization, direction, notice, consent, waiver, or
other action provided by this Indenture to be given or taken by Holders, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved in any manner which the Trustee deems sufficient.
The ownership of Debentures shall be proved by the Register.
Any request, demand, authorization, direction, notice, consent, waiver, or
other Act of the Holder of any Debenture shall bind every future Holder of the
same Debenture and the holder of every Debenture issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted, or suffered to be done by the Trustee or the Company in
<PAGE>
reliance thereon, whether or not notation of such action is made upon such
Debenture.
If the Company solicits from the Holders any request, demand,
authorization, direction, notice, consent, waiver, or other Act, the Company
may, at its option, by or pursuant to a resolution of its Board of Directors,
fix in advance a Record Date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver, or
other Act, but the Company shall have no obligation to do so. If such a Record
Date is fixed, such request, demand, authorization, direction, notice, consent,
waiver, or other Act may be given before or after such Record Date, but only
Holders of record at the close of business on such Record Date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver, or
other Act, and for that purpose the outstanding Debentures shall be computed as
of such Record Date.
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES
Section 2.01 Issue Of Debentures Generally.
The aggregate principal amount of the Debentures which may be
authenticated and delivered under this Indenture is limited to the aggregate
stated liquidation preference of the Preferred Securities plus the capital
contributions to CL&P Capital by its General Partner.
The Debentures may be issued in one or more series as from time to time
shall be authorized by the Board of Directors.
The Debentures of each series and the Trustee's certificate of
authentication shall be substantially in the forms to be attached as exhibits
to this Indenture or the supplemental indenture providing for their issuance,
with such insertions, omissions, substitutions, and other variations as are
required or permitted by this Indenture, and may have such letters, numbers, or
other marks of identification or designation and such legends or endorsements
printed, lithographed, or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which the
Debentures may be listed, or to conform to usage. Each Debenture shall be
dated the date of its authentication.
The several series of Debentures may differ from the Series A Debentures,
and as and between series, in respect of any or all of the following matters:
(1) designation;
(2) date or dates of maturity, which may be serial;
(3) interest rate or method of determination of the interest rate and
whether Additional Interest will be payable;
(4) interest payment dates and the Regular Record Dates therefor;
(5) Issue Date;
<PAGE>
(6) authorized denominations;
(7) the place or places for the payment of principal (and premium, if
any) and for the payment of interest;
(8) limitation upon the aggregate principal amount of Debentures of the
series which may be issued;
(9) the optional and mandatory redemption provisions, if any;
(10) provisions, if any, for any sinking or analogous fund with respect to
the Debentures of such series; and
(11) any other provisions expressing or referring to the terms and
conditions upon which the Debentures of such series are to be issued
under this Indenture which are not in conflict with the provisions of
this Indenture;
in each case as determined and specified by the Board of Directors. The
Trustee shall not authenticate and deliver Debentures of any series (other than
the Series A Debentures) upon initial issue unless the terms and conditions of
such series shall have been set forth in a supplemental indenture entered into
between the Company and the Trustee as provided in Section 9.01 hereof.
Section 2.02 Form Of The Series A Debentures; Denominations.
The Series A Debentures and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A attached hereto. The terms and
provisions contained in the Series A Debentures, as set forth in such Exhibit
A, shall constitute, and are hereby expressly made, a part of this Indenture.
The Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
The Trustee shall authenticate and make available for delivery Series A
Debentures for original issue in the aggregate principal amount of
$[*****_____________*****] to evidence the Company's obligation with respect to
the loan from CL&P Capital, upon a resolution of the Board of Directors and a
written order of the Company signed by two Officers of the Company, but without
any further action by the Company. Such order shall specify the amount of the
Series A Debentures to be authenticated and the date on which the original
issue of Debentures is to be authenticated and delivered. The aggregate
principal amount of Series A Debentures outstanding at any time may not exceed
$[***** ___________ *****], except as provided in Section 2.09 hereof.
The Series A Debentures shall be issuable only in registered form without
coupons and only in denominations of $25.00 and any integral multiple thereof.
Section 2.03 Payment Of Principal And Interest.
The principal of and interest on the Debentures of any series, as well as
any premium thereon in the case of redemption thereof prior to maturity, shall
be payable at the office of the Paying Agent in the coin or currency of the
United States of America which at the time is legal tender for public and
private debts. Each Debenture shall be dated its Issue Date. Interest on the
Debentures shall be computed on the basis of a 360-day year composed of twelve
30-day months.
The interest on any Debenture which is payable and is punctually paid or
duly provided for on any interest payment date for Debentures of that series
shall be paid to the person in whose name the Debenture is registered at the
<PAGE>
close of business on the Regular Record Date therefor. In the event that any
Debenture of a particular series or portion thereof is called for redemption,
and the Redemption Date is subsequent to the Regular Record Date with respect
to any interest payment date and prior to such interest payment date, interest
on such Debenture will be paid upon presentation and surrender of such
Debenture to the Paying Agent.
Section 2.04 Execution And Authentication.
The Debentures shall be executed on behalf of the Company by its Chief
Executive Officer, its President, or one of its Vice Presidents, under its
corporate seal imprinted or reproduced thereon attested by its Secretary or one
of its Assistant Secretaries. The signature of any such Officer on the
Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals who
were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication duly executed by the Trustee by manual signature
of an authorized officer, and such certificate upon any Debenture shall be
conclusive evidence, and the only evidence, that such Debenture has been duly
authenticated and made available for delivery hereunder.
The Trustee shall act as the initial authenticating agent. Thereafter, the
Trustee may appoint an authenticating agent. An authenticating agent may
authenticate Debentures whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as a Paying Agent to deal
with the Company or an Affiliate of the Company.
Section 2.05 Registrar And Paying Agent.
The Company shall maintain or cause to be maintained, within or outside
the State of Connecticut an office or agency where the Debentures may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Debentures may be presented or surrendered for purchase
or payment (the "Paying Agent"), and an office or agency where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served. The Registrar shall keep a register (the "Register") of the
Debentures and of their transfer and exchange. The Company may have one or
more co-Registrars and one or more additional Paying Agents. The term Paying
Agent includes any additional paying agent. The corporate trust office of the
Trustee at Four Albany Street, New York, New York 10006, Attention: Corporate
Trust Department, shall initially be the Registrar and agent for service of
notice or demands on the Company, and the Company shall initially be the Paying
Agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, or co-Registrar (if not the Trustee or the Company).
The agreement shall implement the provisions of this Indenture that relate to
such agent. The Company shall give prompt written notice to the Trustee of any
change of location of such office or agency. If at any time the Company shall
fail to maintain or cause to be maintained any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices, and demands may be made or served at the
<PAGE>
address of the Trustee set forth in Section 11.02 hereof. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar, Paying Agent, or agent for service of notices or
demands, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07 hereof. The Company or any
Affiliate of the Company may act as Paying Agent, Registrar or co-Registrar, or
agent for service of notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Debentures may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in location of any such other office or agency.
Section 2.06 Paying Agent To Hold Money In Trust.
Except as otherwise provided herein, prior to each due date of the
principal and interest on any Debenture, the Company shall deposit with the
Paying Agent a sum of money sufficient to pay such principal, premium (if any),
and interest so becoming due. The Company shall require each Paying Agent
(other than the Trustee or the Company) to agree in writing that such Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal, premium, if any, and
interest on the Debentures and shall notify the Trustee of any default by the
Company in making any such payment. At any time during the continuance of any
such default, the Paying Agent shall, upon the request of the Trustee,
forthwith pay to the Trustee all money so held in trust and account for any
money disbursed by it. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any money disbursed
by it. Upon doing so, the Paying Agent shall have no further liability for the
money so paid over to the Trustee. If the Company, a Subsidiary, or an
Affiliate of either of them acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund.
Section 2.07 Debentureholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Debentureholders. If the Trustee is not the Registrar, the Company shall cause
to be furnished to the Trustee on or before the Record Date for each interest
payment date and at such other times as the Trustee may request in writing,
within five Business Days of such request, a list in such form as the Trustee
may reasonably require of the names and addresses of Debentureholders, provided
that during any deferral period, such information will be provided every six
months and upon request of the Trustee.
Section 2.08 Transfer And Exchange.
When Debentures are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Debentures of the same series of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Debentures, all at the Registrar's request.
Every Debenture presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
<PAGE>
satisfactory to the Company and the Registrar duly executed by the Holder or
his attorney duly authorized in writing.
The Company shall not charge a service charge for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to pay all taxes, assessments, or other governmental charges that may be
imposed in connection with the transfer or exchange of the Debentures from the
Debentureholder requesting such transfer or exchange (other than any exchange
of a temporary Debenture for a definitive Debenture not involving any change in
ownership).
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (1) any Debenture for a period beginning at
the opening of business 15 days before the mailing of a notice of redemption of
Debentures and ending at the close of business on the day of such mailing, or
(2) any Debenture selected, called, or being called for redemption, except, in
the case of any Debenture to be redeemed in part, the portion thereof not to be
redeemed.
Section 2.09 Replacement Debentures.
If (1) any mutilated Debenture is surrendered to the Company or the
Trustee, or (2) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss, or theft of any Debenture, and there is
delivered to the Company and the Trustee such Debenture or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Debenture has been acquired by a bona
fide purchaser, the Company shall execute in exchange for any such mutilated
Debenture or in lieu of any such destroyed, lost, or stolen Debenture, a new
Debenture of like tenor and principal amount, bearing a number not
contemporaneously outstanding, and the Trustee shall authenticate and make such
new Debenture available for delivery.
In case any such mutilated, destroyed, lost, or stolen Debenture has
become or is about to become due and payable, or is about to be redeemed by the
Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Debenture, pay or purchase such Debenture, as the case
may be.
Upon the issuance of any new Debentures under this Section 2.09, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Debenture issued pursuant to this Section 2.09 in lieu of any
mutilated, destroyed, lost, or stolen Debenture shall constitute an original
additional contractual obligation of the Company whether or not the mutilated,
destroyed, lost, or stolen Debenture shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
ratably with any and all other Debentures duly issued hereunder.
The provisions of this Section 2.09 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost, or stolen Debentures.
Section 2.10 Outstanding Debentures; Determinations Of Holders' Action.
Debentures outstanding at any time are all the Debentures authenticated by
the Trustee except for those canceled by it, those delivered to it for
<PAGE>
cancellation, those mutilated, destroyed, lost, or stolen Debentures referred
to in Section 2.09 hereof, those redeemed by the Company pursuant to Article 3
hereof, and those described in this Section 2.10 as not outstanding. A
Debenture does not cease to be outstanding because the Company or a Subsidiary
or Affiliate thereof holds the Debenture; provided, however, that in
determining whether the Holders of the requisite principal amount of Debentures
have given or concurred in any request, demand, authorization, direction,
notice, consent, or waiver hereunder, Debentures owned by the Company, a
Subsidiary, or an Affiliate shall be disregarded and deemed not to be
outstanding.
Subject to the foregoing, only Debentures outstanding at the time of such
determination shall be considered in any such determination (including
determinations pursuant to Articles 3, 6 and 9 hereof).
If a Debenture is replaced pursuant to Section 2.09 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Debenture is held by a bona fide purchaser.
If the Paying Agent (other than the Company) holds, in accordance with
this Indenture, at maturity or on a Redemption Date, money sufficient to pay
the Debentures payable on that date, then immediately on the date of maturity
or such Redemption Date, as the case may be, such Debentures shall cease to be
outstanding, and interest, if any, on such Debentures shall cease to accrue.
Section 2.11 Temporary Debentures.
So long as CL&P Capital shall hold all of the Debentures, the Company may
execute temporary Debentures, and upon the Company's written request, signed by
two Officers of the Company, the Trustee shall authenticate and make such
temporary Debentures available for delivery. Temporary Debentures shall be
printed, lithographed, typewritten, mimeographed, or otherwise produced in any
authorized denomination, substantially of the tenor of the definitive
Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions, and other variations as the Officers of
the Company executing such Debentures may determine, as conclusively evidenced
by their execution of such Debentures.
After the preparation of definitive Debentures, the temporary Debentures
shall be exchangeable for definitive Debentures of the same series upon
surrender of the temporary Debentures at the office or agency of the Company
designated for such purpose pursuant to Section 2.05 hereof, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Debentures, the Company shall execute a like principal amount of definitive
Debentures of authorized denominations, and the Trustee, upon written request
of the Company signed by two Officers of the Company, shall authenticate and
make such Debentures available for delivery in exchange therefor. Until so
exchanged, the temporary Debentures shall in all respects be entitled to the
same benefits under this Indenture as definitive Debentures.
Section 2.12 Cancellation.
All Debentures surrendered for payment, redemption by the Company pursuant
to Article 3 hereof, or registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Debentures previously authenticated
and made available for delivery hereunder which the Company may have acquired
in any manner whatsoever, and all Debentures so delivered shall be promptly
canceled by the Trustee. The Company may not reissue or issue new Debentures
<PAGE>
to replace Debentures it has paid or delivered to the Trustee for cancellation.
No Debentures shall be authenticated in lieu of or in exchange for any
Debentures canceled as provided in this Section 2.12, except as expressly
permitted by this Indenture. All canceled Debentures held by the Trustee shall
be destroyed by the Trustee, and the Trustee shall deliver a certificate of
destruction to the Company.
Section 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on the Debentures, it
shall pay the defaulted interest to the Persons who are Holders on a subsequent
special Record Date, and such special Record Date, as used in this Section 2.13
with respect to the payment of any defaulted interest, shall mean the 15th day
next preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15 days before
the subsequent special Record Date, the Company shall mail to each Holder and
to the Trustee a notice that states the subsequent special Record Date, the
payment date, and the amount of defaulted interest to be paid.
The Company may also pay defaulted interest in any other lawful manner.
ARTICLE 3
REDEMPTION
Section 3.01 Redemption; Notice To Trustee.
(a) The Series A Debentures are subject to redemption prior to maturity
as provided in the form thereof.
(b) The redemption terms for any additional series of Debentures shall be
as specified in the supplemental indenture creating such series of Debentures.
(c) If any or all of the Debentures are to be redeemed pursuant to
paragraphs (a) or (b) above, the Company shall give notice by first class mail,
postage prepaid, to the Trustee within 45 days prior to the date of such
redemption. Any such notice of redemption shall state the date and price of
redemption.
Section 3.02 Selection Of Debentures To Be Redeemed.
If less than all the outstanding Debentures are to be redeemed at any
time, the Trustee shall select the Debentures to be redeemed on a pro rata
basis, by lot or any other method the Trustee considers fair and appropriate.
The Trustee shall make the selection at least 30 but not more than 60 days
before the Redemption Date from outstanding Debentures not previously called
for redemption. Provisions of this Indenture that apply to Debentures called
for redemption also apply to portions of Debentures called for redemption. The
Trustee shall notify the Company promptly of the Debentures or portions of
Debentures to be redeemed. Notwithstanding the foregoing, if a partial
redemption would result in the delisting a series of the Preferred Securities
by any national securities exchange or other organization on which such series
is then listed, the Partnership may only redeem such series of the Preferred
Securities in whole.
Section 3.03 Notice Of Redemption.
So long as CL&P Capital remains the sole Debentureholder, no notice of any
redemption of Debentures will be required. In the event and at such time that
<PAGE>
CL&P Capital ceases to be the sole Debentureholder, at least 30 days but not
more than 60 days prior to a Redemption Date, the Trustee shall mail or cause
to be mailed a notice of redemption by first-class mail, postage prepaid, to
each Holder of Debentures to be redeemed at the Holder's last address, as it
appears on the Register. At the Company's written request, the Trustee shall
give the notice of redemption in the Company's name and at its expense.
The notice shall identify the Debentures to be redeemed, the provision of
the Debentures or this Indenture pursuant to which the Debentures called for
redemption are being redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Debentures called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) if fewer than all the outstanding Debentures are to be redeemed, the
identification and principal amounts of the particular Debentures to be
redeemed and that, on and after the Redemption Date, upon surrender of such
Debentures, a new Debenture or Debentures in principal amount equal to the
unredeemed portion thereof will be issued; and
(6) that, unless the Company does not make such redemption payment,
interest will cease to accrue on Debentures called for redemption on and after
the Redemption Date.
The notice may state that it is subject to the deposit or segregation of
the redemption monies on or before the date fixed for redemption in accordance
with Section 3.05, and which notice shall be of no effect unless such monies
are so deposited or segregated on or before such date.
Section 3.04 Effect Of Notice Of Redemption.
If (1) the notice of redemption is not conditioned upon the deposit or
segregation of the redemption monies on or before the date fixed for
redemption, or (2) the notice of redemption is conditioned upon such deposit or
segregation of redemption monies and such monies are so deposited or
segregated, then the Debentures called for redemption shall become due and
payable on the Redemption Date and at the Redemption Price and such Debentures
shall, upon the later of the Redemption Date and the date such Debentures are
surrendered to the Paying Agent, be paid at the Redemption Price, plus accrued
interest to the Redemption Date.
Section 3.05 Deposit Of Redemption Price.
On or prior to a Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate is the Paying Agent, shall
segregate and hold in trust or cause such Affiliate to segregate and hold in
trust) money sufficient to pay the Redemption Price of, and accrued interest
on, all Debentures to be redeemed on that date. The Paying Agent shall return
to the Company any money not required for the purpose stated in this Section
3.05.
Section 3.06 Debentures Redeemed In Part.
<PAGE>
Upon surrender of a Debenture that is redeemed in part, the Trustee shall
authenticate for the Holder a new Debenture equal in principal amount to the
unredeemed portion of such Debenture.
ARTICLE 4
COVENANTS
Section 4.01 Payment Of Debentures.
(a) The Company shall pay the principal of and premium, if any, and
interest (including Additional Interest, if any, and interest accruing on or
after the filing of a petition in bankruptcy or reorganization relating to the
Company, whether or not a claim for post-filing interest is allowed in such
proceeding) on the Debentures on (or prior to) the dates and in the manner
provided in the Debentures and/or pursuant to this Indenture. An installment
of principal or interest shall be considered paid on the applicable date due if
on such date the Trustee or the Paying Agent holds, in accordance with this
Indenture, money sufficient to pay all of such installment then due. The
Company shall pay interest on overdue principal and interest on overdue
installments of interest (including Additional Interest, if any, and interest
accruing during an Extension Period and/or on or after the filing of a petition
in bankruptcy or reorganization relating to the Company, whether or not a claim
for post-filing interest is allowed in such proceeding), to the extent
permitted by applicable law, at the rate per annum borne by the Debentures,
which interest on overdue interest shall accrue from the date such amounts
became overdue.
(b) Notwithstanding paragraph (a) of this Section 4.01 or any other
provision herein or in the Debentures to the contrary, the Company shall have
the right in its sole and absolute discretion at any time and from time to time
while the Debentures are outstanding, so long as no Event of Default has
occurred and is continuing, to extend the interest payment period for one or
more series of the Debentures for up to 60 consecutive months, provided that
such Extension Period shall not extend beyond the Stated Maturity, or
acceleration thereof, or any date of redemption, of the Debentures, and
provided further that at the end of each Extension Period the Company shall pay
all interest, including Additional Interest, if any, then accrued and unpaid
(together with interest thereon compounded monthly at the rate specified for
the applicable series of Debentures, to the extent permitted by applicable
law). Prior to the termination of an Extension Period, the Company may shorten
or may further extend the interest payment period, provided that such Extension
Period together with all such further extensions may not exceed 60 consecutive
months. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may select a new Extension Period subject to the
above requirements. The Company shall give the Trustee notice of its selection
of such extended or shortened interest payment period on or prior to the
earliest of (1) one Business Day prior to the date on which the related
distribution by CL&P Capital on the Preferred Securities would otherwise be
payable, (2) one Business Day prior to the date CL&P Capital is required to
give notice of the record or payment date of such related distribution to any
national securities exchange on which the Preferred Securities are then listed
or other applicable self-regulatory organization, and (3) two Business Days
prior to such record date. The Company shall give or cause the Trustee to give
such notice of the Company's selection of such extended interest payment period
to the Holders and, if CL&P Capital is the sole holder of such series of the
Subordinated Debentures, to the holders of the corresponding series of the
Preferred Securities.
<PAGE>
Section 4.02 Prohibition Against Dividends, Etc. During An Event Of
Default Or An Extension Period.
Neither the Company nor any Subsidiary shall declare or pay any dividend
on, or redeem, purchase, acquire, or make a liquidation payment with respect
to, any of its Capital Stock (other than dividends paid by a Wholly Owned
Subsidiary) during an Extension Period or if at such time there shall have
occurred and be continuing any Default or Event of Default or if the Company
shall be in default with respect to its payment obligations under the Guaranty
Agreement.
Section 4.03 SEC Reports.
The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of its annual report and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the Company
is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. If the Company is not subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the
Trustee such information, documents, and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which are specified in Sections 13 of the Exchange Act. The Company
shall also comply with the provisions of Section 314(a) of the TIA.
Section 4.04 Compliance Certificates.
(a) The Company shall deliver to the Trustee within 90 days after the end
of each of the Company's fiscal years an Officer's Certificate, stating whether
or not the signer knows of any Default or Event of Default. Such certificate
shall contain a certification from the principal executive officer, principal
financial officer, or principal accounting officer of the Company as to his or
her knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this Section 4.04(a), such compliance
shall be determined without regard to any period of grace or requirement of
notice provided under this Indenture. If such Officer does know of such a
Default or Event of Default, the certificate shall describe any such Default or
Event of Default and its status. Such Officer's Certificate need not comply
with Sections 11.04 and 11.05 hereof.
(b) The Company shall deliver to the Trustee any information reasonably
requested by the Trustee in connection with the compliance by the Trustee or
the Company with the TIA.
Section 4.05 Relationship With CL&P Capital.
The Company agrees (i) to maintain, directly or indirectly through a
Wholly Owned Subsidiary, 100% ownership of the general partnership interests in
CL&P Capital; (ii) to cause the General Partner to maintain a capital account
balance in CL&P Capital equal to at least 3% of the total positive capital
account balances for CL&P Capital and, if necessary, to make additional
contributions to satisfy this requirement; (iii) to timely perform or cause to
be timely performed all of the duties of the General Partner of CL&P Capital
(including the duty to pay distributions on the Preferred Securities); and (iv)
to use its reasonable efforts to cause CL&P Capital to remain a limited
partnership and otherwise continue to be treated as a partnership for United
States federal income tax purposes.
Section 4.06 Further Instruments And Acts.
<PAGE>
Upon request of the Trustee, the Company shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
Section 4.07 Payments For Consents.
Neither the Company nor any Subsidiary shall, directly or indirectly, pay
or cause to be paid any consideration, whether by way of interest, fee, or
otherwise, to any Debentureholder for or as an inducement to any consent,
waiver, or amendment of any of the terms or provisions of this Indenture or the
Debentures unless such consideration is offered to be paid or agreed to be paid
to all Debentureholders who so consent, waive, or agree to amend in the time
frame set forth in the documents soliciting such consent, waiver, or agreement.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01 When The Company May Merge, Etc.
The Company may not consolidate with or merge with or into, or sell,
convey, transfer, or lease all or substantially all of its assets (either in
one transaction or a series of transactions) to, any Person unless:
(1) the Person formed by or surviving such consolidation or merger
or to which such sale, conveyance, transfer, or lease shall have been made
(the "Successor"), if other than the Company, (a) is organized and
existing under the laws of the United States of America or any State
thereof or the District of Columbia, and (b) shall expressly assume by a
supplemental indenture, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all the obligations of the Company
under the Debentures and this Indenture;
(2) immediately prior to and after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor as a result of such transaction as having been incurred by the
Successor at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing; and
(3) the Company delivers to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, sale,
conveyance, transfer, or lease and such supplemental indenture comply with
this Indenture.
The Successor will be the successor to the Company, and will be
substituted for, and may exercise every right and power and become the obligor
on the Debentures with the same effect as if the Successor had been named as
the Company herein, but, in the case of a sale, conveyance, transfer, or lease
of all or substantially all of the assets of the Company, the predecessor
Company will not be released from its obligation to pay the principal of,
premium, if any, and interest on the Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events Of Default.
<PAGE>
An "Event of Default" occurs if one of the following shall have occurred
and be continuing:
(1) The Company defaults in the payment, when due and payable, of
(a) interest, including Additional Interest, on any Debenture and the
default continues for a period of 10 days (whether or not payment is
prohibited by the provisions of Article 10 hereof or otherwise); provided,
that during an Extension Period, interest shall not be due and payable and
failure to pay interest on the Debentures shall not constitute a Default
or Event of Default hereunder, or (b) the principal of, or premium, if
any, on any Debentures when the same becomes due and payable at maturity,
acceleration, on any Redemption Date, or otherwise (whether or not payment
is prohibited by the provisions of Article 10 hereof or otherwise);
(2) The Company defaults in the performance of, or fails to comply
with, any of its other covenants or agreements in the Debentures or this
Indenture and such default or failure continues for 60 days after receipt
by the Company of a "Notice of Default";
(3) The Company, pursuant to or within the meaning of any Bankruptcy
Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against it in
an involuntary case or proceeding;
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property, and such Custodian is
not discharged within 60 days;
(d) makes a general assignment for the benefit of its
creditors; or
(e) admits in writing its inability to pay its debts generally
as they become due; or
(4) A court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company in an involuntary case or
proceeding;
(b) appoints a Custodian of the Company for all or
substantially all of its properties; or
(c) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in effect for 60
days.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree, or order of
any court or any order, rule, or regulation of any administrative or
governmental body.
A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company or the Holders of at least a majority in aggregate
principal amount of the Debentures at the time outstanding or the Special
<PAGE>
Representative notifies the Company and the Trustee of the Default and the
Company does not cure such Default within the time specified in clause (2)
above after receipt of such notice. Any such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default."
Section 6.02 Acceleration.
If any Event of Default, other than an Event of Default specified in
clause (3) or (4) occurs and is continuing, the Trustee, the Holders of not
less than 25% in principal amount of the Debentures then outstanding, or the
Special Representative, may declare the principal of all such Debentures due
and payable. Upon such a declaration, such principal and interest shall be due
and payable immediately.
If an Event of Default specified in clause (3) or (4) occurs, the
principal of and interest on all the Debentures shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Debentureholders.
The Special Representative or Holders of a majority in aggregate principal
amount of the Debentures at the time outstanding by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may, in its
own name or as trustee of an express trust, institute, pursue and prosecute any
proceeding, including any action at law or suit in equity or other judicial or
administrative proceeding, to collect the payment of principal of, premium, if
any, or interest on, the Debentures, to enforce the performance of any
provision of the Debentures or this Indenture or to obtain any other available
remedy.
The Trustee may maintain a proceeding even if it does not possess any of
the Debentures or does not produce any of the Debentures in the proceeding. A
delay or omission by the Trustee, the Special Representative, or any
Debentureholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 6.04 Waiver Of Past Defaults.
The Special Representative or the Holders of 66 2/3% in aggregate
principal amount of the Debentures at the time outstanding, by notice to the
Trustee, the Company, and CL&P Capital, may waive any Default or Event of
Default that has occurred and its consequences. When a Default or Event of
Default is waived, it is deemed cured and shall cease to exist, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any consequent right.
Section 6.05 Control By Majority Or The Special Representatives.
The Holders of a majority in aggregate principal amount of the Debentures
then outstanding or the Special Representative may direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee or
<PAGE>
of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Debentureholders or would involve the Trustee in personal
liability. The Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, including withholding notice to
the Holders of the Debentures of any series of any continuing Default (except
in the payment of the principal (other than any mandatory sinking fund payment)
of, premium, if any, or interest on, any Debentures of such series) if the
Trustee considers it in the interest of the Holders of such series of
Debentures to do so.
Section 6.06 Limitation On Suits.
Except as provided in Section 6.07 hereof, the Holders and the Special
Representative may not pursue any remedy with respect to this Indenture or the
Debentures unless:
(1) the Holders or the Special Representative gives to the Trustee
written notice stating that an Event of Default is continuing;
(2) the Holders or the Special Representative provides to the
Trustee reasonable security and indemnity against any loss, liability, or
expense satisfactory to the Trustee;
(3) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security and
indemnity; and
(4) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Debentures;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
Section 6.07 Rights Of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of the principal amount of or interest on the
Debentures held by such Holder, on or after the respective due dates expressed
in the Debentures (in the case of interest, as the same may be extended
pursuant to Section 4.01(b)) or any Redemption Date, or to bring suit for the
enforcement of any such payment on or after such respective dates shall not be
impaired or affected adversely without the consent of each such Holder.
Section 6.08 Collection Suit By The Trustee.
If an Event of Default described in Section 6.01(1) hereof occurs and is
continuing, the Trustee may, in its own name and as trustee of an express
trust, recover judgment against the Company or any other obligor upon the
Debentures for the whole amount owing with respect to the Debentures and the
amounts provided for in Section 6.07 hereof.
Section 6.09 The Trustee May File Proofs Of Claim.
<PAGE>
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition, or other
judicial proceeding relative to the Company or its properties or assets, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(1) to file and prove a claim for the whole amount of the
principal, premium, if any, and interest on the Debentures and to file
such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements, and advances of the Trustee, its
agents, and counsel) and of the Holders allowed in such judicial
proceeding; and
(2) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any
Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements, and advances of the Trustee, its
agents, and counsel, and any other amounts due the Trustee under Section
7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the
Debentures or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07
hereof;
SECOND: to Debentureholders for amounts due and unpaid on the
Debentures for the principal amount, Redemption Price, or interest,
if any, as the case may be, ratably, without preference or priority
of any kind, according to such amounts due and payable on the
Debentures; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a Record Date and payment date for any payment to
Debentureholders pursuant to this Section 6.10.
Section 6.11 Undertaking For Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant (other than the Trustee) in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a suit
<PAGE>
by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof or a suit by
Holders of more than 10% in aggregate principal amount of the Debentures at the
time outstanding, or a suit by the Special Representative.
Section 6.12 Waiver Of Stay, Extension, Or Usury Laws.
The Company covenants (to the extent permitted by applicable law) that it
will not at any time insist upon, or plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, that would
prohibit or forgive the Company from paying all or any portion of the principal
or premium, if any, or interest on, the Debentures as contemplated herein or
affect the covenants or the performance by the Company of its obligations under
this Indenture; and the Company (to the extent permitted by applicable law)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay, or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE 7
THE TRUSTEE
Section 7.01 Duties Of The Trustee.
(1) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(2) Except during the continuance of an Event of Default, (a) the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others; and (b) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(a) this paragraph (3) does not limit the effect of paragraph (2) of
this Section 7.01;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(4) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2), (3) and (5) of this Section 7.01 and
to Section 7.02 hereof.
<PAGE>
(5) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial
liability unless it receives security and indemnity reasonably satisfactory to
it against any loss, liability, or expense.
(6) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not
be liable for interest on any money held by it hereunder.
Section 7.02 Rights Of The Trustee.
(1) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate and, if appropriate, an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officer's Certificate and Opinion of Counsel.
(3) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers.
(5) The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered, or
omitted by it hereunder in good faith and in reliance thereon.
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders or the Special Representative pursuant to this Indenture,
unless such Holders or the Special Representative shall have offered to the
Trustee reasonable security and indemnity against the costs, expenses, and
liabilities which might be incurred by it in compliance with such request or
direction.
Section 7.03 Individual Rights Of The Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Debentures and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar, or co-Registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11 hereof.
Section 7.04 The Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Debentures, it shall not be accountable for the Company's use
of the proceeds from the Debentures, and it shall not be responsible for any
statement in this Indenture or the Debentures or any report or certificate
issued by the Company hereunder or any registration statement relating to the
Debentures (other than the Trustee's certificate of authentication), or the
determination as to which beneficial owners are entitled to receive any notices
hereunder.
<PAGE>
Section 7.05 Notice Of Defaults.
The Trustee shall mail to the Debentureholders, as their names and
addresses appear on the Register, notice of all Defaults known to the Trustee,
within 90 days after the occurrence thereof; provided, however, that in the
case of a Default described in Section 6.01(1) hereof, the Trustee may withhold
such notice if and so long as a committee of Trust Officers in good faith
determines that the withholding of such notice is in the interests of
Debentureholders. The second sentence of this Section 7.05 shall be in lieu of
the proviso to TIA Section 315(b). Said proviso is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 7.06 Reports By Trustee To Holders.
Within 60 days after each [****_______*****], beginning with the
[*****______*****] next following the date of the execution and delivery of
this Indenture, the Trustee shall transmit by mail, postage prepaid, to (i)
each Debentureholder, (ii) such other holders that have submitted their names
to the Trustee for such purpose, and (iii) any other persons identified in the
list of holders that the Company has provided to the Trustee pursuant to
Section 2.07 hereof, a brief report dated as of such [****______****] in
accordance with and to the extent required under TIA Section 313.
A copy of each report at the time of its mailing to Debentureholders shall
be filed with the Company, the SEC, and each securities exchange on which the
Debentures are listed. The Company agrees to promptly notify the Trustee
whenever the Debentures become listed on any securities exchange and of any
listing thereof.
Section 7.07 Compensation And Indemnity.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements, and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and advances of its agents and counsel),
including all reasonable expenses and advances incurred or made by the
Trustee in connection with any Event of Default or any membership on any
creditors' committee, except any such expense or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors, and
shareholders for, and to hold it harmless against, any and all loss,
liability, or expense, incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
Before, after, or during an Event of Default, the Trustee shall have a
claim and lien prior to the Debentures as to all property and funds held by it
hereunder for any amount owing it or any predecessor Trustee pursuant to this
<PAGE>
Section 7.07, except with respect to funds held in trust for the payment of
principal of, premium, if any, or interest on, particular Debentures.
The Company's payment obligations pursuant to this Section 7.07 are not
subject to Article 10 of this Indenture and shall survive the discharge of this
Indenture. When the Trustee renders services or incurs expenses after the
occurrence of an Event of Default specified in Section 6.01 hereof, the
compensation for services and expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08 Replacement Of Trustee.
The Trustee may resign by so notifying the Company in writing at least 30
days prior to the date of the proposed resignation; provided, however, no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.08. The Special Representative or the
Holders of a majority in aggregate principal amount of the Debentures at the
time outstanding may remove the Trustee by so notifying the Trustee in writing
and may appoint a successor Trustee, which shall be subject to the consent of
the Company unless an Event of Default has occurred and is continuing. The
Trustee shall resign if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers, and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Debentureholders. Subject to payment of all amounts owing to the
Trustee under Section 7.07 hereof and subject further to its lien under Section
7.07 hereof, the retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee. If a successor Trustee does not take
office within 30 days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company, the Special Representative, or the Holders of a
majority in aggregate principal amount of the Debentures at the time
outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Debentureholder may petition any court of competent jurisdiction for its
removal and the appointment of a successor Trustee.
Section 7.09 Successor Trustee By Merger.
If the Trustee consolidates with, merges, or converts into, or transfers
all or substantially all its corporate trust business or assets (including this
Trusteeship) to another corporation, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
<PAGE>
Section 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Sections
310(a)(1) and 310(a)(2). The Trustee (or any Affiliate thereof which has
unconditionally guaranteed the obligations of the Trustee hereunder) shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b). In determining whether the Trustee has conflicting interests
as defined in TIA Section 310(b)(l), the provisions contained in the proviso to
TIA Section 310(b)(1) shall be deemed incorporated herein.
Section 7.11 Preferential Collection Of Claims Against The Company.
If and when the Trustee shall be or become a creditor of the Company, the
Trustee shall be subject to the provisions of the TIA regarding the collection
of claims against the Company.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES
Section 8.01 Satisfaction And Discharge Of Indenture.
The Company shall be deemed to have paid and discharged the entire
indebtedness on any series of the Debentures outstanding on the date the
Company has irrevocably deposited or caused to be irrevocably deposited with
the Trustee or any Paying Agent as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders (1) cash
in an amount, or (2) U.S. Government Obligations, maturing as to principal and
interest at such times and in such amounts as will ensure the availability of
cash, or (3) a combination thereof, sufficient to pay the principal of,
premium, if any, and interest on all Debentures then outstanding, and on such
date the provisions of this Indenture with respect to the Debentures shall no
longer be in effect (except as to (1) the rights of registration of transfer,
substitution, and exchange of Debentures, (2) the replacement of apparently
mutilated, defaced, destroyed, lost, or stolen Debentures, (3) the rights of
the Holders to receive payments of principal thereof and interest thereon, (4)
the rights of the Holders as beneficiaries hereof with respect to the property
so deposited with the Trustee payable to all or any of them, (5) the obligation
of the Company to maintain an office or agency for payments on and registration
of transfer of the Debentures, and (6) the rights, obligations, and immunities
of the Trustee hereunder); and the Trustee shall, at the request and expense of
the Company, execute proper instruments acknowledging the same; provided that:
(A) no Default or Event of Default with respect to the Debentures
shall have occurred and be continuing on the date of such deposit or
occurs as a result of such deposit;
(B) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the defeasance contemplated by this provision have
been complied with; and
(C) the Company shall have delivered to the Trustee (i) either a
private Internal Revenue Service ruling or an Opinion of Counsel, in
either case to the effect that the Holders will not recognize income,
gain, or loss for United States federal income tax purposes as a result of
such deposit, defeasance, and discharge and will be subject to United
<PAGE>
States federal income tax on the same amount and in the manner and at the
same times as would have been the case if such deposit, defeasance, and
discharge had not occurred; and (ii) an Opinion of Counsel to the effect
that (a) the deposit shall not result in the Company, the Trustee, or the
trust being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (b) such deposit creates a valid
trust in which such Holders of the Debentures have the sole beneficial
ownership interest or that such Holders of the Debentures have a
nonavoidable first priority security interest in such trust.
Section 8.02 Application By Trustee Of Funds Deposited For Payment Of
Debentures.
Subject to Section 8.04 and Article 10 hereof, all monies deposited with
the Trustee pursuant to Section 8.01 hereof shall be held in trust and applied
by it to the payment, either directly or through any Paying Agent (including
the Company acting as its own Paying Agent), to the Holders for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
Section 8.03 Repayment Of Monies Held By Paying Agent.
In connection with the satisfaction and discharge of this Indenture, all
monies then held by any Paying Agent under this Indenture shall, upon demand of
the Company, be repaid to it or paid to the Trustee, and thereupon such Paying
Agent shall be released from all further liability with respect to such monies.
Section 8.04 Return Of Monies Held By The Trustee And Paying Agent
Unclaimed For Three Years.
Any monies deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal, premium, if any, or interest on, any Debenture
and not applied but remaining unclaimed for three years after the date when
such principal, premium, if any, or interest shall have become due and payable
shall unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law, be repaid to the Company by the Trustee
or such Paying Agent, and the Holder of such Debenture shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Company for any payment
which such Holder may be entitled to collect, and all liability of the Trustee
or any Paying Agent with respect to such monies shall thereupon cease.
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent Of Holders.
From time to time, when authorized by a resolution of the Board of
Directors, the Company and the Trustee, without notice to or the consent of any
Debentureholders or the Special Representative issued hereunder, may amend or
supplement this Indenture or the Debentures.
(1) to cure any ambiguity, defect, or inconsistency;
(2) to comply with Article 5 hereof;
<PAGE>
(3) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
(4) to make any other change that does not adversely affect the
rights of any Debentureholder;
(5) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA; and
(6) to set forth the terms and conditions, which shall not be
inconsistent with this Indenture, of the series of Debentures
(other than the Series A Debentures) that are to be issued
hereunder and the form of Debentures of such series.
Section 9.02 With Consent Of Holders.
With written consent of the Special Representative or the Holders of at
least 66 2/3% in aggregate principal amount of Debentures at the time
outstanding and affected by such amendment or waiver, the Company and the
Trustee may amend this Indenture or the Debentures or may waive future
compliance by the Company with any provisions of this Indenture or the
Debentures. However, without the consent of each Debentureholder affected,
such an amendment or waiver may not:
(1) reduce the principal amount of the Debentures the Holders of
which must consent to an amendment of the Indenture or a waiver;
(2) change the Stated Maturity of the principal of, or the interest
or rate of interest on, the Debentures, change adversely to the Holders
the redemption provisions of Article 3 hereof, or impair the right to
institute suit for the enforcement of any such payment or make any
Debenture payable in money or securities other than that stated in the
Debenture;
(3) make any change in Article 10 hereof that adversely affects the
rights of the Holders of the Debentures or any change to any other section
hereof that adversely affects their rights under Article 10 hereof;
(4) waive a Default in the payment of the principal of, premium, if
any, or interest on, any Debenture; or
(5) change Section 6.07 hereof.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
If certain Holders agree to defer or waive certain obligations of the
Company hereunder with respect to Debentures held by them, such deferral or
waiver shall not affect the rights of any other Holder to receive the payment
or performance required hereunder in a timely manner.
After an amendment or waiver under this Section 9.02 becomes effective,
the Company shall mail to the Special Representative and to each Holder a
notice briefly describing the amendment or waiver. Any failure of the Company
to mail such notices, or any defect therein, shall not, however, in any way
impair or affect the validity of such amendment or waiver.
Section 9.03 Compliance With Trust Indenture Act.
<PAGE>
Every supplemental indenture executed pursuant to this Article 9 shall
comply with the TIA.
Section 9.04 Revocation And Effect Of Consents, Waivers And Actions.
Until an amendment, waiver, or other action by Holders becomes effective,
a consent to it or any other action by a Holder of a Debenture hereunder is a
continuing consent by the Holder and every subsequent Holder of that Debenture
or portion of the Debenture that evidences the same obligation as the
consenting Holder's Debenture, even if notation of the consent, waiver, or
action is not made on the Debenture. However, any such Holder or subsequent
Holder may revoke the consent, waiver, or action as to such Holder's Debenture
or portion of the Debenture if the Trustee receives the notice of revocation
before the consent of the requisite aggregate principal amount of the
Debentures then outstanding has been obtained and not revoked. After an
amendment, waiver, or action becomes effective, it shall bind every
Debentureholder, except as provided in Section 9.02 hereof.
The Company may, but shall not be obligated to, fix a Record Date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If a Record Date is fixed, then, notwithstanding the first two
sentences of the immediately preceding paragraph, those Persons who were
Holders at such Record Date or their duly designated proxies, and only those
Persons, shall be entitled to consent to such amendment, supplement, or waiver,
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such Record Date. No such consent shall be valid or
effective for more than 90 days after such Record Date.
Section 9.05 Notation On Or Exchange Of Debentures.
Debentures authenticated and made available for delivery after the
execution of any supplemental indenture pursuant to this Article 9 may, and
shall, if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
made available for delivery by the Trustee in exchange for outstanding
Debentures.
Section 9.06 Trustee To Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article 9 if the supplemental indenture does not adversely affect the
rights, duties, liabilities, or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing such amendment the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Officer's Certificate and Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture.
Section 9.07 Effect Of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes and every Holder
of Debentures theretofore or thereafter authenticated and made available for
delivery hereunder shall be bound thereby.
ARTICLE 10
<PAGE>
SUBORDINATION
Section 10.01 Debentures Subordinated To Senior Indebtedness.
Notwithstanding the provisions of Section 6.01 hereof or any other
provision herein or in the Debentures, the Company and the Trustee or Holder by
his acceptance thereof (a) covenant and agree that all payments by the Company
of the principal of, premium, if any, and interest on the Debentures shall be
subordinated in accordance with the provisions of this Article 10 to the prior
payment in full, in cash or cash equivalents, of all amounts payable on, under,
or in connection with present or future Senior Indebtedness, and (b)
acknowledge that holders of Senior Indebtedness may rely on this Article 10.
Section 10.02 Priority And Payment Of Proceeds In Certain Events;
Remedies Standstill.
(1) Upon any payment or distribution of assets or securities of the
Company, as the case may be, of any kind or character, whether in cash,
property, or securities, upon any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether voluntary or involuntary,
or in bankruptcy, insolvency, receivership, or other proceedings, all amounts
payable on, under, or in connection with Senior Indebtedness (including any
interest accruing on such Senior Indebtedness subsequent to the commencement of
a bankruptcy, insolvency, or similar proceeding) shall first be paid in full in
cash, or payment provided for in cash or cash equivalents, before the Holders
or the Trustee on behalf of the Holders shall be entitled to receive from the
Company any payment of principal of or interest on or any other amounts in
respect of the Debentures or distribution of any assets or securities.
(2) No direct or indirect payment by or on behalf of the Company of
principal of or interest on the Debentures, whether pursuant to the terms of
the Debentures or upon acceleration or otherwise, shall be made if, at the time
of such payment, there exists (a) a default in the payment of all or any
portion of any Senior Indebtedness, and the Trustee has received written notice
thereof from the Company, one or more holders of Senior Indebtedness, or from
any trustee, representative, or agent therefor, or (b) any other default
affecting Senior Indebtedness permitting its acceleration, as the result of
which the maturity of Senior Indebtedness has been accelerated, and the Trustee
has received written notice from any trustee, representative, or agent for the
holders of the Senior Indebtedness or the holders of at least a majority in
principal amount of the Senior Indebtedness then outstanding of such default
and acceleration, and such default shall not have been cured or waived by or on
behalf of the holders of such Senior Indebtedness.
(3) If, notwithstanding the foregoing provision prohibiting such payment
or distribution, the Trustee or any Holder shall have received any payment on
account of the principal of or interest on the Debentures (other than as
permitted by subsections (1) and (2) of this Section 10.02) when such payment
is prohibited by this Section 10.02 and before all amounts payable on, under,
or in connection with Senior Indebtedness are paid in full in cash or cash
equivalents, then and in such event (subject to the provisions of Section 10.08
hereof) such payment or distribution shall be received and held in trust for
the holders of Senior Indebtedness and shall be paid over or delivered first to
the holders of the Senior Indebtedness remaining unpaid to the extent necessary
to pay such Senior Indebtedness in full in cash or cash equivalents.
(4) Upon any payment or distribution of assets or securities referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely upon
<PAGE>
any order or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation, or reorganization proceedings are
pending, and upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent, or other Person making any such payment or
distribution, delivered to the Trustee for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon, and all
other facts pertinent thereto or to this Article 10.
Section 10.03 Payments Which May Be Made Prior To Notice.
Nothing in this Article 10 or elsewhere in this Indenture shall prevent
(1) the Company, except under the conditions described in Section 10.02 hereof,
from making payments of principal of and interest on the Debentures or from
depositing with the Trustee any monies for such payments, or (2) the
application by the Trustee of any monies deposited with it for the purpose of
making such payments of principal of and interest on the Debentures, to the
Holders entitled thereto, unless at least one day prior to the date when such
payment would otherwise (except for the prohibitions contained in Section 10.02
hereof) become due and payable, the Trustee shall have received the written
notice provided for in Section 10.02(2) hereof.
Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be
Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
prejudiced or impaired by any act or failure to act in good faith by any such
holder, or by any noncompliance by the Company with the terms and provisions
and covenants herein regardless of any knowledge thereof any such holder may
have or otherwise be charged with.
The provisions of this Article 10 are intended to be for the benefit of,
and shall be enforceable directly by, the holders of Senior Indebtedness.
Notwithstanding anything to the contrary in this Article 10, to the extent
any Holders or the Trustee have paid over or delivered to any holder of Senior
Indebtedness any payment or distribution received on account of the principal
of or interest on the Debentures to which any other holder of Senior
Indebtedness shall be entitled to share in accordance with Section 10.02
hereof, no holder of Senior Indebtedness shall have a claim or right against
any Debentureholders or the Trustee with respect to any such payment or
distribution or as a result of the failure to make payments or distributions to
such other holder of Senior Indebtedness.
Section 10.05 Trustee May Take Action To Effectuate Subordination.
Each Debentureholder by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate, as between the holders of Senior Indebtedness and such
Debentureholders, the subordination as provided in this Article 10 and appoints
the Trustee as such Debentureholder's attorney-in-fact for any and all such
purposes.
Section 10.06 Subrogation.
Upon the payment in full, in cash or cash equivalents, of all Senior
Indebtedness, any Debentureholder shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
<PAGE>
assets of the Company made on such Senior Indebtedness until all accrued
interest on the principal of the Debentures shall be paid in full; and for the
purposes of such subrogation, no payments or distributions to holders of such
Senior Indebtedness of any cash, property, or securities to which such
Debentureholders would be entitled except for this Article 10, and no payment
pursuant to this Article 10 to holders of such Senior Indebtedness by such
Debentureholders shall, as between the Company, its creditors other than
holders of such Senior Indebtedness, and such Debentureholders, be deemed to be
a payment by the Company to or on account of such Senior Indebtedness, it being
understood that the provisions of this Article 10 are solely for the purpose of
defining the relative rights of the holders of such Senior Indebtedness, on the
one hand, and such Debentureholders, on the other hand.
If any payment or distribution to which such Debentureholders would
otherwise have been entitled but for the provisions of this Article 10 shall
have been applied, pursuant to this Article 10, to the payment of any Senior
Indebtedness, then and in such case, such Debentureholders shall be entitled to
receive from the holders of such Senior Indebtedness at the time outstanding
any payments or distributions received by such holders of Senior Indebtedness
in excess of the amount sufficient to pay, in cash or cash equivalents, all
such Senior Indebtedness in full.
Section 10.07 Obligations Of Company Unconditional; Reinstatement.
Nothing in this Article 10, or elsewhere in this Indenture or in any
Debenture, is intended to or shall impair, as between the Company and
Debentureholders, the obligations of the Company, which are absolute and
unconditional, to pay to such Debentureholders the principal of and interest on
the Debentures as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of such
Debentureholders and creditors of the Company other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee,
the Special Representative, or any Debentureholder from exercising all remedies
otherwise permitted by applicable law upon Default under this Indenture,
subject to the rights, if any, under this Article 10 of the holders of such
Senior Indebtedness in respect of cash, property, or securities of the Company
received upon the exercise of any such remedy.
The failure to make a scheduled payment of principal of, or interest on,
the Debentures by reason of Section 10.02 shall not be construed as preventing
the occurrence of an Event of Default under Section 6.01 hereof; provided,
however, that if (i) the conditions preventing the making of such payment no
longer exist, and (ii) such Debentureholders are made whole with respect to
such omitted payments, the Event of Default relating thereto (including any
failure to pay any accelerated amounts) shall be automatically waived, and the
provisions of the Indenture shall be reinstated as if no such Event of Default
had occurred.
Section 10.08 Trustee Entitled To Assume Payments Not Prohibited In
Absence Of Notice.
The Trustee or Paying Agent shall not be charged with the knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee or Paying Agent, unless and until the Trustee or Paying Agent shall
have received written notice thereof from the Company or one or more holders of
Senior Indebtedness or from any trustee or agent therefor or unless the Trustee
or Paying Agent otherwise had actual knowledge thereof; and, prior to the
receipt of any such written notice or actual knowledge, the Trustee or Paying
Agent may conclusively assume that no such facts exist.
<PAGE>
Unless at least one day prior to the date when by the terms of this
Indenture any monies are to be deposited by the Company with the Trustee or any
Paying Agent for any purpose (including, without limitation, the payment of the
principal of or the interest on any Debenture), the Trustee or Paying Agent
shall, except where no notice is necessary, have received with respect to such
monies the notice provided for in the preceding sentence, the Trustee or Paying
Agent shall have full power and authority to receive and apply such monies to
the purpose for which they were received. Neither of them shall be affected by
any notice to the contrary, which may be received by either on or after such
date. The foregoing shall not apply to the Paying Agent if the Company is
acting as Paying Agent. Nothing in this Section 10.08 shall limit the right of
the holders of Senior Indebtedness to recover payments as contemplated by
Section 10.02 hereof. The Trustee or Paying Agent shall be entitled to rely on
the delivery to it of a written notice by a Person representing himself,
herself or itself to be a holder of such Senior Indebtedness (or a trustee on
behalf of, or other representative of, such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder. The Trustee shall not be deemed
to have any duty to the holders of Senior Indebtedness.
Section 10.09 Right Of Trustee To Hold Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all of the rights
set forth in this Article 10 in respect of any Senior Indebtedness at any time
held by them to the same extent as any other holder of such Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee or any Paying Agent of any of its rights as such holder.
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of subsection (c) of Section 318 of the TIA,
the imposed duties shall control. The provisions of Sections 310 to 317,
inclusive, of the TIA that impose duties on any Person (including provisions
automatically deemed included in an indenture unless the indenture provides
that such provisions are excluded) are a part of and govern this Indenture,
except as, and to the extent, they are expressly excluded from this Indenture,
as permitted by the TIA.
Section 11.02 Notices.
Any notice or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows:
if to the Company:
The Connecticut Light and Power Company
Selden Street
Berlin, Connecticut 06037
Attention:
if to the Trustee:
<PAGE>
Bankers Trust Company
The Company or the Trustee, by giving notice to the other, may designate
additional or different addresses for subsequent notices of communications.
The Company shall notify the holder, if any, of Senior Indebtedness of any such
additional or different addresses of which the Company receives notice from the
Trustee.
Any notice or communication given to a Debentureholder other than CL&P
Capital shall be mailed to the Debentureholder at the Debentureholder's address
as it appears on the Register of the Registrar and shall be sufficiently given
if mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Debentureholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, or
co-Registrar.
Section 11.03 Communication By Holders With Other Holders.
Debentureholders may communicate, pursuant to TIA Section 312(b), with
other Debentureholders with respect to their rights under this Indenture or the
Debentures. The Trustee, the Company, the Registrar, the Paying Agent, and
anyone else shall have the protection afforded to the Trustee in TIA Section
312(c).
Section 11.04 Certificate And Opinion As To Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officer's Certificate (complying with Section 11.05 hereof)
stating that, in the opinion of such Officer, all conditions precedent to the
taking of such action have been complied with; and
(2) if appropriate, an Opinion of Counsel (complying with Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent to the taking of such action have been complied with.
Section 11.05 Statements Required In Certificate Or Opinion.
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(1) a statement that each Person making such Officer's Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officer's
Certificate or Opinion of Counsel are based;
<PAGE>
(3) a statement that, in the opinion of each such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement that, in the opinion of such Person, such covenant or
condition has been complied with; provided, however, that with respect to
matter of fact not involving any legal conclusion, an Opinion of Counsel may
rely on an Officer's Certificate or certificates of public officials.
Section 11.06 Severability Clause.
If any provision in this Indenture or in the Debentures shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 11.07 Rules By Trustee, Paying Agent And Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders. The Registrar and Paying Agent may make reasonable rules for
their functions.
Section 11.08 Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action to be
taken on such date shall be taken on the next succeeding day that is not a
Legal Holiday, and if such action is a payment in respect of the Debentures, no
principal or interest installment shall accrue for the intervening period;
except that if any interest payment is due on a Legal Holiday and the next
succeeding day is in the next succeeding calendar year, such payment shall be
made on the Business Day immediately preceding such Legal Holiday.
Section 11.09 Governing Law.
This Indenture and the Debentures shall be governed by and construed in
accordance with the laws of the State of Connecticut as applied to contracts
made and performed within the State of Connecticut, without regard to its
principles of conflicts of laws.
Section 11.10 No Recourse Against Others.
No director, officer, employee, or stockholder, as such, of the Company
shall have any liability for any obligations of the Company under the
Debentures or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. By accepting a Debenture, each
Debentureholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Debentures.
Section 11.11 Successors.
All agreements of the Company in this Indenture and the Debentures shall
bind its successors and assigns. All agreements of the Trustee in this
Indenture shall bind its successors and assigns.
Section 11.12 Multiple Original Copies Of This Indenture.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. Any signed copy shall be sufficient proof of this Indenture.
<PAGE>
Section 11.13 No Adverse Interpretation Of Other Agreements.
This Indenture may not be used to interpret another indenture, loan, or
debt agreement of the Company or any Subsidiary. Any such indenture, loan, or
debt agreement may not be used to interpret this Indenture.
Section 11.14 Table Of Contents; Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 11.15 Benefits Of The Indenture.
Except as expressly provided in Article 10 hereof, nothing in this
Indenture or in the Debentures, express or implied, shall give to any person,
other than the parties hereto and their successors hereunder, the Holders, and
the Special Representative, any benefit or any legal or equitable right,
remedy, or claim under this Indenture.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
THE CONNECTICUT LIGHT AND POWER COMPANY
By:
Name:
Title:
BANKERS TRUST COMPANY,
as Trustee
By:
Name:
Title:
CL&P CAPITAL, L.P.
By: The Connecticut Light and Power Company,
Its General Partner
By:
Solely for the purposes stated
in the recitals hereto.
<PAGE>
EXHIBIT A
[FORM OF DEBENTURE]
__% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES,
SERIES A DUE [***20__***]
[Stated Maturity not to exceed 49 years from date of issuance]
No. _________ $_______________
The Connecticut Light and Power Company, a Connecticut corporation (the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________________ or registered assigns, the principal sum of
__________________ Dollars on _____________, _____ (subject to extension at the
option of the Company, as set forth below) and to pay interest on said
principal sum from _____________, 199_ or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, monthly in arrears on the last day of each calendar
month of each year commencing ____________, 199_ at the rate of ______% per
annum plus Additional Interest, if any, until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any, and
(to the extent that payment of such interest is permitted by applicable law) on
any overdue installment of interest at the same rate per annum.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year composed of twelve 30-day months. In
the event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the person in whose name this Debenture is registered
at the close of business on the Regular Record Date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered holders on such Regular Record Date, and may be paid to the person
in whose name this Debenture is registered at the close of business on a
special Record Date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered holders of
this series of Debentures not less than 10 days prior to such special Record
Date, as more fully provided in the Indenture hereinafter referred to. The
principal of, premium, if any, and the interest on, this Debenture shall be
payable at the office or agency of the Company maintained for that purpose in
Berlin, Connecticut in any coin or currency of the United States of America
which at the time of payment is legal tender for payment of public and private
debts; provided, however, that payment of interest may be made at the option of
the Company by check mailed to the registered holder at such address as shall
appear in the Register. Notwithstanding the foregoing, so long as the holder
of this Debenture is CL&P Capital, the payment of the principal of, premium, if
any, and interest (including Additional Interest, if any) pursuant to this
Debenture will be made at such place and to such account as may be designated
by CL&P Capital.
<PAGE>
-A-2-
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture hereinafter referred to, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Debenture is issued subject to the provisions of such Indenture with respect
thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee
on as such Holder's behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided, and (c)
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes. Each Holder hereof, by such Holder's acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such Holder upon
said provisions.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Series A Debentures"), issued
under and pursuant to, and limited in aggregate principal amount as specified
in, an Indenture dated as of ________, 199 (the "Indenture"), executed and
delivered between the Company and Bankers Trust Company, as trustee (the
"Trustee"), to which reference is made to the Indenture for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company, and the holders of the Series A
Debentures and any other series of debentures issued thereunder (collectively
with the Series A Debentures, the "Debentures"). By the terms of the
Indenture, Debentures are issuable in series which may vary as to amount, date
of maturity, rate of interest, and in other respects as in the Indenture
provided.
The Series A Debentures are subject to redemption prior to maturity at the
option of the Company at the price of 100% of the principal amount thereof plus
accrued interest to the redemption date in whole or in part (i) from time to
time on or after ________ __, ____, (ii) from time to time upon or after the
dissolution of CL&P Capital, or (iii) from time to time if the Company shall be
required to pay Additional Interest thereon.
The Series A Debentures are subject to mandatory redemption prior to
maturity at the price of 100% of the principal amount thereof plus accrued
interest to the redemption date in whole or in part upon a redemption of the
Series A Preferred Securities (as defined in the Indenture), but if in part, in
an aggregate principal amount equal to the aggregate stated liquidation
preference of the Series A Preferred Securities redeemed.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default shall have occurred and be continuing, the
principal of all of the Debentures may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect, and subject to
the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Debenture upon compliance by the Company with certain
conditions set forth therein.
Subject to certain exceptions in the Indenture which require the consent
of every Holder, (i) the Indenture or the Series A Debentures may be amended
<PAGE>
-A-3-
with the written consent of the Holders of 66 2/3% in aggregate principal
amount of the Series A Debentures at the time outstanding, and (ii) certain
defaults or noncompliance with certain provisions may be waived by the written
consent of the Holders of 66 2/3% in aggregate principal amount of the Series A
Debentures at the time outstanding; provided, however, that if any other series
of the Debentures is at the time outstanding, then such written consents shall
be by Holders of 66 2/3% in aggregate principal amount of all Debentures at the
time outstanding and affected by such amendment or waiver. Subject to certain
exceptions in the Indenture, without the consent of any Debentureholder, the
Company and the Trustee may amend the Indenture or the Debentures to cure any
ambiguity, defect, or inconsistency, to bind a successor to the Company to the
obligations of the Indenture, to provide for uncertificated Debentures in
addition to certificated Debentures, to comply with any requirements of the
Securities and Exchange Commission in connection with the qualification of the
Indenture under the TIA, or to make any change that does not adversely affect
the rights of any Debentureholder. Amendments bind all Holders and subsequent
Holders.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
The Company shall have the right at any time during the term of the Series
A Debentures, from time to time to extend the interest payment period of such
Debentures to up to 60 months (the "Extension Period"), provided that such
Extension Period may not extend beyond the stated maturity date or the date of
redemption of the Debentures, and provided further that at the end of each
Extension Period the Company shall pay all interest then accrued and unpaid
(together with interest thereon compounded monthly at the rate specified for
the applicable series of Debentures, to the extent permitted by applicable
law). During an Extension Period the Company shall not declare or pay any
dividend on, redeem, or purchase any of its capital stock. Prior to the
termination of any Extension Period, the Company may shorten or further extend
the interest payment period, provided that such Extension Period together with
all such further extensions thereof shall not exceed 60 consecutive months. At
the termination of any such Extension Period and upon the payment of all
accrued and unpaid interest and any additional amounts then due, the Company
may select a new Extension Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on
the Debenture Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Debentures
of authorized denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to presentment for registration of transfer of this Debenture, the
Company, the Trustee, any paying agent, and any Registrar may deem and treat
the registered holder hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of ownership or
<PAGE>
-A-4-
writing hereon made by anyone other than the Registrar) for the purpose of
receiving payment of or on account of the principal hereof and premium, if any,
and interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any payment agent nor any Registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released. Debentures of this series so issued are
issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Debentures of this series are
exchangeable for a like aggregate principal amount of Debentures of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Debenture shall not be valid until an authorized officer of the
Trustee manually signs the Trustee's Certificate of Authentication below.
<PAGE>
-A-5-
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
THE CONNECTICUT LIGHT AND POWER COMPANY
By:
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Is One Of The Debentures Referred
To In The Within-mentioned Indenture.
BANKERS TRUST COMPANY
By:
Authorized Signatory
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign and
transfer this Debenture to:
(Insert assignee's social security or tax I.D. number)
(Print or type assignee's name, address, and zip code)
and irrevocably appoint _________________________________ agent to transfer
this Debenture on the books of the Company. The agent may substitute another
to act for him.
Dated: ________________ Signature:
(Sign exactly as your name appears
on this Debenture)
Signature Guaranty:
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.2
_________________________________________________________________
_________________________________________________________________
INDENTURE
Dated as of _________, 199
By and Between
WESTERN MASSACHUSETTS ELECTRIC COMPANY
and
BANKERS TRUST COMPANY,
as Trustee
Providing for the Issuance of
Junior Subordinated Deferrable Interest Debentures in Series
and for
___% Junior Subordinated Deferrable Interest Debentures, Series A
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Incorporation By Reference Of Trust Indenture Act. . . 6
Section 1.03 Rules Of Construction . . . . . . . . . . . . . . . . . 6
Section 1.04 Acts Of Holders . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES . . . . . . . . 8
Section 2.01 Issue Of Debentures Generally. . . . . . . . . . . . . 8
Section 2.02 Form Of The Series A Debentures; Denominations . . . . 9
Section 2.03 Payment Of Principal And Interest . . . . . . . . . . . 9
Section 2.04 Execution And Authentication . . . . . . . . . . . . . 10
Section 2.05 Registrar And Paying Agent . . . . . . . . . . . . . . 10
Section 2.06 Paying Agent To Hold Money In Trust . . . . . . . . . . 11
Section 2.07 Debentureholder Lists . . . . . . . . . . . . . . . . . 11
Section 2.08 Transfer And Exchange . . . . . . . . . . . . . . . . . 11
Section 2.09 Replacement Debentures . . . . . . . . . . . . . . . . 12
Section 2.10 Outstanding Debentures; Determinations Of Holders'
Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.11 Temporary Debentures . . . . . . . . . . . . . . . . . 13
Section 2.12 Cancellation . . . . . . . . . . . . . . . . . . . . . 14
Section 2.13 Defaulted Interest . . . . . . . . . . . . . . . . . . 14
ARTICLE 3
REDEMPTION . . . . . . . . . . . . . . . 14
Section 3.01 Redemption; Notice To Trustee . . . . . . . . . . . . . 14
Section 3.02 Selection Of Debentures To Be Redeemed . . . . . . . . 15
Section 3.03 Notice Of Redemption . . . . . . . . . . . . . . . . . 15
Section 3.04 Effect Of Notice Of Redemption . . . . . . . . . . . . 16
Section 3.05 Deposit Of Redemption Price . . . . . . . . . . . . . . 16
Section 3.06 Debentures Redeemed In Part . . . . . . . . . . . . . . 16
ARTICLE 4
COVENANTS . . . . . . . . . . . . . . . 16
Section 4.01 Payment Of Debentures . . . . . . . . . . . . . . . . . 16
Section 4.02 Prohibition Against Dividends, Etc. During An Event Of
Default Or An Extension Period . . . . . . . . . . . . 17
Section 4.03 SEC Reports . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.04 Compliance Certificates . . . . . . . . . . . . . . . . 18
Section 4.05 Relationship With WMECO Capital . . . . . . . . . . . . 18
Section 4.06 Further Instruments And Acts . . . . . . . . . . . . . 18
Section 4.07 Payments For Consents . . . . . . . . . . . . . . . . . 18
ARTICLE 5
SUCCESSOR CORPORATION . . . . . . . . . . . . 19
Section 5.01 When The Company May Merge, Etc . . . . . . . . . . . . 19
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . . . . . . 19
Section 6.01 Events Of Default . . . . . . . . . . . . . . . . . . . 19
Section 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . 21
Section 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . 21
Section 6.04 Waiver Of Past Defaults . . . . . . . . . . . . . . . . 21
Section 6.05 Control By Majority Or The Special Representatives . . 22
<PAGE>
Section 6.06 Limitation On Suits . . . . . . . . . . . . . . . . . . 22
Section 6.07 Rights Of Holders To Receive Payment . . . . . . . . . 23
Section 6.08 Collection Suit By The Trustee . . . . . . . . . . . . 23
Section 6.09 The Trustee May File Proofs Of Claim . . . . . . . . . 23
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.11 Undertaking For Costs . . . . . . . . . . . . . . . . . 24
Section 6.12 Waiver Of Stay, Extension, Or Usury Laws . . . . . . . 24
ARTICLE 7
THE TRUSTEE . . . . . . . . . . . . . . . 25
Section 7.01 Duties Of The Trustee . . . . . . . . . . . . . . . . . 25
Section 7.02 Rights Of The Trustee . . . . . . . . . . . . . . . . . 26
Section 7.03 Individual Rights Of The Trustee . . . . . . . . . . . 26
Section 7.04 The Trustee's Disclaimer . . . . . . . . . . . . . . . 26
Section 7.05 Notice Of Defaults . . . . . . . . . . . . . . . . . . 27
Section 7.06 Reports By Trustee To Holders . . . . . . . . . . . . . 27
Section 7.07 Compensation And Indemnity . . . . . . . . . . . . . . 27
Section 7.08 Replacement Of Trustee . . . . . . . . . . . . . . . . 28
Section 7.09 Successor Trustee By Merger . . . . . . . . . . . . . . 29
Section 7.10 Eligibility; Disqualification . . . . . . . . . . . . . 29
Section 7.11 Preferential Collection Of Claims Against The Company . 29
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES . . . . . 29
Section 8.01 Satisfaction And Discharge Of Indenture . . . . . . . . 29
Section 8.02 Application By Trustee Of Funds Deposited For Payment
Of Debentures . . . . . . . . . . . . . . . . . . . . . 30
Section 8.03 Repayment Of Monies Held By Paying Agent . . . . . . . 30
Section 8.04 Return Of Monies Held By The Trustee And Paying Agent
Unclaimed For Three Years . . . . . . . . . . . . . . . 30
ARTICLE 9
AMENDMENTS . . . . . . . . . . . . . . . 31
Section 9.01 Without Consent Of Holders . . . . . . . . . . . . . . 31
Section 9.02 With Consent Of Holders . . . . . . . . . . . . . . . . 31
Section 9.03 Compliance With Trust Indenture Act . . . . . . . . . . 32
Section 9.04 Revocation And Effect Of Consents, Waivers And
Actions . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.05 Notation On Or Exchange Of Debentures . . . . . . . . . 33
Section 9.06 Trustee To Sign Supplemental Indentures . . . . . . . . 33
Section 9.07 Effect Of Supplemental Indentures . . . . . . . . . . . 33
ARTICLE 10
SUBORDINATION . . . . . . . . . . . . . . 33
Section 10.01 Debentures Subordinated To Senior Indebtedness . . . . 33
Section 10.02 Priority And Payment Of Proceeds In Certain Events;
Remedies Standstill . . . . . . . . . . . . . . . . . . 34
Section 10.03 Payments Which May Be Made Prior To Notice. . . . . . . 35
Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be
Impaired . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.05 Trustee May Take Action To Effectuate Subordination . . 35
Section 10.06 Subrogation . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.07 Obligations Of Company Unconditional; Reinstatement . . 36
Section 10.08 Trustee Entitled To Assume Payments Not Prohibited In
Absence Of Notice . . . . . . . . . . . . . . . . . . . 37
Section 10.09 Right Of Trustee To Hold Senior Indebtedness . . . . . 37
ARTICLE 11
MISCELLANEOUS . . . . . . . . . . . . . . 37
<PAGE>
Section 11.01 Trust Indenture Act Controls . . . . . . . . . . . . . 37
Section 11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.03 Communication By Holders With Other Holders . . . . . . 38
Section 11.04 Certificate And Opinion As To Conditions Precedent . . 39
Section 11.05 Statements Required In Certificate Or Opinion . . . . . 39
Section 11.06 Severability Clause . . . . . . . . . . . . . . . . . . 39
Section 11.07 Rules By Trustee, Paying Agent And Registrar . . . . . 39
Section 11.08 Legal Holidays . . . . . . . . . . . . . . . . . . . . 40
Section 11.09 Governing Law . . . . . . . . . . . . . . . . . . . . . 40
Section 11.10 No Recourse Against Others . . . . . . . . . . . . . . 40
Section 11.11 Successors . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.12 Multiple Original Copies Of This Indenture . . . . . . 40
Section 11.13 No Adverse Interpretation Of Other Agreements . . . . . 40
Section 11.14 Table Of Contents; Headings, Etc . . . . . . . . . . . 40
Section 11.15 Benefits Of The Indenture . . . . . . . . . . . . . . . 41
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
EXHIBIT A--FORM OF DEBENTURE
<PAGE>
TRUST INDENTURE PROVISION OF
ACT SECTION INDENTURE
Section 310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) Not Applicable
(b) 7.08; 7.10; 11.01
(c) Not Applicable
Section 311 (a) 7.11
(b) 7.11
(c) Not Applicable
Section 312 (a) 2.07
(b) 11.03
(c) 11.03
Section 313 (a) 7.06
(b)(1) Not Applicable
(b)(2) 7.06
(c) 7.06; 11.02
(d) 7.06
Section 314 (a) 4.03; 4.04; 11.02
(b) Not Applicable
(c)(1) 2.02; 11.04
(c)(2) 2.02; 11.04
(c)(3) Not Applicable
(d) Not Applicable
(e) 11.05
(f) Not Applicable
Section 315 (a) 7.01(2)
(b) 7.05; 11.02
(c) 7.01(1)
(d) 7.01(3)
(e) 6.11
Section 316 (a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) Not Applicable
(a)(last sentence) 2.10
(b) 6.07
(c) 1.04
Section 317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.06
Section 318 (a) 11.01
Note: This Cross-Reference Table shall not, for any purpose, be deemed to
be part of the Indenture.
<PAGE>
INDENTURE
INDENTURE, dated as of _____________ ____, 199__ by and between Western
Massachusetts Electric Company, a Massachusetts corporation (together with its
permitted successors and assigns, the "Company"), and Bankers Trust Company, a
New York corporation, as trustee (the "Trustee").
WHEREAS, the Company is the general partner of WMECO Capital, L.P., a
Delaware limited partnership, which intends to issue in series from time to
time its limited partner interests and to loan the proceeds thereof, together
with the investment by the Company in WMECO Capital, L.P., to the Company.
WHEREAS, in order to evidence its intention to make such loans and to
accept the Debentures (as hereinafter defined) as evidence of such loans, and
its approval of the terms of the Series A Debentures (as hereinafter defined),
WMECO Capital, L.P. has joined in this Indenture.
WHEREAS, the Company has authorized the issuance of the Series A
Debentures to evidence its obligations with respect to a loan from WMECO
Capital, L.P. of the proceeds of a series of its preferred limited partner
interests designated __% Cumulative Monthly Income Preferred Securities, Series
A, and the related investment by the Company in WMECO Capital, L.P., and to
provide therefor, the Company has duly authorized the execution and delivery of
this Indenture, all things necessary to make the Series A Debentures, when duly
issued and executed by the Company and authenticated and delivered hereunder,
the valid obligations of the Company, and to make this Indenture a valid and
binding agreement of the Company, in accordance with its terms, having been
done.
NOW THEREFORE:
The Company and the Trustee, intending to be legally bound hereby, each
agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the securities issued hereunder, including
the Series A Debentures:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
For purposes of this Indenture, each of the following terms shall have the
meaning set forth below:
"Act" has the meaning specified in Section 1.04 hereof.
"Additional Interest" means, with respect to the Series A Debentures, any
amounts which WMECO Capital would be required to pay as taxes, duties,
assessments, or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, with
respect to the Series A Debentures. With respect to any other series of
Debentures, "Additional Interest" shall have the meaning set forth in the
supplemental indenture creating such series.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. When used with respect to any Person,
<PAGE>
"control" means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means any day that is not a Saturday, a Sunday, or a day on
which banking institutions in The City of New York, the Commonwealth of
Massachusetts, State of Connecticut, or the State of Delaware are authorized or
required to close.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations, or other equivalents of or interests in
(however designated) corporate stock, including any preferred stock.
"WMECO Capital" means WMECO Capital, L.P., a Delaware limited partnership.
"Company" means Western Massachusetts Electric Company, a Massachusetts
corporation, together with its permitted successors and assigns.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian, or similar official under any Bankruptcy Law.
"Debentureholder" or "Holder" means a Person in whose name a Debenture is
registered on the Registrar's books.
"Debentures" shall mean any of the securities of any series issued,
authenticated, and delivered under this Indenture.
"Default" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default pursuant to Section 6.01 hereof.
"Event of Default" has the meaning specified in Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" means a period, up to 60 consecutive months, in which
the Company elects to extend the interest payment period on the Debentures
pursuant to Section 4.01(b) hereof; provided that no Extension Period shall
extend beyond the Stated Maturity date or the date of redemption of any series
of Subordinated Debentures.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board.
"General Partner" means the Company, as the general partner of WMECO
Capital, or any successor general partner of WMECO Capital pursuant to the
Limited Partnership Agreement.
<PAGE>
"Guaranty Agreement" means that certain Payment and Guaranty Agreement
issued by the Company to irrevocably and unconditionally agree to pay Guaranty
Payments (as defined in the Guaranty Agreement) to the holders of the Preferred
Securities.
"Holder" or "Debentureholder" means any Person in whose name a Debenture
is registered on the Registrar's books.
"Indebtedness" means, without duplication, (i) the principal of and
premium, if any, in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities, debentures, bonds, or
other similar instruments issued by the Company; (ii) all Capital Lease
Obligations of the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company, and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement of any obligor on any letter of credit, banker's acceptance,
security purchase facility, or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (i) through (iii) above) entered into in the ordinary
course of business of the Company to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third Business Day following receipt by the Company of a demand
for reimbursement following payment on the letter of credit); (v) all
obligations of the type referred to in clauses (i) through (iv) of other
Persons and all dividends of other Persons (other than the Preferred
Securities) for the payment of which, in either case, the Company is
responsible or liable as obligor, guarantor, or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other Persons
secured by any lien on any property or asset of the Company (whether or not
such obligation is assumed by the Company), the amount of such obligation being
deemed to be the lesser of the value of such property or assets or the amount
of the obligation so secured; provided, however, that Indebtedness will not
include endorsements of negotiable instruments for collection in the ordinary
course of business.
"Indenture" means this indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Issue Date" means, with respect to a series of Debentures, the date on
which the Debentures of such series are originally issued.
"Legal Holiday" has the meaning specified in Section 11.08 hereof.
"Limited Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of WMECO Capital dated _________, 199 , as it may be
amended from time to time.
"Notice of Default" has the meaning specified in Section 6.01 hereof.
"Officer" means, with respect to any corporation, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary, or any Assistant Secretary
of such corporation.
"Officer's Certificate" means a written certificate containing the
applicable information specified in Sections 11.04 and 11.05 hereof, signed in
<PAGE>
the name of the Company by any one of its Officers, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion containing the applicable
information specified in Sections 11.04 and 11.05 hereof, by legal counsel who
is reasonably acceptable to the Trustee.
"Paying Agent" has the meaning specified in Section 2.05 hereof.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof, or any
other entity.
"Preferred Securities" means the limited partner interests issued from
time to time in series by WMECO Capital.
"Record Date", with respect to any series of the Debentures, means the
date set to determine the Holders of such series entitled to payment of
interest or principal or to vote, consent, make a request, or exercise any
other right associated with such series.
"Redemption Date", with respect to any Debenture to be redeemed, means the
date specified for the redemption of such Debenture in accordance with the
terms thereof and Article 3 hereof.
"Redemption Price", with respect to any Debenture to be redeemed, means
the price at which it is to be redeemed pursuant to this Indenture and such
Debenture.
"Register" has the meaning specified in Section 2.05 hereof.
"Registrar" has the meaning specified in Section 2.05 hereof.
"Regular Record Date", with respect to an interest payment on the
Debentures of a series, means the date set forth in the Debentures of such
series for the determination of Holders entitled to receive payment of interest
on the next succeeding interest payment date.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means all Indebtedness, except for Indebtedness that
is by its terms subordinated to or pari passu with the Debentures.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include any Indebtedness between or among the Company and any
Affiliates.
"Series A Debentures" means any of the Company's __% Junior Subordinated
Deferrable Interest Debentures, Series A issued under this Indenture.
"Series A Preferred Securities" means the __% Cumulative Monthly Income
Preferred Securities, Series A, issued by WMECO Capital.
"Special Representative" means a special representative appointed by the
holders of the Preferred Securities pursuant to Section 13.02(d) of the Limited
Partnership Agreement.
<PAGE>
"Stated Maturity", with respect to any Debenture, means the date specified
in the Debenture as the fixed date on which the principal of the Debenture is
due and payable.
"Subsidiary" means any corporation, association, partnership, or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Company, (ii) the Company and one or more
Subsidiaries, or (iii) one or more Subsidiaries.
"Successor" has the meaning specified in Section 5.01 hereof.
"TIA" means the Trust Indenture Act of 1939, as amended and as in effect
on the date of the execution and delivery of this Indenture; provided, however,
that if the TIA is amended after such date, TIA means, to the extent required
by any such amendment, the TIA as so amended.
"Trust Officer" means, when used with respect to the Trustee, the chairman
or vice-chairman of the board of directors, the chairman or vice-chairman of
the executive committee of the board of directors, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any account officer or assistant account officer, the controller and
any assistant controller, or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" means, with respect to a corporation, all classes of
Capital Stock then outstanding of such corporation normally entitled to vote in
elections of directors.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of
which (other than directors' qualifying shares) is owned by the Company or
another Wholly Owned Subsidiary.
Section 1.02 Incorporation By Reference Of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in and made a part of this Indenture. When so
incorporated, the following TIA terms in such provisions correspond to the
terms used in this Indenture as follows:
The "Commission" means the SEC.
The "indenture securities" means the Debentures.
<PAGE>
An "indenture security holder" means a Debentureholder.
The "indenture to be qualified" means this Indenture.
The "indenture trustee" or the "institutional trustee" means the Trustee.
The "obligor" on the indenture securities means the Company and any other
obligor on the Debentures.
All other TIA terms used in this Indenture that are defined in the TIA,
either directly or by reference therein, or defined by SEC rule, have the
meanings assigned to them by such definitions.
Section 1.03 Rules Of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and words in the plural
include the singular; and
(6) unless used with a particular Article, Section, or other subdivision,
"herein," "hereof," and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section, or
other subdivision.
Section 1.04 Acts Of Holders.
Any request, demand, authorization, direction, notice, consent, waiver, or
other action provided by this Indenture to be given or taken by Holders, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved in any manner which the Trustee deems sufficient.
The ownership of Debentures shall be proved by the Register.
Any request, demand, authorization, direction, notice, consent, waiver, or
other Act of the Holder of any Debenture shall bind every future Holder of the
same Debenture and the holder of every Debenture issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted, or suffered to be done by the Trustee or the Company in
<PAGE>
reliance thereon, whether or not notation of such action is made upon such
Debenture.
If the Company solicits from the Holders any request, demand,
authorization, direction, notice, consent, waiver, or other Act, the Company
may, at its option, by or pursuant to a resolution of its Board of Directors,
fix in advance a Record Date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver, or
other Act, but the Company shall have no obligation to do so. If such a Record
Date is fixed, such request, demand, authorization, direction, notice, consent,
waiver, or other Act may be given before or after such Record Date, but only
Holders of record at the close of business on such Record Date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver, or
other Act, and for that purpose the outstanding Debentures shall be computed as
of such Record Date.
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES
Section 2.01 Issue Of Debentures Generally.
The aggregate principal amount of the Debentures which may be
authenticated and delivered under this Indenture is limited to the aggregate
stated liquidation preference of the Preferred Securities plus the capital
contributions to WMECO Capital by its General Partner.
The Debentures may be issued in one or more series as from time to time
shall be authorized by the Board of Directors.
The Debentures of each series and the Trustee's certificate of
authentication shall be substantially in the forms to be attached as exhibits
to this Indenture or the supplemental indenture providing for their issuance,
with such insertions, omissions, substitutions, and other variations as are
required or permitted by this Indenture, and may have such letters, numbers, or
other marks of identification or designation and such legends or endorsements
printed, lithographed, or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which the
Debentures may be listed, or to conform to usage. Each Debenture shall be
dated the date of its authentication.
The several series of Debentures may differ from the Series A Debentures,
and as and between series, in respect of any or all of the following matters:
(1) designation;
(2) date or dates of maturity, which may be serial;
(3) interest rate or method of determination of the interest rate and
whether Additional Interest will be payable;
(4) interest payment dates and the Regular Record Dates therefor;
(5) Issue Date;
<PAGE>
(6) authorized denominations;
(7) the place or places for the payment of principal (and premium, if
any) and for the payment of interest;
(8) limitation upon the aggregate principal amount of Debentures of the
series which may be issued;
(9) the optional and mandatory redemption provisions, if any;
(10) provisions, if any, for any sinking or analogous fund with respect to
the Debentures of such series; and
(11) any other provisions expressing or referring to the terms and
conditions upon which the Debentures of such series are to be issued
under this Indenture which are not in conflict with the provisions of
this Indenture;
in each case as determined and specified by the Board of Directors. The
Trustee shall not authenticate and deliver Debentures of any series (other than
the Series A Debentures) upon initial issue unless the terms and conditions of
such series shall have been set forth in a supplemental indenture entered into
between the Company and the Trustee as provided in Section 9.01 hereof.
Section 2.02 Form Of The Series A Debentures; Denominations.
The Series A Debentures and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A attached hereto. The terms and
provisions contained in the Series A Debentures, as set forth in such Exhibit
A, shall constitute, and are hereby expressly made, a part of this Indenture.
The Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
The Trustee shall authenticate and make available for delivery Series A
Debentures for original issue in the aggregate principal amount of
$[*****_____________*****] to evidence the Company's obligation with respect to
the loan from WMECO Capital, upon a resolution of the Board of Directors and a
written order of the Company signed by two Officers of the Company, but without
any further action by the Company. Such order shall specify the amount of the
Series A Debentures to be authenticated and the date on which the original
issue of Debentures is to be authenticated and delivered. The aggregate
principal amount of Series A Debentures outstanding at any time may not exceed
$[***** ___________ *****], except as provided in Section 2.09 hereof.
The Series A Debentures shall be issuable only in registered form without
coupons and only in denominations of $25.00 and any integral multiple thereof.
Section 2.03 Payment Of Principal And Interest.
The principal of and interest on the Debentures of any series, as well as
any premium thereon in the case of redemption thereof prior to maturity, shall
be payable at the office of the Paying Agent in the coin or currency of the
United States of America which at the time is legal tender for public and
private debts. Each Debenture shall be dated its Issue Date. Interest on the
Debentures shall be computed on the basis of a 360-day year composed of twelve
30-day months.
The interest on any Debenture which is payable and is punctually paid or
duly provided for on any interest payment date for Debentures of that series
shall be paid to the person in whose name the Debenture is registered at the
<PAGE>
close of business on the Regular Record Date therefor. In the event that any
Debenture of a particular series or portion thereof is called for redemption,
and the Redemption Date is subsequent to the Regular Record Date with respect
to any interest payment date and prior to such interest payment date, interest
on such Debenture will be paid upon presentation and surrender of such
Debenture to the Paying Agent.
Section 2.04 Execution And Authentication.
The Debentures shall be executed on behalf of the Company by its Chief
Executive Officer, its President, or one of its Vice Presidents, under its
corporate seal imprinted or reproduced thereon attested by its Secretary or one
of its Assistant Secretaries. The signature of any such Officer on the
Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals who
were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication duly executed by the Trustee by manual signature
of an authorized officer, and such certificate upon any Debenture shall be
conclusive evidence, and the only evidence, that such Debenture has been duly
authenticated and made available for delivery hereunder.
The Trustee shall act as the initial authenticating agent. Thereafter, the
Trustee may appoint an authenticating agent. An authenticating agent may
authenticate Debentures whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as a Paying Agent to deal
with the Company or an Affiliate of the Company.
Section 2.05 Registrar And Paying Agent.
The Company shall maintain or cause to be maintained, within or outside
the State of Massachusetts, an office or agency where the Debentures may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Debentures may be presented or surrendered for purchase
or payment (the "Paying Agent"), and an office or agency where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served. The Registrar shall keep a register (the "Register") of the
Debentures and of their transfer and exchange. The Company may have one or
more co-Registrars and one or more additional Paying Agents. The term Paying
Agent includes any additional paying agent. The corporate trust office of the
Trustee at Four Albany Street, New York, New York 10006, Attention: Corporate
Trust Department, shall initially be the Registrar and agent for service of
notice or demands on the Company, and the Company shall initially be the Paying
Agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, or co-Registrar (if not the Trustee or the Company).
The agreement shall implement the provisions of this Indenture that relate to
such agent. The Company shall give prompt written notice to the Trustee of any
change of location of such office or agency. If at any time the Company shall
fail to maintain or cause to be maintained any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices, and demands may be made or served at the
<PAGE>
address of the Trustee set forth in Section 11.02 hereof. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar, Paying Agent, or agent for service of notices or
demands, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07 hereof. The Company or any
Affiliate of the Company may act as Paying Agent, Registrar or co-Registrar, or
agent for service of notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Debentures may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in location of any such other office or agency.
Section 2.06 Paying Agent To Hold Money In Trust.
Except as otherwise provided herein, prior to each due date of the
principal and interest on any Debenture, the Company shall deposit with the
Paying Agent a sum of money sufficient to pay such principal, premium (if any),
and interest so becoming due. The Company shall require each Paying Agent
(other than the Trustee or the Company) to agree in writing that such Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal, premium, if any, and
interest on the Debentures and shall notify the Trustee of any default by the
Company in making any such payment. At any time during the continuance of any
such default, the Paying Agent shall, upon the request of the Trustee,
forthwith pay to the Trustee all money so held in trust and account for any
money disbursed by it. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any money disbursed
by it. Upon doing so, the Paying Agent shall have no further liability for the
money so paid over to the Trustee. If the Company, a Subsidiary, or an
Affiliate of either of them acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund.
Section 2.07 Debentureholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Debentureholders. If the Trustee is not the Registrar, the Company shall cause
to be furnished to the Trustee on or before the Record Date for each interest
payment date and at such other times as the Trustee may request in writing,
within five Business Days of such request, a list in such form as the Trustee
may reasonably require of the names and addresses of Debentureholders, provided
that during any deferral period, such information will be provided every six
months and upon request of the Trustee.
Section 2.08 Transfer And Exchange.
When Debentures are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Debentures of the same series of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Debentures, all at the Registrar's request.
Every Debenture presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
<PAGE>
satisfactory to the Company and the Registrar duly executed by the Holder or
his attorney duly authorized in writing.
The Company shall not charge a service charge for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to pay all taxes, assessments, or other governmental charges that may be
imposed in connection with the transfer or exchange of the Debentures from the
Debentureholder requesting such transfer or exchange (other than any exchange
of a temporary Debenture for a definitive Debenture not involving any change in
ownership).
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (1) any Debenture for a period beginning at
the opening of business 15 days before the mailing of a notice of redemption of
Debentures and ending at the close of business on the day of such mailing, or
(2) any Debenture selected, called, or being called for redemption, except, in
the case of any Debenture to be redeemed in part, the portion thereof not to be
redeemed.
Section 2.09 Replacement Debentures.
If (1) any mutilated Debenture is surrendered to the Company or the
Trustee, or (2) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss, or theft of any Debenture, and there is
delivered to the Company and the Trustee such Debenture or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Debenture has been acquired by a bona
fide purchaser, the Company shall execute in exchange for any such mutilated
Debenture or in lieu of any such destroyed, lost, or stolen Debenture, a new
Debenture of like tenor and principal amount, bearing a number not
contemporaneously outstanding, and the Trustee shall authenticate and make such
new Debenture available for delivery.
In case any such mutilated, destroyed, lost, or stolen Debenture has
become or is about to become due and payable, or is about to be redeemed by the
Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Debenture, pay or purchase such Debenture, as the case
may be.
Upon the issuance of any new Debentures under this Section 2.09, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Debenture issued pursuant to this Section 2.09 in lieu of any
mutilated, destroyed, lost, or stolen Debenture shall constitute an original
additional contractual obligation of the Company whether or not the mutilated,
destroyed, lost, or stolen Debenture shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
ratably with any and all other Debentures duly issued hereunder.
The provisions of this Section 2.09 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost, or stolen Debentures.
Section 2.10 Outstanding Debentures; Determinations Of Holders' Action.
Debentures outstanding at any time are all the Debentures authenticated by
the Trustee except for those canceled by it, those delivered to it for
<PAGE>
cancellation, those mutilated, destroyed, lost, or stolen Debentures referred
to in Section 2.09 hereof, those redeemed by the Company pursuant to Article 3
hereof, and those described in this Section 2.10 as not outstanding. A
Debenture does not cease to be outstanding because the Company or a Subsidiary
or Affiliate thereof holds the Debenture; provided, however, that in
determining whether the Holders of the requisite principal amount of Debentures
have given or concurred in any request, demand, authorization, direction,
notice, consent, or waiver hereunder, Debentures owned by the Company, a
Subsidiary, or an Affiliate shall be disregarded and deemed not to be
outstanding.
Subject to the foregoing, only Debentures outstanding at the time of such
determination shall be considered in any such determination (including
determinations pursuant to Articles 3, 6 and 9 hereof).
If a Debenture is replaced pursuant to Section 2.09 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Debenture is held by a bona fide purchaser.
If the Paying Agent (other than the Company) holds, in accordance with
this Indenture, at maturity or on a Redemption Date, money sufficient to pay
the Debentures payable on that date, then immediately on the date of maturity
or such Redemption Date, as the case may be, such Debentures shall cease to be
outstanding, and interest, if any, on such Debentures shall cease to accrue.
Section 2.11 Temporary Debentures.
So long as WMECO Capital shall hold all of the Debentures, the Company may
execute temporary Debentures, and upon the Company's written request, signed by
two Officers of the Company, the Trustee shall authenticate and make such
temporary Debentures available for delivery. Temporary Debentures shall be
printed, lithographed, typewritten, mimeographed, or otherwise produced in any
authorized denomination, substantially of the tenor of the definitive
Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions, and other variations as the Officers of
the Company executing such Debentures may determine, as conclusively evidenced
by their execution of such Debentures.
After the preparation of definitive Debentures, the temporary Debentures
shall be exchangeable for definitive Debentures of the same series upon
surrender of the temporary Debentures at the office or agency of the Company
designated for such purpose pursuant to Section 2.05 hereof, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Debentures, the Company shall execute a like principal amount of definitive
Debentures of authorized denominations, and the Trustee, upon written request
of the Company signed by two Officers of the Company, shall authenticate and
make such Debentures available for delivery in exchange therefor. Until so
exchanged, the temporary Debentures shall in all respects be entitled to the
same benefits under this Indenture as definitive Debentures.
Section 2.12 Cancellation.
All Debentures surrendered for payment, redemption by the Company pursuant
to Article 3 hereof, or registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Debentures previously authenticated
and made available for delivery hereunder which the Company may have acquired
in any manner whatsoever, and all Debentures so delivered shall be promptly
canceled by the Trustee. The Company may not reissue or issue new Debentures
<PAGE>
to replace Debentures it has paid or delivered to the Trustee for cancellation.
No Debentures shall be authenticated in lieu of or in exchange for any
Debentures canceled as provided in this Section 2.12, except as expressly
permitted by this Indenture. All canceled Debentures held by the Trustee shall
be destroyed by the Trustee, and the Trustee shall deliver a certificate of
destruction to the Company.
Section 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on the Debentures, it
shall pay the defaulted interest to the Persons who are Holders on a subsequent
special Record Date, and such special Record Date, as used in this Section 2.13
with respect to the payment of any defaulted interest, shall mean the 15th day
next preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15 days before
the subsequent special Record Date, the Company shall mail to each Holder and
to the Trustee a notice that states the subsequent special Record Date, the
payment date, and the amount of defaulted interest to be paid.
The Company may also pay defaulted interest in any other lawful manner.
ARTICLE 3
REDEMPTION
Section 3.01 Redemption; Notice To Trustee.
(a) The Series A Debentures are subject to redemption prior to maturity
as provided in the form thereof.
(b) The redemption terms for any additional series of Debentures shall be
as specified in the supplemental indenture creating such series of Debentures.
(c) If any or all of the Debentures are to be redeemed pursuant to
paragraphs (a) or (b) above, the Company shall give notice by first class mail,
postage prepaid, to the Trustee within 45 days prior to the date of such
redemption. Any such notice of redemption shall state the date and price of
redemption.
Section 3.02 Selection Of Debentures To Be Redeemed.
If less than all the outstanding Debentures are to be redeemed at any
time, the Trustee shall select the Debentures to be redeemed on a pro rata
basis, by lot or any other method the Trustee considers fair and appropriate.
The Trustee shall make the selection at least 30 but not more than 60 days
before the Redemption Date from outstanding Debentures not previously called
for redemption. Provisions of this Indenture that apply to Debentures called
for redemption also apply to portions of Debentures called for redemption. The
Trustee shall notify the Company promptly of the Debentures or portions of
Debentures to be redeemed. Notwithstanding the foregoing, if a partial
redemption would result in the delisting a series of the Preferred Securities
by any national securities exchange or other organization on which such series
is then listed, the Partnership may only redeem such series of the Preferred
Securities in whole.
Section 3.03 Notice Of Redemption.
So long as WMECO Capital remains the sole Debentureholder, no notice of
any redemption of Debentures will be required. In the event and at such time
<PAGE>
that WMECO Capital ceases to be the sole Debentureholder, at least 30 days but
not more than 60 days prior to a Redemption Date, the Trustee shall mail or
cause to be mailed a notice of redemption by first-class mail, postage prepaid,
to each Holder of Debentures to be redeemed at the Holder's last address, as it
appears on the Register. At the Company's written request, the Trustee shall
give the notice of redemption in the Company's name and at its expense.
The notice shall identify the Debentures to be redeemed, the provision of
the Debentures or this Indenture pursuant to which the Debentures called for
redemption are being redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Debentures called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) if fewer than all the outstanding Debentures are to be redeemed, the
identification and principal amounts of the particular Debentures to be
redeemed and that, on and after the Redemption Date, upon surrender of such
Debentures, a new Debenture or Debentures in principal amount equal to the
unredeemed portion thereof will be issued; and
(6) that, unless the Company does not make such redemption payment,
interest will cease to accrue on Debentures called for redemption on and after
the Redemption Date.
The notice may state that it is subject to the deposit or segregation of
the redemption monies on or before the date fixed for redemption in accordance
with Section 3.05, and which notice shall be of no effect unless such monies
are so deposited or segregated on or before such date.
Section 3.04 Effect Of Notice Of Redemption.
If (1) the notice of redemption is not conditioned upon the deposit or
segregation of the redemption monies on or before the date fixed for
redemption, or (2) the notice of redemption is conditioned upon such deposit or
segregation of redemption monies and such monies are so deposited or
segregated, then the Debentures called for redemption shall become due and
payable on the Redemption Date and at the Redemption Price and such Debentures
shall, upon the later of the Redemption Date and the date such Debentures are
surrendered to the Paying Agent, be paid at the Redemption Price, plus accrued
interest to the Redemption Date.
Section 3.05 Deposit Of Redemption Price.
On or prior to a Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate is the Paying Agent, shall
segregate and hold in trust or cause such Affiliate to segregate and hold in
trust) money sufficient to pay the Redemption Price of, and accrued interest
on, all Debentures to be redeemed on that date. The Paying Agent shall return
to the Company any money not required for the purpose stated in this Section
3.05.
Section 3.06 Debentures Redeemed In Part.
<PAGE>
Upon surrender of a Debenture that is redeemed in part, the Trustee shall
authenticate for the Holder a new Debenture equal in principal amount to the
unredeemed portion of such Debenture.
ARTICLE 4
COVENANTS
Section 4.01 Payment Of Debentures.
(a) The Company shall pay the principal of and premium, if any, and
interest (including Additional Interest, if any, and interest accruing on or
after the filing of a petition in bankruptcy or reorganization relating to the
Company, whether or not a claim for post-filing interest is allowed in such
proceeding) on the Debentures on (or prior to) the dates and in the manner
provided in the Debentures and/or pursuant to this Indenture. An installment
of principal or interest shall be considered paid on the applicable date due if
on such date the Trustee or the Paying Agent holds, in accordance with this
Indenture, money sufficient to pay all of such installment then due. The
Company shall pay interest on overdue principal and interest on overdue
installments of interest (including Additional Interest, if any, and interest
accruing during an Extension Period and/or on or after the filing of a petition
in bankruptcy or reorganization relating to the Company, whether or not a claim
for post-filing interest is allowed in such proceeding), to the extent
permitted by applicable law, at the rate per annum borne by the Debentures,
which interest on overdue interest shall accrue from the date such amounts
became overdue.
(b) Notwithstanding paragraph (a) of this Section 4.01 or any other
provision herein or in the Debentures to the contrary, the Company shall have
the right in its sole and absolute discretion at any time and from time to time
while the Debentures are outstanding, so long as no Event of Default has
occurred and is continuing, to extend the interest payment period for one or
more series of the Debentures for up to 60 consecutive months, provided that
such Extension Period shall not extend beyond the Stated Maturity, or
acceleration thereof, or any date of redemption, of the Debentures, and
provided further that at the end of each Extension Period the Company shall pay
all interest, including Additional Interest, if any, then accrued and unpaid
(together with interest thereon compounded monthly at the rate specified for
the applicable series of Debentures, to the extent permitted by applicable
law). Prior to the termination of an Extension Period, the Company may shorten
or may further extend the interest payment period, provided that such Extension
Period together with all such further extensions may not exceed 60 consecutive
months. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may select a new Extension Period subject to the
above requirements. The Company shall give the Trustee notice of its selection
of such extended or shortened interest payment period on or prior to the
earliest of (1) one Business Day prior to the date on which the related
distribution by WMECO Capital on the Preferred Securities would otherwise be
payable, (2) one Business Day prior to the date WMECO Capital is required to
give notice of the record or payment date of such related distribution to any
national securities exchange on which the Preferred Securities are then listed
or other applicable self-regulatory organization, and (3) two Business Days
prior to such record date. The Company shall give or cause the Trustee to give
such notice of the Company's selection of such extended interest payment period
to the Holders and, if WMECO Capital is the sole holder of such series of the
Subordinated Debentures, to the holders of the corresponding series of the
Preferred Securities.
<PAGE>
Section 4.02 Prohibition Against Dividends, Etc. During An Event Of
Default Or An Extension Period.
Neither the Company nor any Subsidiary shall declare or pay any dividend
on, or redeem, purchase, acquire, or make a liquidation payment with respect
to, any of its Capital Stock (other than dividends paid by a Wholly Owned
Subsidiary) during an Extension Period or if at such time there shall have
occurred and be continuing any Default or Event of Default or if the Company
shall be in default with respect to its payment obligations under the Guaranty
Agreement.
Section 4.03 SEC Reports.
The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of its annual report and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the Company
is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. If the Company is not subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the
Trustee such information, documents, and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which are specified in Sections 13 of the Exchange Act. The Company
shall also comply with the provisions of Section 314(a) of the TIA.
Section 4.04 Compliance Certificates.
(a) The Company shall deliver to the Trustee within 90 days after the end
of each of the Company's fiscal years an Officer's Certificate, stating whether
or not the signer knows of any Default or Event of Default. Such certificate
shall contain a certification from the principal executive officer, principal
financial officer, or principal accounting officer of the Company as to his or
her knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this Section 4.04(a), such compliance
shall be determined without regard to any period of grace or requirement of
notice provided under this Indenture. If such Officer does know of such a
Default or Event of Default, the certificate shall describe any such Default or
Event of Default and its status. Such Officer's Certificate need not comply
with Sections 11.04 and 11.05 hereof.
(b) The Company shall deliver to the Trustee any information reasonably
requested by the Trustee in connection with the compliance by the Trustee or
the Company with the TIA.
Section 4.05 Relationship With WMECO Capital.
The Company agrees (i) to maintain, directly or indirectly through a
Wholly Owned Subsidiary, 100% ownership of the general partnership interests in
WMECO Capital; (ii) to cause the General Partner to maintain a capital account
balance in WMECO Capital equal to at least 3% of the total positive capital
account balances for WMECO Capital and, if necessary, to make additional
contributions to satisfy this requirement; (iii) to timely perform or cause to
be timely performed all of the duties of the General Partner of WMECO Capital
(including the duty to pay distributions on the Preferred Securities); and (iv)
to use its reasonable efforts to cause WMECO Capital to remain a limited
partnership and otherwise continue to be treated as a partnership for United
States federal income tax purposes.
Section 4.06 Further Instruments And Acts.
<PAGE>
Upon request of the Trustee, the Company shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
Section 4.07 Payments For Consents.
Neither the Company nor any Subsidiary shall, directly or indirectly, pay
or cause to be paid any consideration, whether by way of interest, fee, or
otherwise, to any Debentureholder for or as an inducement to any consent,
waiver, or amendment of any of the terms or provisions of this Indenture or the
Debentures unless such consideration is offered to be paid or agreed to be paid
to all Debentureholders who so consent, waive, or agree to amend in the time
frame set forth in the documents soliciting such consent, waiver, or agreement.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01 When The Company May Merge, Etc.
The Company may not consolidate with or merge with or into, or sell,
convey, transfer, or lease all or substantially all of its assets (either in
one transaction or a series of transactions) to, any Person unless:
(1) the Person formed by or surviving such consolidation or merger
or to which such sale, conveyance, transfer, or lease shall have been made
(the "Successor"), if other than the Company, (a) is organized and
existing under the laws of the United States of America or any State
thereof or the District of Columbia, and (b) shall expressly assume by a
supplemental indenture, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all the obligations of the Company
under the Debentures and this Indenture;
(2) immediately prior to and after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor as a result of such transaction as having been incurred by the
Successor at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing; and
(3) the Company delivers to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, sale,
conveyance, transfer, or lease and such supplemental indenture comply with
this Indenture.
The Successor will be the successor to the Company, and will be
substituted for, and may exercise every right and power and become the obligor
on the Debentures with the same effect as if the Successor had been named as
the Company herein, but, in the case of a sale, conveyance, transfer, or lease
of all or substantially all of the assets of the Company, the predecessor
Company will not be released from its obligation to pay the principal of,
premium, if any, and interest on the Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events Of Default.
<PAGE>
An "Event of Default" occurs if one of the following shall have occurred
and be continuing:
(1) The Company defaults in the payment, when due and payable, of
(a) interest, including Additional Interest, on any Debenture and the
default continues for a period of 10 days (whether or not payment is
prohibited by the provisions of Article 10 hereof or otherwise); provided,
that during an Extension Period, interest shall not be due and payable and
failure to pay interest on the Debentures shall not constitute a Default
or Event of Default hereunder, or (b) the principal of, or premium, if
any, on any Debentures when the same becomes due and payable at maturity,
acceleration, on any Redemption Date, or otherwise (whether or not payment
is prohibited by the provisions of Article 10 hereof or otherwise);
(2) The Company defaults in the performance of, or fails to comply
with, any of its other covenants or agreements in the Debentures or this
Indenture and such default or failure continues for 60 days after receipt
by the Company of a "Notice of Default";
(3) The Company, pursuant to or within the meaning of any Bankruptcy
Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against it in
an involuntary case or proceeding;
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property, and such Custodian is
not discharged within 60 days;
(d) makes a general assignment for the benefit of its
creditors; or
(e) admits in writing its inability to pay its debts generally
as they become due; or
(4) A court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company in an involuntary case or
proceeding;
(b) appoints a Custodian of the Company for all or
substantially all of its properties; or
(c) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in effect for 60
days.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree, or order of
any court or any order, rule, or regulation of any administrative or
governmental body.
A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company or the Holders of at least a majority in aggregate
principal amount of the Debentures at the time outstanding or the Special
<PAGE>
Representative notifies the Company and the Trustee of the Default and the
Company does not cure such Default within the time specified in clause (2)
above after receipt of such notice. Any such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default."
Section 6.02 Acceleration.
If any Event of Default, other than an Event of Default specified in
clause (3) or (4) occurs and is continuing, the Trustee, the Holders of not
less than 25% in principal amount of the Debentures then outstanding, or the
Special Representative, may declare the principal of all such Debentures due
and payable. Upon such a declaration, such principal and interest shall be due
and payable immediately.
If an Event of Default specified in clause (3) or (4) occurs, the
principal of and interest on all the Debentures shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Debentureholders.
The Special Representative or Holders of a majority in aggregate principal
amount of the Debentures at the time outstanding by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may, in its
own name or as trustee of an express trust, institute, pursue and prosecute any
proceeding, including any action at law or suit in equity or other judicial or
administrative proceeding, to collect the payment of principal of, premium, if
any, or interest on, the Debentures, to enforce the performance of any
provision of the Debentures or this Indenture or to obtain any other available
remedy.
The Trustee may maintain a proceeding even if it does not possess any of
the Debentures or does not produce any of the Debentures in the proceeding. A
delay or omission by the Trustee, the Special Representative, or any
Debentureholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 6.04 Waiver Of Past Defaults.
The Special Representative or the Holders of 66 2/3% in aggregate
principal amount of the Debentures at the time outstanding, by notice to the
Trustee, the Company, and WMECO Capital, may waive any Default or Event of
Default that has occurred and its consequences. When a Default or Event of
Default is waived, it is deemed cured and shall cease to exist, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any consequent right.
Section 6.05 Control By Majority Or The Special Representatives.
The Holders of a majority in aggregate principal amount of the Debentures
then outstanding or the Special Representative may direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee or
<PAGE>
of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Debentureholders or would involve the Trustee in personal
liability. The Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, including withholding notice to
the Holders of the Debentures of any series of any continuing Default (except
in the payment of the principal (other than any mandatory sinking fund payment)
of, premium, if any, or interest on, any Debentures of such series) if the
Trustee considers it in the interest of the Holders of such series of
Debentures to do so.
Section 6.06 Limitation On Suits.
Except as provided in Section 6.07 hereof, the Holders and the Special
Representative may not pursue any remedy with respect to this Indenture or the
Debentures unless:
(1) the Holders or the Special Representative gives to the Trustee
written notice stating that an Event of Default is continuing;
(2) the Holders or the Special Representative provides to the
Trustee reasonable security and indemnity against any loss, liability, or
expense satisfactory to the Trustee;
(3) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security and
indemnity; and
(4) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Debentures;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
Section 6.07 Rights Of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of the principal amount of or interest on the
Debentures held by such Holder, on or after the respective due dates expressed
in the Debentures (in the case of interest, as the same may be extended
pursuant to Section 4.01(b)) or any Redemption Date, or to bring suit for the
enforcement of any such payment on or after such respective dates shall not be
impaired or affected adversely without the consent of each such Holder.
Section 6.08 Collection Suit By The Trustee.
If an Event of Default described in Section 6.01(1) hereof occurs and is
continuing, the Trustee may, in its own name and as trustee of an express
trust, recover judgment against the Company or any other obligor upon the
Debentures for the whole amount owing with respect to the Debentures and the
amounts provided for in Section 6.07 hereof.
Section 6.09 The Trustee May File Proofs Of Claim.
<PAGE>
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition, or other
judicial proceeding relative to the Company or its properties or assets, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(1) to file and prove a claim for the whole amount of the
principal, premium, if any, and interest on the Debentures and to file
such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements, and advances of the Trustee, its
agents, and counsel) and of the Holders allowed in such judicial
proceeding; and
(2) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any
Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements, and advances of the Trustee, its
agents, and counsel, and any other amounts due the Trustee under Section
7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the
Debentures or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07
hereof;
SECOND: to Debentureholders for amounts due and unpaid on the
Debentures for the principal amount, Redemption Price, or interest,
if any, as the case may be, ratably, without preference or priority
of any kind, according to such amounts due and payable on the
Debentures; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a Record Date and payment date for any payment to
Debentureholders pursuant to this Section 6.10.
Section 6.11 Undertaking For Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant (other than the Trustee) in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a suit
<PAGE>
by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof or a suit by
Holders of more than 10% in aggregate principal amount of the Debentures at the
time outstanding, or a suit by the Special Representative.
Section 6.12 Waiver Of Stay, Extension, Or Usury Laws.
The Company covenants (to the extent permitted by applicable law) that it
will not at any time insist upon, or plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, that would
prohibit or forgive the Company from paying all or any portion of the principal
or premium, if any, or interest on, the Debentures as contemplated herein or
affect the covenants or the performance by the Company of its obligations under
this Indenture; and the Company (to the extent permitted by applicable law)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay, or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE 7
THE TRUSTEE
Section 7.01 Duties Of The Trustee.
(1) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(2) Except during the continuance of an Event of Default, (a) the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others; and (b) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(a) this paragraph (3) does not limit the effect of paragraph (2) of
this Section 7.01;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(4) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2), (3) and (5) of this Section 7.01 and
to Section 7.02 hereof.
<PAGE>
(5) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial
liability unless it receives security and indemnity reasonably satisfactory to
it against any loss, liability, or expense.
(6) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not
be liable for interest on any money held by it hereunder.
Section 7.02 Rights Of The Trustee.
(1) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate and, if appropriate, an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officer's Certificate and Opinion of Counsel.
(3) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers.
(5) The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered, or
omitted by it hereunder in good faith and in reliance thereon.
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders or the Special Representative pursuant to this Indenture,
unless such Holders or the Special Representative shall have offered to the
Trustee reasonable security and indemnity against the costs, expenses, and
liabilities which might be incurred by it in compliance with such request or
direction.
Section 7.03 Individual Rights Of The Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Debentures and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar, or co-Registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11 hereof.
Section 7.04 The Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Debentures, it shall not be accountable for the Company's use
of the proceeds from the Debentures, and it shall not be responsible for any
statement in this Indenture or the Debentures or any report or certificate
issued by the Company hereunder or any registration statement relating to the
Debentures (other than the Trustee's certificate of authentication), or the
determination as to which beneficial owners are entitled to receive any notices
hereunder.
<PAGE>
Section 7.05 Notice Of Defaults.
The Trustee shall mail to the Debentureholders, as their names and
addresses appear on the Register, notice of all Defaults known to the Trustee,
within 90 days after the occurrence thereof; provided, however, that in the
case of a Default described in Section 6.01(1) hereof, the Trustee may withhold
such notice if and so long as a committee of Trust Officers in good faith
determines that the withholding of such notice is in the interests of
Debentureholders. The second sentence of this Section 7.05 shall be in lieu of
the proviso to TIA Section 315(b). Said proviso is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 7.06 Reports By Trustee To Holders.
Within 60 days after each [****_______*****], beginning with the
[*****______*****] next following the date of the execution and delivery of
this Indenture, the Trustee shall transmit by mail, postage prepaid, to (i)
each Debentureholder, (ii) such other holders that have submitted their names
to the Trustee for such purpose, and (iii) any other persons identified in the
list of holders that the Company has provided to the Trustee pursuant to
Section 2.07 hereof, a brief report dated as of such [****______****] in
accordance with and to the extent required under TIA Section 313.
A copy of each report at the time of its mailing to Debentureholders shall
be filed with the Company, the SEC, and each securities exchange on which the
Debentures are listed. The Company agrees to promptly notify the Trustee
whenever the Debentures become listed on any securities exchange and of any
listing thereof.
Section 7.07 Compensation And Indemnity.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements, and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and advances of its agents and counsel),
including all reasonable expenses and advances incurred or made by the
Trustee in connection with any Event of Default or any membership on any
creditors' committee, except any such expense or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors, and
shareholders for, and to hold it harmless against, any and all loss,
liability, or expense, incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
Before, after, or during an Event of Default, the Trustee shall have a
claim and lien prior to the Debentures as to all property and funds held by it
hereunder for any amount owing it or any predecessor Trustee pursuant to this
<PAGE>
Section 7.07, except with respect to funds held in trust for the payment of
principal of, premium, if any, or interest on, particular Debentures.
The Company's payment obligations pursuant to this Section 7.07 are not
subject to Article 10 of this Indenture and shall survive the discharge of this
Indenture. When the Trustee renders services or incurs expenses after the
occurrence of an Event of Default specified in Section 6.01 hereof, the
compensation for services and expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08 Replacement Of Trustee.
The Trustee may resign by so notifying the Company in writing at least 30
days prior to the date of the proposed resignation; provided, however, no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.08. The Special Representative or the
Holders of a majority in aggregate principal amount of the Debentures at the
time outstanding may remove the Trustee by so notifying the Trustee in writing
and may appoint a successor Trustee, which shall be subject to the consent of
the Company unless an Event of Default has occurred and is continuing. The
Trustee shall resign if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers, and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Debentureholders. Subject to payment of all amounts owing to the
Trustee under Section 7.07 hereof and subject further to its lien under Section
7.07 hereof, the retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee. If a successor Trustee does not take
office within 30 days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company, the Special Representative, or the Holders of a
majority in aggregate principal amount of the Debentures at the time
outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Debentureholder may petition any court of competent jurisdiction for its
removal and the appointment of a successor Trustee.
Section 7.09 Successor Trustee By Merger.
If the Trustee consolidates with, merges, or converts into, or transfers
all or substantially all its corporate trust business or assets (including this
Trusteeship) to another corporation, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
<PAGE>
Section 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Sections
310(a)(1) and 310(a)(2). The Trustee (or any Affiliate thereof which has
unconditionally guaranteed the obligations of the Trustee hereunder) shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b). In determining whether the Trustee has conflicting interests
as defined in TIA Section 310(b)(l), the provisions contained in the proviso to
TIA Section 310(b)(1) shall be deemed incorporated herein.
Section 7.11 Preferential Collection Of Claims Against The Company.
If and when the Trustee shall be or become a creditor of the Company, the
Trustee shall be subject to the provisions of the TIA regarding the collection
of claims against the Company.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES
Section 8.01 Satisfaction And Discharge Of Indenture.
The Company shall be deemed to have paid and discharged the entire
indebtedness on any series of the Debentures outstanding on the date the
Company has irrevocably deposited or caused to be irrevocably deposited with
the Trustee or any Paying Agent as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders (1) cash
in an amount, or (2) U.S. Government Obligations, maturing as to principal and
interest at such times and in such amounts as will ensure the availability of
cash, or (3) a combination thereof, sufficient to pay the principal of,
premium, if any, and interest on all Debentures then outstanding, and on such
date the provisions of this Indenture with respect to the Debentures shall no
longer be in effect (except as to (1) the rights of registration of transfer,
substitution, and exchange of Debentures, (2) the replacement of apparently
mutilated, defaced, destroyed, lost, or stolen Debentures, (3) the rights of
the Holders to receive payments of principal thereof and interest thereon, (4)
the rights of the Holders as beneficiaries hereof with respect to the property
so deposited with the Trustee payable to all or any of them, (5) the obligation
of the Company to maintain an office or agency for payments on and registration
of transfer of the Debentures, and (6) the rights, obligations, and immunities
of the Trustee hereunder); and the Trustee shall, at the request and expense of
the Company, execute proper instruments acknowledging the same; provided that:
(A) no Default or Event of Default with respect to the Debentures
shall have occurred and be continuing on the date of such deposit or
occurs as a result of such deposit;
(B) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the defeasance contemplated by this provision have
been complied with; and
(C) the Company shall have delivered to the Trustee (i) either a
private Internal Revenue Service ruling or an Opinion of Counsel, in
either case to the effect that the Holders will not recognize income,
gain, or loss for United States federal income tax purposes as a result of
such deposit, defeasance, and discharge and will be subject to United
<PAGE>
States federal income tax on the same amount and in the manner and at the
same times as would have been the case if such deposit, defeasance, and
discharge had not occurred; and (ii) an Opinion of Counsel to the effect
that (a) the deposit shall not result in the Company, the Trustee, or the
trust being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (b) such deposit creates a valid
trust in which such Holders of the Debentures have the sole beneficial
ownership interest or that such Holders of the Debentures have a
nonavoidable first priority security interest in such trust.
Section 8.02 Application By Trustee Of Funds Deposited For Payment Of
Debentures.
Subject to Section 8.04 and Article 10 hereof, all monies deposited with
the Trustee pursuant to Section 8.01 hereof shall be held in trust and applied
by it to the payment, either directly or through any Paying Agent (including
the Company acting as its own Paying Agent), to the Holders for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
Section 8.03 Repayment Of Monies Held By Paying Agent.
In connection with the satisfaction and discharge of this Indenture, all
monies then held by any Paying Agent under this Indenture shall, upon demand of
the Company, be repaid to it or paid to the Trustee, and thereupon such Paying
Agent shall be released from all further liability with respect to such monies.
Section 8.04 Return Of Monies Held By The Trustee And Paying Agent
Unclaimed For Three Years.
Any monies deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal, premium, if any, or interest on, any Debenture
and not applied but remaining unclaimed for three years after the date when
such principal, premium, if any, or interest shall have become due and payable
shall unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law, be repaid to the Company by the Trustee
or such Paying Agent, and the Holder of such Debenture shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Company for any payment
which such Holder may be entitled to collect, and all liability of the Trustee
or any Paying Agent with respect to such monies shall thereupon cease.
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent Of Holders.
From time to time, when authorized by a resolution of the Board of
Directors, the Company and the Trustee, without notice to or the consent of any
Debentureholders or the Special Representative issued hereunder, may amend or
supplement this Indenture or the Debentures.
(1) to cure any ambiguity, defect, or inconsistency;
(2) to comply with Article 5 hereof;
<PAGE>
(3) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
(4) to make any other change that does not adversely affect the
rights of any Debentureholder;
(5) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA; and
(6) to set forth the terms and conditions, which shall not be
inconsistent with this Indenture, of the series of Debentures
(other than the Series A Debentures) that are to be issued
hereunder and the form of Debentures of such series.
Section 9.02 With Consent Of Holders.
With written consent of the Special Representative or the Holders of at
least 66 2/3% in aggregate principal amount of Debentures at the time
outstanding and affected by such amendment or waiver, the Company and the
Trustee may amend this Indenture or the Debentures or may waive future
compliance by the Company with any provisions of this Indenture or the
Debentures. However, without the consent of each Debentureholder affected,
such an amendment or waiver may not:
(1) reduce the principal amount of the Debentures the Holders of
which must consent to an amendment of the Indenture or a waiver;
(2) change the Stated Maturity of the principal of, or the interest
or rate of interest on, the Debentures, change adversely to the Holders
the redemption provisions of Article 3 hereof, or impair the right to
institute suit for the enforcement of any such payment or make any
Debenture payable in money or securities other than that stated in the
Debenture;
(3) make any change in Article 10 hereof that adversely affects the
rights of the Holders of the Debentures or any change to any other section
hereof that adversely affects their rights under Article 10 hereof;
(4) waive a Default in the payment of the principal of, premium, if
any, or interest on, any Debenture; or
(5) change Section 6.07 hereof.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
If certain Holders agree to defer or waive certain obligations of the
Company hereunder with respect to Debentures held by them, such deferral or
waiver shall not affect the rights of any other Holder to receive the payment
or performance required hereunder in a timely manner.
After an amendment or waiver under this Section 9.02 becomes effective,
the Company shall mail to the Special Representative and to each Holder a
notice briefly describing the amendment or waiver. Any failure of the Company
to mail such notices, or any defect therein, shall not, however, in any way
impair or affect the validity of such amendment or waiver.
Section 9.03 Compliance With Trust Indenture Act.
<PAGE>
Every supplemental indenture executed pursuant to this Article 9 shall
comply with the TIA.
Section 9.04 Revocation And Effect Of Consents, Waivers And Actions.
Until an amendment, waiver, or other action by Holders becomes effective,
a consent to it or any other action by a Holder of a Debenture hereunder is a
continuing consent by the Holder and every subsequent Holder of that Debenture
or portion of the Debenture that evidences the same obligation as the
consenting Holder's Debenture, even if notation of the consent, waiver, or
action is not made on the Debenture. However, any such Holder or subsequent
Holder may revoke the consent, waiver, or action as to such Holder's Debenture
or portion of the Debenture if the Trustee receives the notice of revocation
before the consent of the requisite aggregate principal amount of the
Debentures then outstanding has been obtained and not revoked. After an
amendment, waiver, or action becomes effective, it shall bind every
Debentureholder, except as provided in Section 9.02 hereof.
The Company may, but shall not be obligated to, fix a Record Date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If a Record Date is fixed, then, notwithstanding the first two
sentences of the immediately preceding paragraph, those Persons who were
Holders at such Record Date or their duly designated proxies, and only those
Persons, shall be entitled to consent to such amendment, supplement, or waiver,
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such Record Date. No such consent shall be valid or
effective for more than 90 days after such Record Date.
Section 9.05 Notation On Or Exchange Of Debentures.
Debentures authenticated and made available for delivery after the
execution of any supplemental indenture pursuant to this Article 9 may, and
shall, if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
made available for delivery by the Trustee in exchange for outstanding
Debentures.
Section 9.06 Trustee To Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article 9 if the supplemental indenture does not adversely affect the
rights, duties, liabilities, or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing such amendment the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Officer's Certificate and Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture.
Section 9.07 Effect Of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes and every Holder
of Debentures theretofore or thereafter authenticated and made available for
delivery hereunder shall be bound thereby.
ARTICLE 10
<PAGE>
SUBORDINATION
Section 10.01 Debentures Subordinated To Senior Indebtedness.
Notwithstanding the provisions of Section 6.01 hereof or any other
provision herein or in the Debentures, the Company and the Trustee or Holder by
his acceptance thereof (a) covenant and agree that all payments by the Company
of the principal of, premium, if any, and interest on the Debentures shall be
subordinated in accordance with the provisions of this Article 10 to the prior
payment in full, in cash or cash equivalents, of all amounts payable on, under,
or in connection with present or future Senior Indebtedness, and (b)
acknowledge that holders of Senior Indebtedness may rely on this Article 10.
Section 10.02 Priority And Payment Of Proceeds In Certain Events;
Remedies Standstill.
(1) Upon any payment or distribution of assets or securities of the
Company, as the case may be, of any kind or character, whether in cash,
property, or securities, upon any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether voluntary or involuntary,
or in bankruptcy, insolvency, receivership, or other proceedings, all amounts
payable on, under, or in connection with Senior Indebtedness (including any
interest accruing on such Senior Indebtedness subsequent to the commencement of
a bankruptcy, insolvency, or similar proceeding) shall first be paid in full in
cash, or payment provided for in cash or cash equivalents, before the Holders
or the Trustee on behalf of the Holders shall be entitled to receive from the
Company any payment of principal of or interest on or any other amounts in
respect of the Debentures or distribution of any assets or securities.
(2) No direct or indirect payment by or on behalf of the Company of
principal of or interest on the Debentures, whether pursuant to the terms of
the Debentures or upon acceleration or otherwise, shall be made if, at the time
of such payment, there exists (a) a default in the payment of all or any
portion of any Senior Indebtedness, and the Trustee has received written notice
thereof from the Company, one or more holders of Senior Indebtedness, or from
any trustee, representative, or agent therefor, or (b) any other default
affecting Senior Indebtedness permitting its acceleration, as the result of
which the maturity of Senior Indebtedness has been accelerated, and the Trustee
has received written notice from any trustee, representative, or agent for the
holders of the Senior Indebtedness or the holders of at least a majority in
principal amount of the Senior Indebtedness then outstanding of such default
and acceleration, and such default shall not have been cured or waived by or on
behalf of the holders of such Senior Indebtedness.
(3) If, notwithstanding the foregoing provision prohibiting such payment
or distribution, the Trustee or any Holder shall have received any payment on
account of the principal of or interest on the Debentures (other than as
permitted by subsections (1) and (2) of this Section 10.02) when such payment
is prohibited by this Section 10.02 and before all amounts payable on, under,
or in connection with Senior Indebtedness are paid in full in cash or cash
equivalents, then and in such event (subject to the provisions of Section 10.08
hereof) such payment or distribution shall be received and held in trust for
the holders of Senior Indebtedness and shall be paid over or delivered first to
the holders of the Senior Indebtedness remaining unpaid to the extent necessary
to pay such Senior Indebtedness in full in cash or cash equivalents.
(4) Upon any payment or distribution of assets or securities referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely upon
<PAGE>
any order or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation, or reorganization proceedings are
pending, and upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent, or other Person making any such payment or
distribution, delivered to the Trustee for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon, and all
other facts pertinent thereto or to this Article 10.
Section 10.03 Payments Which May Be Made Prior To Notice.
Nothing in this Article 10 or elsewhere in this Indenture shall prevent
(1) the Company, except under the conditions described in Section 10.02 hereof,
from making payments of principal of and interest on the Debentures or from
depositing with the Trustee any monies for such payments, or (2) the
application by the Trustee of any monies deposited with it for the purpose of
making such payments of principal of and interest on the Debentures, to the
Holders entitled thereto, unless at least one day prior to the date when such
payment would otherwise (except for the prohibitions contained in Section 10.02
hereof) become due and payable, the Trustee shall have received the written
notice provided for in Section 10.02(2) hereof.
Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be
Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
prejudiced or impaired by any act or failure to act in good faith by any such
holder, or by any noncompliance by the Company with the terms and provisions
and covenants herein regardless of any knowledge thereof any such holder may
have or otherwise be charged with.
The provisions of this Article 10 are intended to be for the benefit of,
and shall be enforceable directly by, the holders of Senior Indebtedness.
Notwithstanding anything to the contrary in this Article 10, to the extent
any Holders or the Trustee have paid over or delivered to any holder of Senior
Indebtedness any payment or distribution received on account of the principal
of or interest on the Debentures to which any other holder of Senior
Indebtedness shall be entitled to share in accordance with Section 10.02
hereof, no holder of Senior Indebtedness shall have a claim or right against
any Debentureholders or the Trustee with respect to any such payment or
distribution or as a result of the failure to make payments or distributions to
such other holder of Senior Indebtedness.
Section 10.05 Trustee May Take Action To Effectuate Subordination.
Each Debentureholder by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate, as between the holders of Senior Indebtedness and such
Debentureholders, the subordination as provided in this Article 10 and appoints
the Trustee as such Debentureholder's attorney-in-fact for any and all such
purposes.
Section 10.06 Subrogation.
Upon the payment in full, in cash or cash equivalents, of all Senior
Indebtedness, any Debentureholder shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
<PAGE>
assets of the Company made on such Senior Indebtedness until all accrued
interest on the principal of the Debentures shall be paid in full; and for the
purposes of such subrogation, no payments or distributions to holders of such
Senior Indebtedness of any cash, property, or securities to which such
Debentureholders would be entitled except for this Article 10, and no payment
pursuant to this Article 10 to holders of such Senior Indebtedness by such
Debentureholders shall, as between the Company, its creditors other than
holders of such Senior Indebtedness, and such Debentureholders, be deemed to be
a payment by the Company to or on account of such Senior Indebtedness, it being
understood that the provisions of this Article 10 are solely for the purpose of
defining the relative rights of the holders of such Senior Indebtedness, on the
one hand, and such Debentureholders, on the other hand.
If any payment or distribution to which such Debentureholders would
otherwise have been entitled but for the provisions of this Article 10 shall
have been applied, pursuant to this Article 10, to the payment of any Senior
Indebtedness, then and in such case, such Debentureholders shall be entitled to
receive from the holders of such Senior Indebtedness at the time outstanding
any payments or distributions received by such holders of Senior Indebtedness
in excess of the amount sufficient to pay, in cash or cash equivalents, all
such Senior Indebtedness in full.
Section 10.07 Obligations Of Company Unconditional; Reinstatement.
Nothing in this Article 10, or elsewhere in this Indenture or in any
Debenture, is intended to or shall impair, as between the Company and
Debentureholders, the obligations of the Company, which are absolute and
unconditional, to pay to such Debentureholders the principal of and interest on
the Debentures as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of such
Debentureholders and creditors of the Company other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee,
the Special Representative, or any Debentureholder from exercising all remedies
otherwise permitted by applicable law upon Default under this Indenture,
subject to the rights, if any, under this Article 10 of the holders of such
Senior Indebtedness in respect of cash, property, or securities of the Company
received upon the exercise of any such remedy.
The failure to make a scheduled payment of principal of, or interest on,
the Debentures by reason of Section 10.02 shall not be construed as preventing
the occurrence of an Event of Default under Section 6.01 hereof; provided,
however, that if (i) the conditions preventing the making of such payment no
longer exist, and (ii) such Debentureholders are made whole with respect to
such omitted payments, the Event of Default relating thereto (including any
failure to pay any accelerated amounts) shall be automatically waived, and the
provisions of the Indenture shall be reinstated as if no such Event of Default
had occurred.
Section 10.08 Trustee Entitled To Assume Payments Not Prohibited In
Absence Of Notice.
The Trustee or Paying Agent shall not be charged with the knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee or Paying Agent, unless and until the Trustee or Paying Agent shall
have received written notice thereof from the Company or one or more holders of
Senior Indebtedness or from any trustee or agent therefor or unless the Trustee
or Paying Agent otherwise had actual knowledge thereof; and, prior to the
receipt of any such written notice or actual knowledge, the Trustee or Paying
Agent may conclusively assume that no such facts exist.
<PAGE>
Unless at least one day prior to the date when by the terms of this
Indenture any monies are to be deposited by the Company with the Trustee or any
Paying Agent for any purpose (including, without limitation, the payment of the
principal of or the interest on any Debenture), the Trustee or Paying Agent
shall, except where no notice is necessary, have received with respect to such
monies the notice provided for in the preceding sentence, the Trustee or Paying
Agent shall have full power and authority to receive and apply such monies to
the purpose for which they were received. Neither of them shall be affected by
any notice to the contrary, which may be received by either on or after such
date. The foregoing shall not apply to the Paying Agent if the Company is
acting as Paying Agent. Nothing in this Section 10.08 shall limit the right of
the holders of Senior Indebtedness to recover payments as contemplated by
Section 10.02 hereof. The Trustee or Paying Agent shall be entitled to rely on
the delivery to it of a written notice by a Person representing himself,
herself or itself to be a holder of such Senior Indebtedness (or a trustee on
behalf of, or other representative of, such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder. The Trustee shall not be deemed
to have any duty to the holders of Senior Indebtedness.
Section 10.09 Right Of Trustee To Hold Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all of the rights
set forth in this Article 10 in respect of any Senior Indebtedness at any time
held by them to the same extent as any other holder of such Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee or any Paying Agent of any of its rights as such holder.
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of subsection (c) of Section 318 of the TIA,
the imposed duties shall control. The provisions of Sections 310 to 317,
inclusive, of the TIA that impose duties on any Person (including provisions
automatically deemed included in an indenture unless the indenture provides
that such provisions are excluded) are a part of and govern this Indenture,
except as, and to the extent, they are expressly excluded from this Indenture,
as permitted by the TIA.
Section 11.02 Notices.
Any notice or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows:
if to the Company:
Western Massachusetts Electric Company
Selden Street
Berlin, Connecticut 06037
Attention:
if to the Trustee:
<PAGE>
Bankers Trust Company
The Company or the Trustee, by giving notice to the other, may designate
additional or different addresses for subsequent notices of communications.
The Company shall notify the holder, if any, of Senior Indebtedness of any such
additional or different addresses of which the Company receives notice from the
Trustee.
Any notice or communication given to a Debentureholder other than WMECO
Capital shall be mailed to the Debentureholder at the Debentureholder's address
as it appears on the Register of the Registrar and shall be sufficiently given
if mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Debentureholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, or
co-Registrar.
Section 11.03 Communication By Holders With Other Holders.
Debentureholders may communicate, pursuant to TIA Section 312(b), with
other Debentureholders with respect to their rights under this Indenture or the
Debentures. The Trustee, the Company, the Registrar, the Paying Agent, and
anyone else shall have the protection afforded to the Trustee in TIA Section
312(c).
Section 11.04 Certificate And Opinion As To Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officer's Certificate (complying with Section 11.05 hereof)
stating that, in the opinion of such Officer, all conditions precedent to the
taking of such action have been complied with; and
(2) if appropriate, an Opinion of Counsel (complying with Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent to the taking of such action have been complied with.
Section 11.05 Statements Required In Certificate Or Opinion.
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(1) a statement that each Person making such Officer's Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officer's
Certificate or Opinion of Counsel are based;
<PAGE>
(3) a statement that, in the opinion of each such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement that, in the opinion of such Person, such covenant or
condition has been complied with; provided, however, that with respect to
matter of fact not involving any legal conclusion, an Opinion of Counsel may
rely on an Officer's Certificate or certificates of public officials.
Section 11.06 Severability Clause.
If any provision in this Indenture or in the Debentures shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 11.07 Rules By Trustee, Paying Agent And Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders. The Registrar and Paying Agent may make reasonable rules for
their functions.
Section 11.08 Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action to be
taken on such date shall be taken on the next succeeding day that is not a
Legal Holiday, and if such action is a payment in respect of the Debentures, no
principal or interest installment shall accrue for the intervening period;
except that if any interest payment is due on a Legal Holiday and the next
succeeding day is in the next succeeding calendar year, such payment shall be
made on the Business Day immediately preceding such Legal Holiday.
Section 11.09 Governing Law.
This Indenture and the Debentures shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts as applied to
contracts made and performed within the Commonwealth of Massachusetts without
regard to its principles of conflicts of laws.
Section 11.10 No Recourse Against Others.
No director, officer, employee, or stockholder, as such, of the Company
shall have any liability for any obligations of the Company under the
Debentures or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. By accepting a Debenture, each
Debentureholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Debentures.
Section 11.11 Successors.
All agreements of the Company in this Indenture and the Debentures shall
bind its successors and assigns. All agreements of the Trustee in this
Indenture shall bind its successors and assigns.
Section 11.12 Multiple Original Copies Of This Indenture.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. Any signed copy shall be sufficient proof of this Indenture.
<PAGE>
Section 11.13 No Adverse Interpretation Of Other Agreements.
This Indenture may not be used to interpret another indenture, loan, or
debt agreement of the Company or any Subsidiary. Any such indenture, loan, or
debt agreement may not be used to interpret this Indenture.
Section 11.14 Table Of Contents; Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 11.15 Benefits Of The Indenture.
Except as expressly provided in Article 10 hereof, nothing in this
Indenture or in the Debentures, express or implied, shall give to any person,
other than the parties hereto and their successors hereunder, the Holders, and
the Special Representative, any benefit or any legal or equitable right,
remedy, or claim under this Indenture.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By:
Name:
Title:
BANKERS TRUST COMPANY,
as Trustee
By:
Name:
Title:
WMECO CAPITAL, L.P.
By: Western Massachusetts Electric Company,
Its General Partner
By:
Solely for the purposes stated
in the recitals hereto.
<PAGE>
EXHIBIT A
[FORM OF DEBENTURE]
__% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES,
SERIES A DUE [***20__***]
[Stated Maturity not to exceed 49 years from date of issuance]
No. _________ $_______________
Western Massachusetts Electric Company, a Massachusetts corporation (the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________________ or registered assigns, the principal sum of
__________________ Dollars on _____________, _____ (subject to extension at the
option of the Company, as set forth below) and to pay interest on said
principal sum from _____________, 199_ or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, monthly in arrears on the last day of each calendar
month of each year commencing ____________, 199_ at the rate of ______% per
annum plus Additional Interest, if any, until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any, and
(to the extent that payment of such interest is permitted by applicable law) on
any overdue installment of interest at the same rate per annum.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year composed of twelve 30-day months. In
the event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the person in whose name this Debenture is registered
at the close of business on the Regular Record Date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered holders on such Regular Record Date, and may be paid to the person
in whose name this Debenture is registered at the close of business on a
special Record Date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered holders of
this series of Debentures not less than 10 days prior to such special Record
Date, as more fully provided in the Indenture hereinafter referred to. The
principal of, premium, if any, and the interest on, this Debenture shall be
payable at the office or agency of the Company maintained for that purpose in
Berlin, Connecticut in any coin or currency of the United States of America
which at the time of payment is legal tender for payment of public and private
debts; provided, however, that payment of interest may be made at the option of
the Company by check mailed to the registered holder at such address as shall
appear in the Register. Notwithstanding the foregoing, so long as the holder
of this Debenture is WMECO Capital, the payment of the principal of, premium,
if any, and interest (including Additional Interest, if any) pursuant to this
Debenture will be made at such place and to such account as may be designated
by WMECO Capital.
<PAGE>
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture hereinafter referred to, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Debenture is issued subject to the provisions of such Indenture with respect
thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee
on as such Holder's behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided, and (c)
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes. Each Holder hereof, by such Holder's acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such Holder upon
said provisions.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Series A Debentures"), issued
under and pursuant to, and limited in aggregate principal amount as specified
in, an Indenture dated as of ________, 199 (the "Indenture"), executed and
delivered between the Company and Bankers Trust Company, as trustee (the
"Trustee"), to which reference is made to the Indenture for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company, and the holders of the Series A
Debentures and any other series of debentures issued thereunder (collectively
with the Series A Debentures, the "Debentures"). By the terms of the
Indenture, Debentures are issuable in series which may vary as to amount, date
of maturity, rate of interest, and in other respects as in the Indenture
provided.
The Series A Debentures are subject to redemption prior to maturity at the
option of the Company at the price of 100% of the principal amount thereof plus
accrued interest to the redemption date in whole or in part (i) from time to
time on or after ________ __, ____, (ii) from time to time upon or after the
dissolution of WMECO Capital, or (iii) from time to time if the Company shall
be required to pay Additional Interest thereon.
The Series A Debentures are subject to mandatory redemption prior to
maturity at the price of 100% of the principal amount thereof plus accrued
interest to the redemption date in whole or in part upon a redemption of the
Series A Preferred Securities (as defined in the Indenture), but if in part, in
an aggregate principal amount equal to the aggregate stated liquidation
preference of the Series A Preferred Securities redeemed.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default shall have occurred and be continuing, the
principal of all of the Debentures may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect, and subject to
the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Debenture upon compliance by the Company with certain
conditions set forth therein.
Subject to certain exceptions in the Indenture which require the consent
of every Holder, (i) the Indenture or the Series A Debentures may be amended
with the written consent of the Holders of 66 2/3% in aggregate principal
amount of the Series A Debentures at the time outstanding, and (ii) certain
<PAGE>
defaults or noncompliance with certain provisions may be waived by the written
consent of the Holders of 66 2/3% in aggregate principal amount of the Series A
Debentures at the time outstanding; provided, however, that if any other series
of the Debentures is at the time outstanding, then such written consents shall
be by Holders of 66 2/3% in aggregate principal amount of all Debentures at the
time outstanding and affected by such amendment or waiver. Subject to certain
exceptions in the Indenture, without the consent of any Debentureholder, the
Company and the Trustee may amend the Indenture or the Debentures to cure any
ambiguity, defect, or inconsistency, to bind a successor to the Company to the
obligations of the Indenture, to provide for uncertificated Debentures in
addition to certificated Debentures, to comply with any requirements of the
Securities and Exchange Commission in connection with the qualification of the
Indenture under the TIA, or to make any change that does not adversely affect
the rights of any Debentureholder. Amendments bind all Holders and subsequent
Holders.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
The Company shall have the right at any time during the term of the Series
A Debentures, from time to time to extend the interest payment period of such
Debentures to up to 60 months (the "Extension Period"), provided that such
Extension Period may not extend beyond the stated maturity date or the date of
redemption of the Debentures, and provided further that at the end of each
Extension Period the Company shall pay all interest then accrued and unpaid
(together with interest thereon compounded monthly at the rate specified for
the applicable series of Debentures, to the extent permitted by applicable
law). During an Extension Period the Company shall not declare or pay any
dividend on, redeem, or purchase any of its capital stock. Prior to the
termination of any Extension Period, the Company may shorten or further extend
the interest payment period, provided that such Extension Period together with
all such further extensions thereof shall not exceed 60 consecutive months. At
the termination of any such Extension Period and upon the payment of all
accrued and unpaid interest and any additional amounts then due, the Company
may select a new Extension Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on
the Debenture Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Debentures
of authorized denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to presentment for registration of transfer of this Debenture, the
Company, the Trustee, any paying agent, and any Registrar may deem and treat
the registered holder hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Registrar) for the purpose of
receiving payment of or on account of the principal hereof and premium, if any,
and interest due hereon and for all other purposes, and neither the Company nor
<PAGE>
the Trustee nor any payment agent nor any Registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released. Debentures of this series so issued are
issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Debentures of this series are
exchangeable for a like aggregate principal amount of Debentures of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Debenture shall not be valid until an authorized officer of the
Trustee manually signs the Trustee's Certificate of Authentication below.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By:
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Is One Of The Debentures Referred
To In The Within-mentioned Indenture.
BANKERS TRUST COMPANY
By:
Authorized Signatory
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign and
transfer this Debenture to:
(Insert assignee's social security or tax I.D. number)
(Print or type assignee's name, address, and zip code)
and irrevocably appoint _________________________________ agent to transfer
this Debenture on the books of the Company. The agent may substitute another
to act for him.
Dated: ________________ Signature:
(Sign exactly as your name appears
on this Debenture)
Signature Guaranty:
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.3
_________________________________________________________________
_________________________________________________________________
__________________________________________
PAYMENT AND GUARANTY AGREEMENT
of
THE CONNECTICUT LIGHT AND POWER COMPANY
Dated as of ________ __, 199__
__________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01. Guarantor's Obligation to Pay . . . . . . . . . . . . . 2
Section 2.02. Waiver of Notice Etc. . . . . . . . . . . . . . . . . . 3
Section 2.03. No Impairment of Guarantor's Obligations . . . . . . . 3
Section 2.04. Guaranty Agreement for the Benefit of Holders . . . . . 3
Section 2.05. Enforcement Directly Against the Guarantor . . . . . . 4
Section 2.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.07. Obligation Independent . . . . . . . . . . . . . . . . 4
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.01. Restriction on Distributions . . . . . . . . . . . . . 5
Section 3.02. Consolidation, Merger, Etc . . . . . . . . . . . . . . 5
Section 3.03. Subordination . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.01. Successors, Assigns, Etc . . . . . . . . . . . . . . . 5
Section 5.02. Amendment . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.04. Guaranty Inseparable from the Preferred Securities . . 6
Section 5.05. Governing Law . . . . . . . . . . . . . . . . . . . . . 6
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
<PAGE>
PAYMENT AND GUARANTY AGREEMENT
THIS PAYMENT AND GUARANTY AGREEMENT ("Guaranty Agreement"), dated as of
______ __, 199_, is executed and delivered by The Connecticut Light and Power
Company, a Connecticut corporation (the "Guarantor"), for the benefit of the
Holders (as defined below) from time to time of the Preferred Securities (as
defined below) of CL&P Capital, L.P., a Delaware limited partnership ("CL&P
Capital").
WHEREAS, pursuant to the Amended and Restated Limited Partnership
Agreement, dated as of the date hereof, of CL&P Capital (the "Partnership
Agreement"), CL&P Capital may issue one or more series of Cumulative Monthly
Income Preferred Securities (the "Preferred Securities"); and
WHEREAS, pursuant to the Partnership Agreement, CL&P Capital will loan the
proceeds from the issuance and sale of the Preferred Securities and the capital
contribution of the General Partner (as defined below) to CL&P Capital to the
Guarantor, and the Guarantor will issue subordinated debentures (the
"Debentures") in accordance with the Indenture (as defined below) to evidence
such loan; and
WHEREAS, the Guarantor desires to irrevocably and unconditionally agree,
to the extent set forth herein, to pay to the Holders (as defined below) the
Guaranty Payments (as defined below) and to make certain other undertakings on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and other consideration,
receipt of which is hereby acknowledged, the Guarantor, intending to be legally
bound hereby, agrees as follows:
ARTICLE I
As used in this Guaranty Agreement, each term set forth below shall,
unless the context otherwise requires, have the following meaning. Each
capitalized term used but not otherwise defined herein shall have the meaning
assigned to such term in the Partnership Agreement.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations, or other equivalents of or interests in
(however designated) corporate stock, including any preferred stock.
"General Partner" shall mean the Guarantor or its successor(s) as general
partner of CL&P Capital.
"Guaranty Payments" shall mean the following payments, without
duplication, to the extent not paid by CL&P Capital: (i) any accumulated and
unpaid monthly distributions on the Preferred Securities out of monies legally
available therefor held by CL&P Capital, (ii) the Redemption Price (as defined
<PAGE>
below) payable with respect to any Preferred Securities required to be redeemed
by CL&P Capital out of monies legally available therefor held by CL&P Capital,
and (iii) upon a liquidation of CL&P Capital, the lesser of (a) the Liquidation
Distribution (as defined below) and (b) the amount of assets of CL&P Capital
available for distribution to Holders in liquidation of CL&P Capital.
"Holder" shall mean any person in whose name a Preferred Security is
registered on the registration books maintained by CL&P Capital; provided,
however, that in determining whether the Holders of the requisite percentage of
Preferred Securities have given any request, notice, consent, or waiver
hereunder, "Holder" shall not include the Guarantor or any corporation,
association, partnership, or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) the
Guarantor, (ii) the Guarantor and one or more Subsidiaries, or (iii) one or
more Subsidiaries.
"Indenture" shall mean the Indenture, dated ________ __, 199_, between
the Guarantor and Bankers Trust Company, as trustee, governing the issuance by
Guarantor of the Debentures.
"Liquidation Distribution" shall mean the aggregate of the stated
liquidation preference of $25 per Preferred Security and all accumulated and
unpaid distributions to the date of payment.
"Redemption Price" shall mean the aggregate of $25 per Preferred Security
and all accumulated and unpaid distributions to the date fixed for redemption.
"Special Representative" shall mean any representative of the Holders
appointed pursuant to Section 13.02(d) of the Partnership Agreement.
"Subsidiary" means any corporation, association, partnership, or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Guarantor, (ii) the Guarantor and one or
more Subsidiaries, or (iii) one or more Subsidiaries.
ARTICLE II
Section 2.01. Guarantor's Obligation to Pay. The Guarantor hereby
irrevocably and unconditionally agrees to pay in full to the Holders the
Guaranty Payments, as and when due (except to the extent paid by CL&P Capital),
to the fullest extent permitted by law, regardless of any defense, right of
set-off, or counterclaim which the Guarantor may have or assert against CL&P
Capital or the General Partner. The Guarantor's obligation to make a Guaranty
Payment may be satisfied by direct payment by the Guarantor to the Holders or
by payment of such amounts by CL&P Capital to the Holders. Notwithstanding
anything to the contrary herein, the Guarantor retains all of its rights under
Section 4.01(b) of the Indenture to extend the interest payment period on the
Debentures (an "Extension Period") and the Guarantor shall not be obligated
hereunder to pay during any Extension Period any monthly distributions on the
Preferred Securities which are not paid by CL&P Capital during such Extension
Period.
Section 2.02. Waiver of Notice Etc. The Guarantor hereby waives notice
of acceptance of this Guaranty Agreement and of any liability to which it
<PAGE>
applies or may apply, presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of redemption, and all other notices and
demands.
Section 2.03. No Impairment of Guarantor's Obligations. Except as
otherwise set forth herein, the obligations, covenants, agreements, and duties
of the Guarantor under this Guaranty Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(1) the release or waiver, by operation of law or otherwise, of the
performance or observance by CL&P Capital of any express or implied
agreement, covenant, term, or condition relating to the Preferred
Securities to be performed or observed by CL&P Capital;
(2) the extension of time for the payment by CL&P Capital of all or
any portion of the distributions, Redemption Price, Liquidation
Distribution, or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(3) any failure, omission, delay, or lack of diligence on the part
of the Holders or the Special Representative to enforce, assert, or
exercise any right, privilege, power, or remedy conferred on the Holders
or the Special Representative pursuant to the terms of the Preferred
Securities, or any action on the part of CL&P Capital granting indulgence
or extension of any kind;
(4) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition, or readjustment of
debt of, or other similar proceedings affecting, CL&P Capital or any of
the assets of CL&P Capital;
(5) any invalidity of, or defect or deficiency in, any of the
Preferred Securities; or
(6) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred.
There shall be no obligation to the Holders to give notice to or obtain the
consent of the Guarantor with respect to the occurrence of any of the
foregoing.
Section 2.04. Guaranty Agreement for the Benefit of Holders. The
Guarantor expressly acknowledges that (i) this Guaranty Agreement will be
deposited with the General Partner to be held for the benefit of the Holders;
(ii) in the event of the appointment of a Special Representative, the Special
Representative may enforce this Guaranty Agreement for such purpose; (iii) if
no Special Representative has been appointed, the General Partner has the right
to enforce this Guaranty Agreement on behalf of the Holders; (iv) the Holders
of not less than 10% in aggregate stated liquidation preference of the
Preferred Securities have the right to direct the time, method, and place of
conducting any proceeding for any remedy available in respect of this Guaranty
Agreement including the giving of directions to the General Partner or the
Special Representative as the case may be; and (v) if the General Partner or
the Special Representative fails to enforce this Guaranty Agreement as above
provided, any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guaranty Agreement, without first
<PAGE>
instituting a legal proceeding against CL&P Capital or any other person or
entity.
Section 2.05. Enforcement Directly Against the Guarantor. This is a
guaranty of payment and not of collection. A Holder or the Special
Representative may enforce this Guaranty Agreement directly against the
Guarantor, and the Guarantor will waive any right or remedy to require that any
action be brought against CL&P Capital or any other person or entity before
proceeding against the Guarantor. The Guarantor agrees that this Guaranty
Agreement shall not be discharged except by payment of the Guaranty Payments in
full (to the extent not paid by CL&P Capital) and by complete performance of
all obligations of the Guarantor contained in this Guaranty Agreement.
Section 2.06. Subrogation. The Guarantor will be subrogated to all
rights of the Holders against CL&P Capital in respect of any amounts paid to
the Holders by the Guarantor under this Guaranty Agreement; provided, however,
that the Guarantor hereby releases the Holders from all, and agrees not to
assert or enforce (whether by or in a legal or equitable proceeding or
otherwise) any, "claims" (as defined in Section 101(5) of the United States
Bankruptcy Code) against CL&P Capital, whether arising under applicable law or
otherwise, to which the Guarantor is or would at any time be entitled (by
virtue of its obligations hereunder or any payment made pursuant hereto,
including any such claims to which the Guarantor may be entitled as a result of
any right of subrogation or any indemnity, reimbursement or other agreement);
provided further that to the extent such rights are not so released, the
Guarantor shall not (except to the extent required by mandatory provisions of
law) exercise any such rights (including by way of subrogation or any
indemnity, reimbursement or other agreement), in all cases as a result of a
payment under this Guaranty Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Guaranty Agreement. To the extent that
any amounts shall be paid to the Guarantor in violation of the preceding
sentence, such amounts shall be held in trust by the Guarantor for the benefit
of the Holders and not commingled with any of the Guarantor's other funds and
the Guarantor agrees to pay over such amounts to the Holders.
Section 2.07. Obligation Independent. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of CL&P Capital
with respect to the Preferred Securities and that the Guarantor shall be liable
as principal and sole debtor hereunder to make Guaranty Payments pursuant to
the terms of this Guaranty Agreement notwithstanding the occurrence of any
event referred to in subsections (1) through (6), inclusive, of Section 2.03
hereof.
ARTICLE III
Section 3.01. Restriction on Distributions. So long as any Preferred
Securities remain outstanding, neither the Guarantor nor any Subsidiary shall
declare or pay any dividend on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its Capital Stock (other than
dividends paid by a wholly-owned Subsidiary) if at such time the Guarantor
shall be in default with respect to its payment or other obligations hereunder
or if there shall have occurred and be continuing any Default or Event of
Default under the Indenture. The Guarantor shall take all actions necessary to
ensure the compliance of any Subsidiaries with this Section 3.01.
Section 3.02. Consolidation, Merger, Etc. So long as any Preferred
Securities are outstanding, the Guarantor agrees to maintain its corporate
existence; provided that the Guarantor may consolidate with or merge with or
into, or sell, convey, transfer, or lease all or substantially all of its
assets (either in one transaction or a series of transactions) to, any person,
<PAGE>
corporation, partnership, limited liability company, joint venture association,
joint stock company, trust, or unincorporated association if such entity formed
by or surviving such consolidation or merger or to which such sale, conveyance,
transfer, or lease shall have been made, if other than the Guarantor, (i) is
organized and existing under the laws of the United States of America or any
state thereof or the District of Columbia, and (ii) shall expressly assume all
the obligations of the Guarantor under this Agreement.
Section 3.03. Subordination. This Guaranty Agreement will constitute an
unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all general liabilities of the Guarantor.
ARTICLE IV
This Guaranty Agreement shall terminate and be of no further force and
effect upon full payment of the Redemption Price of all Preferred Securities
then outstanding or upon full payment of the amounts payable to the Holders
upon liquidation of CL&P Capital; provided, however, that this Guaranty
Agreement shall continue to be effective or shall be reinstated, as the case
may be, if at any time any Holder must restore payments of any sums paid under
the Preferred Securities or under this Guaranty Agreement for any reason
whatsoever.
ARTICLE V
Section 5.01. Successors, Assigns, Etc. All guaranties and agreements
contained in this Guaranty Agreement shall bind the successors, assigns,
receivers, trustees, and representatives of the Guarantor and shall inure to
the benefit of the Holders. Except as provided in Section 3.02, Guarantor may
not assign its obligations hereunder without the prior approval of the Holders
of not less than 66 2/3% of the aggregate stated liquidation preference of all
Preferred Securities then outstanding.
Section 5.02. Amendment. This Guaranty Agreement may only be amended by
a written instrument executed by the Guarantor; provided that, so long as any
of the Preferred Securities remain outstanding, any such amendment that
adversely affects the Holders, any termination of this Guaranty Agreement, and
any waiver of compliance with any covenant hereunder shall be effected only
with the prior approval of the Holders of not less than 66 2/3% of the
aggregate liquidation preference of all Preferred Securities then outstanding.
Section 5.03. Notices. Any notice or communication to the Guarantor
shall be in writing and delivered in person or mailed by first-class mail,
postage prepaid, addressed as follows:
The Connecticut Light and Power Company
Selden Street
Berlin, Connecticut 06037
Attention:
The Guarantor, by giving notice to the General Partner or Special
Representative, may designate additional or different addresses for subsequent
notices or communications.
All notices, requests, or other communications required or permitted to be
given hereunder to the Holders shall be deemed given if in writing and
delivered by the Guarantor in the same manner as notices sent by CL&P Capital
to the Holders.
<PAGE>
Section 5.04. Guaranty Inseparable from the Preferred Securities. This
Guaranty Agreement is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.
Section 5.05. Governing Law. This Guaranty Agreement shall be governed
by and construed and interpreted in accordance with the laws of the State of
Connecticut without giving effect to conflict of law principles thereof.
<PAGE>
THIS GUARANTY AGREEMENT is executed as of the day and year first above
written.
THE CONNECTICUT LIGHT AND POWER COMPANY
By:______________________________
Name:
Title:
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.4
_________________________________________________________________
_________________________________________________________________
__________________________________________
PAYMENT AND GUARANTY AGREEMENT
of
WESTERN MASSACHUSETTS ELECTRIC COMPANY
Dated as of ________ __, 199__
__________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01. Guarantor's Obligation to Pay . . . . . . . . . . . . . 2
Section 2.02. Waiver of Notice Etc. . . . . . . . . . . . . . . . . . 3
Section 2.03. No Impairment of Guarantor's Obligations . . . . . . . 3
Section 2.04. Guaranty Agreement for the Benefit of Holders . . . . . 3
Section 2.05. Enforcement Directly Against the Guarantor . . . . . . 4
Section 2.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.07. Obligation Independent . . . . . . . . . . . . . . . . 4
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.01. Restriction on Distributions . . . . . . . . . . . . . 5
Section 3.02. Consolidation, Merger, Etc . . . . . . . . . . . . . . 5
Section 3.03. Subordination . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.01. Successors, Assigns, Etc . . . . . . . . . . . . . . . 5
Section 5.02. Amendment . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.04. Guaranty Inseparable from the Preferred Securities . . 6
Section 5.05. Governing Law . . . . . . . . . . . . . . . . . . . . . 6
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
<PAGE>
PAYMENT AND GUARANTY AGREEMENT
THIS PAYMENT AND GUARANTY AGREEMENT ("Guaranty Agreement"), dated as of
______ __, 199_, is executed and delivered by Western Massachusetts Electric
Company, a Massachusetts corporation (the "Guarantor"), for the benefit of the
Holders (as defined below) from time to time of the Preferred Securities (as
defined below) of WMECO Capital, L.P., a Delaware limited partnership ("WMECO
Capital").
WHEREAS, pursuant to the Amended and Restated Limited Partnership
Agreement, dated as of the date hereof, of WMECO Capital (the "Partnership
Agreement"), WMECO Capital may issue one or more series of Cumulative Monthly
Income Preferred Securities (the "Preferred Securities"); and
WHEREAS, pursuant to the Partnership Agreement, WMECO Capital will loan
the proceeds from the issuance and sale of the Preferred Securities and the
capital contribution of the General Partner (as defined below) to WMECO Capital
to the Guarantor, and the Guarantor will issue subordinated debentures (the
"Debentures") in accordance with the Indenture (as defined below) to evidence
such loan; and
WHEREAS, the Guarantor desires to irrevocably and unconditionally agree,
to the extent set forth herein, to pay to the Holders (as defined below) the
Guaranty Payments (as defined below) and to make certain other undertakings on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and other consideration,
receipt of which is hereby acknowledged, the Guarantor, intending to be legally
bound hereby, agrees as follows:
ARTICLE I
As used in this Guaranty Agreement, each term set forth below shall,
unless the context otherwise requires, have the following meaning. Each
capitalized term used but not otherwise defined herein shall have the meaning
assigned to such term in the Partnership Agreement.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations, or other equivalents of or interests in
(however designated) corporate stock, including any preferred stock.
"General Partner" shall mean the Guarantor or its successor(s) as general
partner of WMECO Capital.
"Guaranty Payments" shall mean the following payments, without
duplication, to the extent not paid by WMECO Capital: (i) any accumulated and
unpaid monthly distributions on the Preferred Securities out of monies legally
available therefor held by WMECO Capital, (ii) the Redemption Price (as defined
<PAGE>
below) payable with respect to any Preferred Securities required to be redeemed
by WMECO Capital out of monies legally available therefor held by WMECO
Capital, and (iii) upon a liquidation of WMECO Capital, the lesser of (a) the
Liquidation Distribution (as defined below) and (b) the amount of assets of
WMECO Capital available for distribution to Holders in liquidation of WMECO
Capital.
"Holder" shall mean any person in whose name a Preferred Security is
registered on the registration books maintained by WMECO Capital; provided,
however, that in determining whether the Holders of the requisite percentage of
Preferred Securities have given any request, notice, consent, or waiver
hereunder, "Holder" shall not include the Guarantor or any corporation,
association, partnership, or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) the
Guarantor, (ii) the Guarantor and one or more Subsidiaries, or (iii) one or
more Subsidiaries.
"Indenture" shall mean the Indenture, dated ________ __, 199_, between
the Guarantor and Bankers Trust Company, as trustee, governing the issuance by
Guarantor of the Debentures.
"Liquidation Distribution" shall mean the aggregate of the stated
liquidation preference of $25 per Preferred Security and all accumulated and
unpaid distributions to the date of payment.
"Redemption Price" shall mean the aggregate of $25 per Preferred Security
and all accumulated and unpaid distributions to the date fixed for redemption.
"Special Representative" shall mean any representative of the Holders
appointed pursuant to Section 13.02(d) of the Partnership Agreement.
"Subsidiary" means any corporation, association, partnership, or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Guarantor, (ii) the Guarantor and one or
more Subsidiaries, or (iii) one or more Subsidiaries.
ARTICLE II
Section 2.01. Guarantor's Obligation to Pay. The Guarantor hereby
irrevocably and unconditionally agrees to pay in full to the Holders the
Guaranty Payments, as and when due (except to the extent paid by WMECO
Capital), to the fullest extent permitted by law, regardless of any defense,
right of set-off, or counterclaim which the Guarantor may have or assert
against WMECO Capital or the General Partner. The Guarantor's obligation to
make a Guaranty Payment may be satisfied by direct payment by the Guarantor to
the Holders or by payment of such amounts by WMECO Capital to the Holders.
Notwithstanding anything to the contrary herein, the Guarantor retains all of
its rights under Section 4.01(b) of the Indenture to extend the interest
payment period on the Debentures (an "Extension Period") and the Guarantor
shall not be obligated hereunder to pay during any Extension Period any monthly
distributions on the Preferred Securities which are not paid by WMECO Capital
during such Extension Period.
<PAGE>
Section 2.02. Waiver of Notice Etc. The Guarantor hereby waives notice
of acceptance of this Guaranty Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of redemption, and all other notices and
demands.
Section 2.03. No Impairment of Guarantor's Obligations. Except as
otherwise set forth herein, the obligations, covenants, agreements, and duties
of the Guarantor under this Guaranty Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(1) the release or waiver, by operation of law or otherwise, of the
performance or observance by WMECO Capital of any express or implied
agreement, covenant, term, or condition relating to the Preferred
Securities to be performed or observed by WMECO Capital;
(2) the extension of time for the payment by WMECO Capital of all or
any portion of the distributions, Redemption Price, Liquidation
Distribution, or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(3) any failure, omission, delay, or lack of diligence on the part
of the Holders or the Special Representative to enforce, assert, or
exercise any right, privilege, power, or remedy conferred on the Holders
or the Special Representative pursuant to the terms of the Preferred
Securities, or any action on the part of WMECO Capital granting indulgence
or extension of any kind;
(4) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition, or readjustment of
debt of, or other similar proceedings affecting, WMECO Capital or any of
the assets of WMECO Capital;
(5) any invalidity of, or defect or deficiency in, any of the
Preferred Securities; or
(6) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred.
There shall be no obligation to the Holders to give notice to or obtain the
consent of the Guarantor with respect to the occurrence of any of the
foregoing.
Section 2.04. Guaranty Agreement for the Benefit of Holders. The
Guarantor expressly acknowledges that (i) this Guaranty Agreement will be
deposited with the General Partner to be held for the benefit of the Holders;
(ii) in the event of the appointment of a Special Representative, the Special
Representative may enforce this Guaranty Agreement for such purpose; (iii) if
no Special Representative has been appointed, the General Partner has the right
to enforce this Guaranty Agreement on behalf of the Holders; (iv) the Holders
of not less than 10% in aggregate stated liquidation preference of the
Preferred Securities have the right to direct the time, method, and place of
conducting any proceeding for any remedy available in respect of this Guaranty
Agreement including the giving of directions to the General Partner or the
Special Representative as the case may be; and (v) if the General Partner or
the Special Representative fails to enforce this Guaranty Agreement as above
provided, any Holder may institute a legal proceeding directly against the
<PAGE>
Guarantor to enforce its rights under this Guaranty Agreement, without first
instituting a legal proceeding against WMECO Capital or any other person or
entity.
Section 2.05. Enforcement Directly Against the Guarantor. This is a
guaranty of payment and not of collection. A Holder or the Special
Representative may enforce this Guaranty Agreement directly against the
Guarantor, and the Guarantor will waive any right or remedy to require that any
action be brought against WMECO Capital or any other person or entity before
proceeding against the Guarantor. The Guarantor agrees that this Guaranty
Agreement shall not be discharged except by payment of the Guaranty Payments in
full (to the extent not paid by WMECO Capital) and by complete performance of
all obligations of the Guarantor contained in this Guaranty Agreement.
Section 2.06. Subrogation. The Guarantor will be subrogated to all
rights of the Holders against WMECO Capital in respect of any amounts paid to
the Holders by the Guarantor under this Guaranty Agreement; provided, however,
that the Guarantor hereby releases the Holders from all, and agrees not to
assert or enforce (whether by or in a legal or equitable proceeding or
otherwise) any, "claims" (as defined in Section 101(5) of the United States
Bankruptcy Code) against WMECO Capital, whether arising under applicable law or
otherwise, to which the Guarantor is or would at any time be entitled (by
virtue of its obligations hereunder or any payment made pursuant hereto,
including any such claims to which the Guarantor may be entitled as a result of
any right of subrogation or any indemnity, reimbursement or other agreement);
provided further that to the extent such rights are not so released, the
Guarantor shall not (except to the extent required by mandatory provisions of
law) exercise any such rights (including by way of subrogation or any
indemnity, reimbursement or other agreement), in all cases as a result of a
payment under this Guaranty Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Guaranty Agreement. To the extent that
any amounts shall be paid to the Guarantor in violation of the preceding
sentence, such amounts shall be held in trust by the Guarantor for the benefit
of the Holders and not commingled with any of the Guarantor's other funds and
the Guarantor agrees to pay over such amounts to the Holders.
Section 2.07. Obligation Independent. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of WMECO Capital
with respect to the Preferred Securities and that the Guarantor shall be liable
as principal and sole debtor hereunder to make Guaranty Payments pursuant to
the terms of this Guaranty Agreement notwithstanding the occurrence of any
event referred to in subsections (1) through (6), inclusive, of Section 2.03
hereof.
ARTICLE III
Section 3.01. Restriction on Distributions. So long as any Preferred
Securities remain outstanding, neither the Guarantor nor any Subsidiary shall
declare or pay any dividend on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its Capital Stock (other than
dividends paid by a wholly-owned Subsidiary) if at such time the Guarantor
shall be in default with respect to its payment or other obligations hereunder
or if there shall have occurred and be continuing any Default or Event of
Default under the Indenture. The Guarantor shall take all actions necessary to
ensure the compliance of any Subsidiaries with this Section 3.01.
Section 3.02. Consolidation, Merger, Etc. So long as any Preferred
Securities are outstanding, the Guarantor agrees to maintain its corporate
existence; provided that the Guarantor may consolidate with or merge with or
into, or sell, convey, transfer, or lease all or substantially all of its
<PAGE>
assets (either in one transaction or a series of transactions) to, any person,
corporation, partnership, limited liability company, joint venture association,
joint stock company, trust, or unincorporated association if such entity formed
by or surviving such consolidation or merger or to which such sale, conveyance,
transfer, or lease shall have been made, if other than the Guarantor, (i) is
organized and existing under the laws of the United States of America or any
state thereof or the District of Columbia, and (ii) shall expressly assume all
the obligations of the Guarantor under this Agreement.
Section 3.03. Subordination. This Guaranty Agreement will constitute an
unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all general liabilities of the Guarantor.
ARTICLE IV
This Guaranty Agreement shall terminate and be of no further force and
effect upon full payment of the Redemption Price of all Preferred Securities
then outstanding or upon full payment of the amounts payable to the Holders
upon liquidation of WMECO Capital; provided, however, that this Guaranty
Agreement shall continue to be effective or shall be reinstated, as the case
may be, if at any time any Holder must restore payments of any sums paid under
the Preferred Securities or under this Guaranty Agreement for any reason
whatsoever.
ARTICLE V
Section 5.01. Successors, Assigns, Etc. All guaranties and agreements
contained in this Guaranty Agreement shall bind the successors, assigns,
receivers, trustees, and representatives of the Guarantor and shall inure to
the benefit of the Holders. Except as provided in Section 3.02, Guarantor may
not assign its obligations hereunder without the prior approval of the Holders
of not less than 66 2/3% of the aggregate stated liquidation preference of all
Preferred Securities then outstanding.
Section 5.02. Amendment. This Guaranty Agreement may only be amended by
a written instrument executed by the Guarantor; provided that, so long as any
of the Preferred Securities remain outstanding, any such amendment that
adversely affects the Holders, any termination of this Guaranty Agreement, and
any waiver of compliance with any covenant hereunder shall be effected only
with the prior approval of the Holders of not less than 66 2/3% of the
aggregate liquidation preference of all Preferred Securities then outstanding.
Section 5.03. Notices. Any notice or communication to the Guarantor
shall be in writing and delivered in person or mailed by first-class mail,
postage prepaid, addressed as follows:
Western Massachusetts Electric Company
Selden Street
Berlin, Connecticut 06037
Attention:
The Guarantor, by giving notice to the General Partner or Special
Representative, may designate additional or different addresses for subsequent
notices or communications.
All notices, requests, or other communications required or permitted to be
given hereunder to the Holders shall be deemed given if in writing and
delivered by the Guarantor in the same manner as notices sent by WMECO Capital
to the Holders.
<PAGE>
Section 5.04. Guaranty Inseparable from the Preferred Securities. This
Guaranty Agreement is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.
Section 5.05. Governing Law. This Guaranty Agreement shall be governed
by and construed and interpreted in accordance with the laws of the
Commonwealth of Massachusetts without giving effect to conflict of law
principles thereof.
<PAGE>
THIS GUARANTY AGREEMENT is executed as of the day and year first above
written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By:______________________________
Name:
Title:
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.5
CL&P CAPITAL, L.P.
Preferred Securities
representing limited partner interests
guaranteed to the extent described in
the applicable Pricing Agreement
by The Connecticut Light and Power Company
___________________________________________________
Underwriting Agreement
__________, 1994
[Goldman, Sachs & Co.
[[Name(s) of Co-Representative(s)]
c/o Goldman, Sachs & Co.]
85 Broad Street,
New York, New York 10004.]
[To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.]
Ladies and Gentlemen:
From time to time CL&P Capital, L.P. ("CL&P Capital"), a limited
partnership formed under the laws of the State of Delaware, as issuer, and The
Connecticut Light and Power Company, a Connecticut corporation, as guarantor
(the "Guarantor"), each proposes to enter into one or more Pricing Agreements
(each a Pricing Agreement ) in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
Underwriters with respect to such Pricing Agreement and the securities
specified therein) certain preferred securities representing limited partner
interests in CL&P Capital (liquidation preference $25 per preferred partner
interest) (the "Preferred Securities") specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, the Designated Preferred
Securities ), guaranteed by the Guarantor as to the payment of distributions,
to the extent CL&P Capital has cash on hand sufficient to permit such payments
and funds legally available therefor, and as to payments on liquidation or
redemption to the extent set forth in the Prospectus (as defined below) with
respect to such Preferred Securities (the "Guarantee"). The Designated
Preferred Securities and the Guarantee are herein collectively referred to as
the "Designated Securities".
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Designated Securities, for whom the firms
designated as representatives of the Underwriters of such Designated Securities
in the Pricing Agreement relating thereto will act as representatives (the
<PAGE>
Representatives ). The term Representatives also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of CL&P Capital to sell any
of the Preferred Securities or as an obligation of any of the Underwriters to
purchase any of the Preferred Securities. The obligation of CL&P Capital to
issue and sell any of the Preferred Securities and the obligation of any of the
Underwriters to purchase any of the Preferred Securities shall be evidenced by
the Pricing Agreement with respect to the Designated Securities specified
therein. Each Pricing Agreement shall specify the aggregate amount of
Designated Securities, the initial public offering price of such Designated
Securities or the manner of determining such price, the terms of the Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters, the amount of such
Designated Securities to be purchased by each Underwriter and the commission,
if any, payable to the Underwriters with respect thereto and shall set forth
the date, time and manner of delivery of such Designated Securities, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect
thereto) the terms of such Designated Securities. A Pricing Agreement shall be
in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Each of CL&P Capital and the Guarantor, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-_______) in
respect of the Preferred Securities, the Guarantee and the [Deferrable
Interest] Subordinated Debentures of the Guarantor (the "Debt Securities")
has been filed with the Exchange Commission (the Commission ); such
registration statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus included therein, to
the Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; no other document with respect
to such registration statement or document incorporated by reference
therein has heretofore been filed, or transmitted for filing, with the
Commission (other than prospectuses filed pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Securities Act of 1933,
as amended (the Act ) each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter called a
Preliminary Prospectus ; the various parts of such registration
statement, including all exhibits thereto and the documents incorporated
by reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective but
excluding Form T-1, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the Registration Statement ; the prospectus relating to the
Preferred Securities, the Guarantee and the Debt Securities, in the form
in which it has most recently been filed, or transmitted for filing, with
the Commission on or prior to the date of this Agreement, is hereinafter
<PAGE>
called the Prospectus ; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable
form under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the Exchange Act ), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of
CL&P Capital and the Guarantor filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to the Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to CL&P Capital by an
Underwriter of Designated Preferred Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Preferred Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the Trust
Indenture Act ) and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to CL&P
Capital by an Underwriter of Designated Preferred Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Preferred Securities;
<PAGE>
(d) Neither CL&P Capital, the Guarantor nor any of the Guarantor's
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or long-term debt of the Guarantor or any of its subsidiaries or any
change in the capital accounts or long-term debt of CL&P Capital or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting (i) the general affairs,
management, financial position, stockholders equity or results of
operations of the Guarantor and its subsidiaries or (ii) the general
affairs, management, financial position, capital accounts or results of
operations of CL&P Capital, otherwise than as set forth or contemplated in
the Prospectus;
(e) CL&P Capital has been duly formed and is validly existing as a
limited partnership in good standing under the Delaware Revised Uniform
Limited Partnership Act, as amended (the "Partnership Act"); CL&P Capital
has no subsidiaries; CL&P Capital is a special purpose limited partnership
as described in the Prospectus and has conducted and will conduct no
business other than the transactions contemplated by this Agreement and
described in the Prospectus; CL&P Capital is not a party to or bound by
any agreement or instrument other than its limited partnership agreement
(in the form filed as an exhibit to the Registration Statement, the
"Limited Partnership Agreement"); CL&P Capital has no liabilities or
obligations other than those arising out of the transactions contemplated
by this Agreement and described in the Prospectus; and CL&P Capital is not
a party to or subject to any action, suit or proceeding of any nature;
(f) The Guarantor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Connecticut, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; the
Guarantor has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification;
(g) The Guarantor has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Guarantor have been duly and validly authorized and issued and are fully
paid and non-assessable and are owned directly or indirectly by Northeast
Utilities ("NU"), free and clear of all liens, encumbrances, equities or
claims;
(h) The Preferred Securities have been duly and validly authorized,
and, when the Designated Securities are issued and delivered pursuant to
this Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will be duly and validly issued and
fully paid and non-assessable; the Preferred Securities conform to the
description thereof contained in the Registration Statement and the
Designated Securities will conform to the description thereof contained in
the Prospectus as amended or supplemented with respect to such Designated
Securities;
<PAGE>
(i) The Limited Partnership Agreement has been duly authorized by
the Guarantor and constitutes a valid and legally binding obligation of
the Guarantor, in its capacity as general partner of CL&P Capital,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(j) The Guarantor is the sole general partner of CL&P Capital;
Northeast Utilities Service Company, a Connecticut corporation, is the
sole Class A Limited Partner of CL&P Capital (the "Class A Limited
Partner"); and the Class A Limited Partner has been duly incorporated and
is validly existing in good standing as a corporation under the laws of
the State of Connecticut, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Prospectus; and all of the issued general and limited partner interests of
CL&P Capital are owned by the Guarantor and the Class A Limited Partner,
respectively, and have been duly and validly authorized and validly
issued, free and clear of all liens, encumbrances, equities or claims;
(k) The issue and sale of the Preferred Securities and the
compliance by CL&P Capital and the Guarantor with all of the provisions of
this Agreement, any Pricing Agreement, the Indenture and the Guarantee,
and the consummation of the transactions contemplated herein and therein
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which CL&P Capital or the Guarantor is a party or by which CL&P Capital
and the Guarantor is bound or to which any of the property or assets of
CL&P Capital or the Guarantor is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Guarantor or the Certificate of Limited Partnership of CL&P
Capital or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the CL&P Capital or
the Guarantor or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Preferred Securities or the consummation by the CL&P Capital or the
Guarantor of the transactions contemplated by this Agreement or any
Pricing Agreement or the Indenture or the Guarantee, except such as have
been, or will have been prior to each Time of Delivery (as defined in
Section 4 hereof), obtained under the Act and the Trust Indenture Act, the
approval of the Commission under the Public Utility Holding Company Act of
1935, as amended (the "Holding Company Act") and the approvals of the
Connecticut Department of Public Utility Control (the "DPUC"), and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Preferred Securities by the
Underwriters; and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Preferred
Securities by the Underwriters;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which CL&P Capital, the Guarantor or
any of the Guarantor's subsidiaries is a party or of which any of their
properties is subject, which, if determined adversely to CL&P Capital, the
Guarantor or any of the Guarantor's subsidiaries, as the case may be,
would individually or in the aggregate have a material adverse effect on
(i) the current or future financial position, capital accounts or results
<PAGE>
of operations of CL&P Capital or (ii) the current or future consolidated
financial position, stockholders' equity or results of operations of the
Guarantor or any of its subsidiaries; and, to the best of CL&P Capital's
and the Guarantor's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) Neither the Guarantor nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws; CL&P Capital is
not in violation of its Certificate of Limited Partnership or the Limited
Partnership Agreement; and neither CL&P Capital, the Guarantor nor any of
the Guarantor's subsidiaries is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(n) The statements set forth in the Prospectus under the captions
"Description of Preferred Securities," "Description of Debt Securities,"
and "Description of Guarantee", insofar as they purport to constitute a
summary of the terms of the Preferred Securities, the Debt Securities and
the Guarantee, respectively, under the caption Taxation , and under the
caption "Underwriting", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate complete and
fair;
(o) Neither CL&P Capital nor the Guarantor is and, after giving
effect to the offering and sale of the Preferred Securities, neither will
be an investment company or an entity controlled by an investment
company , as such terms are defined in the Investment Company Act of 1940,
as amended (the Investment Company Act );
(p) The Subordinated Indenture dated as of , 1994 between
the Guarantor and , as trustee (the "Indenture") and the Debt
Securities to be issued thereunder, have been duly authorized; the
Indenture has been duly qualified under the Trust Indenture Act and, at
the Time of Delivery (as defined herein), will have been duly executed and
delivered and will constitute, and the Debt Securities, when duly executed
and authenticated in accordance with the Indenture and issued and
delivered under the circumstances provided in the Prospectus, as amended
or supplemented, will constitute, valid and legally binding obligations of
the Guarantor enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or
similar laws of general equity principles, and will conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus, as amended or supplemented;
(q) The Guarantee has been duly authorized and, when issued and
delivered by the Guarantor pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute a valid
and legally binding obligation of the Guarantor entitled to the benefits
provided by the Guarantee Agreement by the Guarantor dated ,
1994 (the "Guarantee Agreement"); and the Guarantee will conform to the
description thereof in the Prospectus;
(r) Neither CL&P Capital, the Guarantor, nor any of their affiliates
does business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
and
<PAGE>
(s) Arthur Andersen LLP, who have certified certain financial
statements of CL&P Capital and the Guarantor and the Guarantor's
subsidiaries, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(t) The Guarantor possesses such franchises, certificates, including
certificates of public convenience and necessity, authorities, permits and
easements issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it
and/or own, operate and maintain its properties as described in the
Prospectus, and it has not received notice of proceedings relating to the
revocation or modification of any such franchise, certificate, authority,
permit or easement which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Guarantor.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
of such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Certificates for the Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours prior notice to CL&P Capital, shall be delivered by or on
behalf of CL&P Capital to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
to the order of CL&P Capital in the funds specified in such Pricing Agreement,
all in the manner and at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
CL&P Capital may agree upon in writing, such time and date being herein called
the Time of Delivery .
5. Each of CL&P Capital and the Guarantor, jointly and severally, agrees
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission s close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating
to such Preferred Securities and prior to any Time of Delivery for such
Preferred Securities which shall be disapproved by the Representatives for
such Preferred Securities promptly after reasonable notice thereof; to
advise the Representatives promptly of any such amendment or supplement
after any Time of Delivery for such Preferred Securities and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by CL&P
Capital or the Guarantor with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Preferred Securities, and during such same period to advise the
<PAGE>
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
prospectus relating to the Preferred Securities, of the suspension of the
qualification of such Preferred Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any
prospectus relating to the Preferred Securities or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Preferred
Securities for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Shares, provided that in connection therewith neither CL&P Capital
nor the Guarantor shall be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Preferred Securities or the Debt Securities and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to file
such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Guarantor and the Guarantor's
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the date, after the Time of Delivery, on which the
distribution of the Designated Securities ceases, as determined by Goldman
Sachs & Co., and (ii) the date which is 90 days after the Time of Delivery
for such Designated Securities, not to offer, sell, contract to sell or
<PAGE>
otherwise dispose of, except as provided hereunder, any limited partner
interests of CL&P Capital or any securities of CL&P Capital or the
Guarantor that are substantially similar to the Preferred Securities or
the Debt Securities or any preferred securities of the Guarantor,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, any such
substantially similar securities without the prior written consent of the
Representatives;
(f) To use its best efforts to list, subject to notice of issuance,
the Preferred Securities and, upon issuance thereof to the holders of
Preferred Securities, the Debt Securities on the New York Stock Exchange
(the "Exchange );
(g) To furnish to the holders of the Preferred Securities as soon as
practicable after the end of each fiscal year an annual report (including
a balance sheet and statements of income, shareholder's equity and cash
flows of the Guarantor and its consolidated subsidiaries audited by
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with
the first such fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Guarantor and its subsidiaries for such quarter in reasonable detail;
(h) During a period of five years from the date of this Agreement to
furnish to you copies of all reports or other communications (financial
and other) furnished to holders of common stock of the Guarantor, and
deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Guarantor or CL&P Capital are listed; and (ii) such additional information
concerning the business and financial condition of Guarantor as the
Representatives may from time to time reasonably request;
(i) In the case of the Guarantor, to issue the Guarantee
concurrently with the issue and sale of the Preferred Securities as
contemplated herein; and
(j) To use the net proceeds received by it from the sale of the
Designated Securities pursuant to this Agreement in the manner specified
in the applicable Prospectus as amended or supplemented under the caption
"Use of Proceeds".
6. Each of CL&P Capital and the Guarantor jointly and severally
covenants and agrees with the several Underwriters that CL&P Capital and the
Guarantor will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of CL&P Capital's and the Guarantor's counsel and
accountants in connection with the registration of the Preferred Securities,
the Debt Securities and the Guarantee under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, the Indenture, the
Preferred Securities, the Debt Securities any Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Preferred
Securities; (iii) all expenses in connection with the qualification of the
Preferred Securities and the Guarantee for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
<PAGE>
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) any fees
charged by securities rating services for rating the Preferred Securities; (v)
any filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, any required reviews by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Preferred Securities; (vi) any fees and expenses in connection with listing the
Preferred Securities and the Debt Securities; (vii) the cost of preparing
certificates for the Preferred Securities; (viii) the cost and charges of any
transfer agent or registrar or dividend disbursing agent; (ix) the cost of
qualifying the Preferred Securities for delivery in book-entry only form; (x)
the fees and expenses of any Trustee and any agent of any Trustee and the fees
or disbursements of counsel for any Trustee in connection with the Indenture
and the Debt Securities; and (xi) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Preferred Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of CL&P Capital and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that CL&P Capital and
the Guarantor shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives
reasonable satisfaction;
(b) Winthrop, Stimson, Putnam & Roberts, counsel for the
Underwriters shall have furnished to the Representatives such opinion or
opinions, dated the Time of Delivery for such Designated Securities, with
respect to the matters covered in paragraphs (i), (ii), (iv), (viii),
(ix), (x) and (xi) of subsection (c) below as well as such other related
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Day, Berry & Howard, counsel for CL&P Capital and the Guarantor,
shall have furnished to the Representatives their written opinion or
opinions, dated the time of Delivery for such Designated Securities,
respectively, in form and substance satisfactory to the Representatives,
to the effect that:
(i) CL&P Capital has been duly formed and is validly existing
as a limited partnership in good standing under the Partnership Act;
CL&P Capital has no subsidiaries; CL&P Capital is a special purpose
<PAGE>
limited partnership as described in the Prospectus as amended or
supplemented and has conducted and will conduct no business other
than the transactions contemplated by this Agreement and described in
the Prospectus as amended or supplemented; CL&P Capital is not a
party to or bound by any agreement or instrument other than the
Limited Partnership Agreement; CL&P Capital has no liabilities or
obligations other than those arising out of the transactions
contemplated by this Agreement and described in the Prospectus as
amended or supplemented; CL&P Capital is not a party to or subject to
any action, suit or proceeding of any nature; the Guarantor has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Connecticut with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus as amended or supplemented;
and the Guarantor has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification;
(ii) The Guarantor has an authorized capitalization as set forth
in the Prospectus as amended or supplemented, and all of the issued
shares of capital stock of the Guarantor have been duly and validly
authorized and issued and are fully paid and non-assessable and are
owned directly or indirectly by NU, free and clear of all liens,
encumbrances, equities or claims; the Guarantor is the sole general
partner of CL&P Capital; the Class A Limited Partner is the sole
Class A Limited Partner of CL&P Capital; and the Class A Limited
Partner has been duly incorporated and is validly existing in good
standing as a corporation under the laws of the State of Connecticut,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented; and all of the issued general and limited partner
interests of CL&P Capital are owned by the Guarantor and the Class A
Limited Partner, respectively, and have been duly and validly
authorized and validly issued, free and clear of all liens,
encumbrances, equities or claims;
(iii) To the best of such counsel s knowledge and other than
as set forth in the Prospectus as amended or supplemented, there are
no legal or governmental proceedings pending to which CL&P Capital,
the Guarantor or any of the Guarantor's subsidiaries is a party or of
which any property of CL&P Capital, the Guarantor or any of the
Guarantor's subsidiaries is the subject which, if determined
adversely to CL&P Capital, the Guarantor or any of the Guarantor's
subsidiaries, would individually or in the aggregate have a material
adverse effect on (x) the current or future consolidated financial
position, capital accounts or results of operations of CL&P Capital
or (y) the current or future consolidated financial position,
stockholders equity or results of operations of the Guarantor and
its subsidiaries; and to the best of such counsel s knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by CL&P Capital and the Guarantor;
(v) The issue and sale of the Designated Preferred Securities
being delivered at such Time of Delivery and the compliance by CL&P
<PAGE>
Capital and the Guarantor with all of the provisions of this
Agreement, the Pricing Agreement, the Indenture and the Guarantee
with respect to the Designated Preferred Securities and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which CL&P Capital or the
Guarantor or any of the Guarantor's subsidiaries is a party or by
which CL&P Capital or the Guarantor is bound or to which any of the
property or assets of CL&P Capital or the Guarantor or any of the
Guarantor's subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Limited
Partnership or Limited Partnership Agreement of CL&P Capital or the
Certificate of Incorporation or By-laws of the Guarantor or any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over CL&P
Capital or the Guarantor or any of the Guarantor's subsidiaries or
any of their properties;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Designated Preferred
Securities being delivered at such Time of Delivery or the
consummation by CL&P Capital or the Guarantor of the transactions
contemplated by this Agreement or such Pricing Agreement, including
the issuance and delivery of the Guarantee and the Designated Debt
Securities, except such as have been obtained under the Act and the
Trust Indenture Act, the approval of the Commission under the Holding
Company Act and the approvals of the DPUC, and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Designated Preferred Securities
by the Underwriters;
(vii) Neither the Guarantor nor any of its subsidiaries is
in violation of its Certificate of Incorporation or By-laws; CL&P
Capital is not in violation of its Certificate of Limited Partnership
or the Limited Partnership Agreement; and neither CL&P Capital, the
Guarantor nor any of the Guarantor's subsidiaries is in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound;
(viii) The statements set forth in the Prospectus under the
captions "Description of Preferred Securities," "Description of Debt
Securities," and "Description of Guarantee", insofar as they purport
to constitute a summary of the terms of the Preferred Securities, the
Guarantee and the Debt Securities, under the caption Taxation , and
under the caption "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(ix) The Preferred Securities have been duly and validly
authorized and are validly issued and, subject to the qualifications
set forth in Section 7(e)(iv) hereof, are fully paid and non-
assessable limited partner interests in CL&P Capital; and the
<PAGE>
Designated Preferred Securities conform to the description thereof
contained in the Prospectus as amended or supplemented;
(x) The Indenture and the Debt Securities have been duly
authorized; the Indenture has been duly qualified under the Trust
Indenture Act; the Indenture has been duly executed and delivered and
constitutes, and the Debt Securities have been duly executed and
authenticated in accordance with the Indenture and delivered under
the circumstances provided in the Prospectus as amended or
supplemented and constitute, the valid and legally binding
obligations of the Guarantor enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium or similar laws of general equity
principles; and the Indenture and the Debt Securities conform to the
descriptions thereof contained in the Prospectus as amended or
supplemented;
(xi) The Guarantee has been duly authorized, executed,
authenticated, issued and delivered by the Guarantor and constitutes
a valid and legally binding obligation of the Guarantor entitled to
the benefits provided by the Guarantee Agreement; and the Guarantee
conforms to the description thereof contained in the Prospectus as
amended or supplemented;
(xii) Neither CL&P Capital nor the Guarantor is and, after
giving effect to the offering and sale of the Designated Securities,
neither will be an investment company or an entity controlled by
an investment company , as such terms are defined in the Investment
Company Act;
(xiii) The Guarantor possesses such franchises, certificates,
including certificates of public convenience and necessity,
authorities, permits and easements issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it and/or own, operate and maintain its
properties as described in the Prospectus, and, to the knowledge of
such counsel, it has not received notice of proceedings relating to
the revocation or modification of any such franchise, certificate,
authority, permit or easement which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Guarantor;
(xiv) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
or, in the case of other documents which were filed under the Act or
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order
<PAGE>
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading;
(xv) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made
by CL&P Capital or the Guarantor prior to such Time of Delivery
(other than the financial statements and related schedules therein,
as to which such counsel need express no opinion), comply as to form
in all material respects with the requirements of the Act and the
rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection (viii) of
this Section 7(c), they have no reason to believe that, as of its
effective date, the Registration Statement or any further amendment
thereto made by CL&P Capital or the Guarantor prior to such Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by CL&P Capital or the Guarantor prior to
such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented
or any further amendment or supplement thereto made by CL&P Capital
or the Guarantor prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of any amendment
to the Registration Statement required to be filed or any contracts
or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required
to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by
reference or described as required; and
(xvi) The Limited Partnership Agreement has been duly
authorized, executed and delivered by the Guarantor and constitutes a
valid and legally binding obligation of the Guarantor, in its
capacity as general partner of CL&P Capital, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
[In rendering their opinion, such counsel may rely, as to matters of
Delaware Law relating to CL&P Capital, the Preferred Securities and
the Limited Partnership Agreement, upon the opinion of
_________________________, delivered pursuant to subsection (e)
hereof;]
<PAGE>
(d) Day, Berry & Howard, special tax counsel for CL&P Capital and the
Guarantor, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that such
counsel confirms its opinion as set forth under "Taxation" in the Prospectus as
amended and supplemented;
(e) _________________________, special Delaware counsel for CL&P Capital
and the Guarantor, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) CL&P Capital has been duly formed and is validly existing in
good standing as a limited partnership under the Partnership Act;
(ii) Under the Limited Partnership Agreement and the Partnership Act,
CL&P Capital has all necessary partnership power and authority to own its
properties and conduct its business, all as described in the Prospectus as
amended or supplemented;
(iii) The general partner and limited partner interests in CL&P
Capital issued to the Guarantor and the Class A Limited Partner,
respectively, have been duly and validly authorized and are validly
issued;
(iv) The Preferred Securities issued to the limited partners of CL&P
Capital, who hold the Preferred Securities (the "Preferred Security
Holders") have been duly and validly authorized and are validly issued
and, subject to the qualifications set forth herein, are fully paid and
nonassessable limited partner interests in CL&P Capital, as to which,
assuming that the Preferred Security Holders, as limited partners of CL&P
Capital, do not participate in the control of the business of CL&P
Capital, the Preferred Security Holders, as limited partners of CL&P
Capital, will have no liability in excess of their obligations to make
payments provided for in the Limited Partnership Agreement and their share
of CL&P Capital's assets and undistributed profits (subject to the
obligation of a Preferred Security Holder to repay any funds wrongfully
distributed to it);
(v) There are no provisions in the Limited Partnership Agreement the
inclusion of which, subject to the terms and conditions therein, or,
assuming that the Preferred Security Holders, as limited partners of CL&P
Capital, take no action other than actions permitted by the Limited
Partnership Agreement, the exercise of which, in accordance with the terms
and conditions therein, would cause the Preferred Security Holders, as
limited partners of CL&P Capital, to be deemed to be participating in the
control of the business of CL&P Capital;
(vi) The Limited Partnership Agreement has been duly authorized,
executed and delivered by the Guarantor constitutes a legal, valid and
binding agreement of the Guarantor, and is enforceable against the
Guarantor, in its capacity as general partner of CL&P Capital, in
accordance with its terms subject to bankruptcy, insolvency, moratorium,
fraudulent conveyance, receivership, reorganization, liquidation and other
similar laws relating to or affecting the rights and remedies of creditors
generally and to principles of equity (regardless of whether considered
and applied in a proceeding in equity or at law);
<PAGE>
(vii) Under the Limited Partnership Agreement and the Partnership
Act, CL&P Capital has all necessary partnership power and authority to
execute and deliver, and to perform its obligations under, this Agreement;
(viii) Under the Limited Partnership Agreement and the Partnership
Act, the execution and delivery by CL&P Capital of this Agreement, and the
performance by CL&P Capital of its obligations hereunder, have been duly
authorized by all necessary partnership action on the part of CL&P
Capital;
(ix) The issuance and sale by CL&P Capital of the Preferred
Securities pursuant to this Agreement and the execution, delivery and
performance by CL&P Capital of this Agreement will not violate (i) any
Delaware statute, rule or regulation, or (ii) the Certificate of Limited
Partnership of CL&P Capital or the Limited Partnership Agreement;
(x) No consent, approval, authorization, order, registration or
qualification of or with any Delaware court or Delaware governmental
agency or body is required solely as a result of the issuance and sale by
CL&P Capital of the Preferred Securities pursuant to this Agreement, the
execution, delivery and performance by CL&P Capital of this Agreement or
the consummation of the transactions contemplated in this Agreement;
(xi) Such counsel has reviewed the statements in the Prospectus as
amended or supplemented under the caption "CL&P Capital" and, insofar as
it contains statements of Delaware law, such statements are fairly
presented; and
(xii) Assuming that CL&P Capital is treated as a partnership for
Federal income tax purposes, and assuming that CL&P Capital derives no
income from or connected with sources within the State of Delaware and has
no assets, activities (other than the maintenance of a registered office
and registered agent in the State of Delaware and the filing of documents
with the Delaware Secretary of State) or employees in the State of
Delaware, the Preferred Security Holders (other than those Preferred
Security Holders who reside or are domiciled in the State of Delaware),
will have no liability for Delaware income taxes solely as a result of
their participation in CL&P Capital, and CL&P Capital will not be liable
for any Delaware income tax.
(f) On the date of the Pricing Agreement for such Designated Securities
at a time prior to the execution of the Pricing Agreement with respect to the
Designated Securities and at each Time of Delivery for such Designated
Securities, Arthur Andersen LLP, the independent accountants of CL&P Capital
and the Guarantor who have certified the financial statements of CL&P Capital
and the Guarantor and the Guarantor's subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the Commission
containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the Representatives;
(g) (i) Neither CL&P Capital, the Guarantor nor any of the Guarantor's
subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
<PAGE>
Securities any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, and (ii) since the
respective dates as of which information is given in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall not have been any change in the capital accounts or
long-term debt of CL&P Capital or capital stock or long-term debt of the
Guarantor or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting (x) the general affairs,
management, financial position, capital accounts or results of operations of
CL&P Capital or (y) the general affairs, management, financial position,
stockholders equity or results of operations of the Guarantor and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
Preferred Securities, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Representatives so material and adverse
as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Designated Preferred Securities on the terms and in the
manner contemplated in the Prospectus as amended relating to the Designated
Preferred Securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Preferred Securities (i) no downgrading shall have occurred in the
rating accorded any Preferred Securities or any of the Guarantor s debt
securities or preferred stock by any nationally recognized statistical rating
organization , as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any Preferred Securities or any of the Guarantor s
debt securities or preferred stock;
(i) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in
CL&P Capital s or the Guarantor s securities on the New York Stock Exchange;
(iii) a general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(j) The Preferred Securities at the Time of Delivery shall have been duly
listed, subject to notice of issuance, on the New York Stock Exchange;
(k) CL&P Capital and the Guarantor shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery for the Designated
Securities certificates of officers of CL&P Capital and the Guarantor,
respectively, satisfactory to the Representatives as to the accuracy of the
respective representations and warranties of CL&P Capital and the Guarantor
herein at and as of such Time of Delivery, as to the performance by CL&P
Capital and the Guarantor of all of its respective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth in
<PAGE>
subsections (a) and (e) of this Section and as to such other matters as the
Representatives may reasonably request;
(l) The Limited Partnership Agreement, the Guarantee and the Indenture
shall have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives; and
[(m) A Special Event (as defined in the Prospectus as amended or
supplemented) shall not have occurred and be continuing.]
8. (a) CL&P Capital and the Guarantor, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither CL&P Capital nor the Guarantor shall
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Preferred Securities, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to CL&P Capital by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Preferred
Securities.
(b) Each Underwriter will indemnify and hold harmless CL&P Capital and
the Guarantor against any losses, claims, damages or liabilities to which CL&P
Capital may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Preferred Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Preferred Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to CL&P
Capital and the Guarantor by such Underwriter through the Representatives
expressly for use therein; and will reimburse CL&P Capital and the Guarantor
for any legal or other expenses reasonably incurred by CL&P Capital in
connection with investigating or defending any such action or claim as such
expenses are incurred.
<PAGE>
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify such
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by CL&P Capital and the Guarantor on the one hand and the Underwriters
of the Designated Securities on the other from the offering of the Designated
Securities to which such 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 or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such 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 CL&P Capital and the Guarantor
on the one hand and the Underwriters of the Designated Securities on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
CL&P Capital and the Guarantor on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by CL&P Capital and the
Guarantor bear to the total underwriting discounts and commissions received by
such Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by CL&P Capital and the Guarantor on the one
hand or such Underwriters on the other and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
<PAGE>
statement or omission. CL&P Capital, the Guarantor and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) 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 such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged 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 such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Designated Securities and not joint.
(e) The obligations of CL&P Capital under this Section 8 shall be in
addition to any liability which CL&P Capital and the Guarantor may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
CL&P Capital and the Guarantor and to each person, if any, who controls CL&P
Capital and the Guarantor within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, as the case may be,
then CL&P Capital shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
CL&P Capital that they have so arranged for the purchase of such Designated
Securities, or CL&P Capital notifies the Representatives that it has so
arranged for the purchase of such Designated Securities, the Representatives or
CL&P Capital shall have the right to postpone a Time of Delivery for such
Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and CL&P Capital agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
Underwriter as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities, as the case may be, of a defaulting Underwriter or
<PAGE>
Underwriters by the Representatives and CL&P Capital as provided in subsection
(a) above, the aggregate amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate amount of the
Designated Securities to be purchased at the Time of Delivery, then CL&P
Capital shall have the right to require each non-defaulting Underwriter to
purchase the amount of Designated Securities which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Securities
and, in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the Designated
Securities, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and CL&P Capital as provided in subsection (a) above, the
aggregate amount of Designated Securities which remains unpurchased exceeds
one-eleventh of the aggregate amount of Designated Securities to be purchased
at the Time of Delivery, as referred to in subsection (b) above, or if CL&P
Capital shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase the Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Designated Securities shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or CL&P Capital or the Guarantor, except
for the expenses to be borne by CL&P Capital and the Guarantor and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of CL&P Capital or the Guarantor and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or CL&P Capital or the Guarantor, or any officer or director
or controlling person of CL&P Capital or the Guarantor, and shall survive
delivery of and payment for any Designated Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither CL&P Capital nor the Guarantor shall then be under any
liability to any Underwriter with respect to the Designated Securities with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Securities are not delivered by or on behalf of CL&P Capital or the Guarantor
as provided herein, CL&P Capital will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but CL&P Capital or the Guarantor shall
then be under no further liability to any Underwriter with respect to such
Designated Securities except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
<PAGE>
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to CL&P Capital or the Guarantor shall be
delivered or sent by mail, telex or facsimile transmission to the address of
CL&P Capital or the Guarantor, respectively set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to CL&P Capital and the Guarantor by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, CL&P Capital, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of CL&P Capital, the Guarantor and each person who controls CL&P
Capital or the Guarantor or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Preferred Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term business day shall mean any day when the Commission s office
in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each
of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us one for CL&P Capital and one for each of the Representatives plus
one for each counsel counterparts hereof.
Very truly yours,
CL&P CAPITAL, L. P.
By: The Connecticut Light and Power Company
its General Partner
By:
Name:
Title:
THE CONNECTICUT LIGHT AND POWER COMPANY
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
[Name(s) of Co-Representative(s),(3)]
As Representatives of the several
Underwriters named in Schedule I hereto,
[c/o Goldman, Sachs & Co.,(3)]
85 Broad Street,
New York, New York 10004.
, 19
Ladies and Gentlemen:
CL&P Capital, L.P., a Delaware limited partnership ( CL&P Capital ), as
issuer, and The Connecticut Light and Power Company, a Connecticut corporation,
as guarantor (the "Guarantor"), each proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated ,
1994 (the Underwriting Agreement ), between CL&P Capital and the Guarantor on
the one hand and Goldman, Sachs & Co. [and (names of Co-Representatives named
therein)] on the other hand], to issue and sell to the Underwriters named in
Schedule I hereto (the Underwriters ) the Preferred Securities specified in
Schedule II hereto (the Designated Preferred Securities ). The Designated
Preferred Securities will be guaranteed by the Guarantor to the extent set
forth in this Agreement with respect to such Designated Preferred Securities
(the Guarantee ). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Preferred Securities
which are the subject of this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Preferred Securities pursuant to Section 12 of the Underwriting Agreement and
the address of the Representatives referred to in such Section 12 are set forth
in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Preferred
Securities, in the form heretofore delivered to you is now proposed to be filed
with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, CL&P Capital agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from CL&P Capital, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the amount of Preferred Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
<PAGE>
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us one each for CL&P Capital and the Guarantor and one for each of
the Representatives plus one for each counsel counterparts hereof, and upon
acc
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.6
WMECO CAPITAL, L.P.
Preferred Securities
representing limited partner interests
guaranteed to the extent described in
the applicable Pricing Agreement
by Western Massachusetts Electric Company
-------------------------------------------------
Underwriting Agreement
__________, 1994
[Goldman, Sachs & Co.
[[Name(s) of Co-Representative(s)]
c/o Goldman, Sachs & Co.]
85 Broad Street,
New York, New York 10004.]
[To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.]
Ladies and Gentlemen:
From time to time WMECO Capital, L.P. ("WMECO Capital"), a limited
partnership formed under the laws of the State of Delaware, as issuer, and
Western Massachusetts Electric Company, a Massachusetts corporation, as
guarantor (the "Guarantor"), each proposes to enter into one or more Pricing
Agreements (each a Pricing Agreement ) in the form of Annex I hereto, with
such additions and deletions as the parties thereto may determine, and, subject
to the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the Underwriters with respect to such Pricing Agreement and the
securities specified therein) certain preferred securities representing limited
partner interests in WMECO Capital (liquidation preference $25 per preferred
partner interest) (the "Preferred Securities") specified in Schedule II to such
Pricing Agreement (with respect to such Pricing Agreement, the Designated
Preferred Securities ), guaranteed by the Guarantor as to the payment of
distributions, to the extent WMECO Capital has cash on hand sufficient to
permit such payments and funds legally available therefor, and as to payments
on liquidation or redemption to the extent set forth in the Prospectus (as
defined below) with respect to such Preferred Securities (the "Guarantee").
The Designated Preferred Securities and the Guarantee are herein collectively
referred to as the "Designated Securities".
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Designated Securities, for whom the firms
designated as representatives of the Underwriters of such Designated Securities
in the Pricing Agreement relating thereto will act as representatives (the
<PAGE>
Representatives ). The term Representatives also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of WMECO Capital to sell any
of the Preferred Securities or as an obligation of any of the Underwriters to
purchase any of the Preferred Securities. The obligation of WMECO Capital to
issue and sell any of the Preferred Securities and the obligation of any of the
Underwriters to purchase any of the Preferred Securities shall be evidenced by
the Pricing Agreement with respect to the Designated Securities specified
therein. Each Pricing Agreement shall specify the aggregate amount of
Designated Securities, the initial public offering price of such Designated
Securities or the manner of determining such price, the terms of the Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters, the amount of such
Designated Securities to be purchased by each Underwriter and the commission,
if any, payable to the Underwriters with respect thereto and shall set forth
the date, time and manner of delivery of such Designated Securities, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect
thereto) the terms of such Designated Securities. A Pricing Agreement shall be
in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Each of WMECO Capital and the Guarantor, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-_______) in
respect of the Preferred Securities, the Guarantee and the [Deferrable
Interest] Subordinated Debentures of the Guarantor (the "Debt Securities")
has been filed with the Exchange Commission (the Commission ); such
registration statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus included therein, to
the Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; no other document with respect
to such registration statement or document incorporated by reference
therein has heretofore been filed, or transmitted for filing, with the
Commission (other than prospectuses filed pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Securities Act of 1933,
as amended (the Act ) each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter called a
Preliminary Prospectus ; the various parts of such registration
statement, including all exhibits thereto and the documents incorporated
by reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective but
excluding Form T-1, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the Registration Statement ; the prospectus relating to the
Preferred Securities, the Guarantee and the Debt Securities, in the form
in which it has most recently been filed, or transmitted for filing, with
the Commission on or prior to the date of this Agreement, is hereinafter
<PAGE>
called the Prospectus ; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable
form under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the Exchange Act ), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of
WMECO Capital and the Guarantor filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to the Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to WMECO Capital by an
Underwriter of Designated Preferred Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Preferred Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the Trust
Indenture Act ) and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to WMECO
Capital by an Underwriter of Designated Preferred Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Preferred Securities;
<PAGE>
(d) Neither WMECO Capital, the Guarantor nor any of the Guarantor's
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or long-term debt of the Guarantor or any of its subsidiaries or any
change in the capital accounts or long-term debt of WMECO Capital or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting (i) the general affairs,
management, financial position, stockholders equity or results of
operations of the Guarantor and its subsidiaries or (ii) the general
affairs, management, financial position, capital accounts or results of
operations of WMECO Capital, otherwise than as set forth or contemplated
in the Prospectus;
(e) WMECO Capital has been duly formed and is validly existing as a
limited partnership in good standing under the Delaware Revised Uniform
Limited Partnership Act, as amended (the "Partnership Act"); WMECO Capital
has no subsidiaries; WMECO Capital is a special purpose limited
partnership as described in the Prospectus and has conducted and will
conduct no business other than the transactions contemplated by this
Agreement and described in the Prospectus; WMECO Capital is not a party to
or bound by any agreement or instrument other than its limited partnership
agreement (in the form filed as an exhibit to the Registration Statement,
the "Limited Partnership Agreement"); WMECO Capital has no liabilities or
obligations other than those arising out of the transactions contemplated
by this Agreement and described in the Prospectus; and WMECO Capital is
not a party to or subject to any action, suit or proceeding of any nature;
(f) The Guarantor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Massachusetts, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; the
Guarantor has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification;
(g) The Guarantor has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Guarantor have been duly and validly authorized and issued and are fully
paid and non-assessable and are owned directly or indirectly by Northeast
Utilities ("NU"), free and clear of all liens, encumbrances, equities or
claims;
(h) The Preferred Securities have been duly and validly authorized,
and, when the Designated Securities are issued and delivered pursuant to
this Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will be duly and validly issued and
fully paid and non-assessable; the Preferred Securities conform to the
description thereof contained in the Registration Statement and the
Designated Securities will conform to the description thereof contained in
the Prospectus as amended or supplemented with respect to such Designated
Securities;
<PAGE>
(i) The Limited Partnership Agreement has been duly authorized by
the Guarantor and constitutes a valid and legally binding obligation of
the Guarantor, in its capacity as general partner of WMECO Capital,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(j) The Guarantor is the sole general partner of WMECO Capital;
Northeast Utilities Service Company, a Connecticut corporation, is the
sole Class A Limited Partner of WMECO Capital (the "Class A Limited
Partner"); and the Class A Limited Partner has been duly incorporated and
is validly existing in good standing as a corporation under the laws of
the State of Connecticut, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Prospectus; and all of the issued general and limited partner interests of
WMECO Capital are owned by the Guarantor and the Class A Limited Partner,
respectively, and have been duly and validly authorized and validly
issued, free and clear of all liens, encumbrances, equities or claims;
(k) The issue and sale of the Preferred Securities and the
compliance by WMECO Capital and the Guarantor with all of the provisions
of this Agreement, any Pricing Agreement, the Indenture and the Guarantee,
and the consummation of the transactions contemplated herein and therein
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which WMECO Capital or the Guarantor is a party or by which WMECO
Capital and the Guarantor is bound or to which any of the property or
assets of WMECO Capital or the Guarantor is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Guarantor or the Certificate of Limited
Partnership of WMECO Capital or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the WMECO Capital or the Guarantor or any of its properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Preferred Securities or the consummation by the
WMECO Capital or the Guarantor of the transactions contemplated by this
Agreement or any Pricing Agreement or the Indenture or the Guarantee,
except such as have been, or will have been prior to each Time of Delivery
(as defined in Section 4 hereof), obtained under the Act and the Trust
Indenture Act, the approval of the Commission under the Public Utility
Holding Company Act of 1935, as amended (the "Holding Company Act"), the
approvals of the Massachusetts Department of Public Utilities (the "DPU"),
and the approvals of the Connecticut Department of Public Utility Control
(the "DPUC"), and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Preferred
Securities by the Underwriters; and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Preferred Securities by the Underwriters;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which WMECO Capital, the Guarantor or
any of the Guarantor's subsidiaries is a party or of which any of their
properties is subject, which, if determined adversely to WMECO Capital,
the Guarantor or any of the Guarantor's subsidiaries, as the case may be,
would individually or in the aggregate have a material adverse effect on
<PAGE>
(i) the current or future financial position, capital accounts or results
of operations of WMECO Capital or (ii) the current or future consolidated
financial position, stockholders' equity or results of operations of the
Guarantor or any of its subsidiaries; and, to the best of WMECO Capital's
and the Guarantor's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) Neither the Guarantor nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws; WMECO Capital is
not in violation of its Certificate of Limited Partnership or the Limited
Partnership Agreement; and neither WMECO Capital, the Guarantor nor any of
the Guarantor's subsidiaries is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(n) The statements set forth in the Prospectus under the captions
"Description of Preferred Securities," "Description of Debt Securities,"
and "Description of Guarantee", insofar as they purport to constitute a
summary of the terms of the Preferred Securities, the Debt Securities and
the Guarantee, respectively, under the caption Taxation , and under the
caption "Underwriting", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate complete and
fair;
(o) Neither WMECO Capital nor the Guarantor is and, after giving
effect to the offering and sale of the Preferred Securities, neither will
be an investment company or an entity controlled by an investment
company , as such terms are defined in the Investment Company Act of 1940,
as amended (the Investment Company Act );
(p) The Subordinated Indenture dated as of , 1994 between
the Guarantor and , as trustee (the "Indenture") and the Debt
Securities to be issued thereunder, have been duly authorized; the
Indenture has been duly qualified under the Trust Indenture Act and, at
the Time of Delivery (as defined herein), will have been duly executed and
delivered and will constitute, and the Debt Securities, when duly executed
and authenticated in accordance with the Indenture and issued and
delivered under the circumstances provided in the Prospectus, as amended
or supplemented, will constitute, valid and legally binding obligations of
the Guarantor enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or
similar laws of general equity principles, and will conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus, as amended or supplemented;
(q) The Guarantee has been duly authorized and, when issued and
delivered by the Guarantor pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute a valid
and legally binding obligation of the Guarantor entitled to the benefits
provided by the Guarantee Agreement by the Guarantor dated ,
1994 (the "Guarantee Agreement"); and the Guarantee will conform to the
description thereof in the Prospectus;
(r) Neither WMECO Capital, the Guarantor, nor any of their
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes; and
<PAGE>
(s) Arthur Andersen LLP, who have certified certain financial
statements of WMECO Capital and the Guarantor and the Guarantor's
subsidiaries, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(t) The Guarantor possesses such franchises, certificates, including
certificates of public convenience and necessity, authorities, permits and
easements issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it
and/or own, operate and maintain its properties as described in the
Prospectus, and it has not received notice of proceedings relating to the
revocation or modification of any such franchise, certificate, authority,
permit or easement which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Guarantor.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
of such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Certificates for the Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours prior notice to WMECO Capital, shall be delivered by or on
behalf of WMECO Capital to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
to the order of WMECO Capital in the funds specified in such Pricing Agreement,
all in the manner and at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
WMECO Capital may agree upon in writing, such time and date being herein called
the Time of Delivery .
5. Each of WMECO Capital and the Guarantor, jointly and severally,
agrees with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission s close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating
to such Preferred Securities and prior to any Time of Delivery for such
Preferred Securities which shall be disapproved by the Representatives for
such Preferred Securities promptly after reasonable notice thereof; to
advise the Representatives promptly of any such amendment or supplement
after any Time of Delivery for such Preferred Securities and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by WMECO
Capital or the Guarantor with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Preferred Securities, and during such same period to advise the
<PAGE>
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
prospectus relating to the Preferred Securities, of the suspension of the
qualification of such Preferred Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any
prospectus relating to the Preferred Securities or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Preferred
Securities for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Shares, provided that in connection therewith neither WMECO
Capital nor the Guarantor shall be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Preferred Securities or the Debt Securities and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to file
such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Guarantor and the Guarantor's
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the date, after the Time of Delivery, on which the
distribution of the Designated Securities ceases, as determined by Goldman
Sachs & Co., and (ii) the date which is 90 days after the Time of Delivery
<PAGE>
for such Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any limited partner
interests of WMECO Capital or any securities of WMECO Capital or the
Guarantor that are substantially similar to the Preferred Securities or
the Debt Securities or any preferred securities of the Guarantor,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, any such
substantially similar securities without the prior written consent of the
Representatives;
(f) To use its best efforts to list, subject to notice of issuance,
the Preferred Securities and, upon issuance thereof to the holders of
Preferred Securities, the Debt Securities on the New York Stock Exchange
(the "Exchange );
(g) To furnish to the holders of the Preferred Securities as soon as
practicable after the end of each fiscal year an annual report (including
a balance sheet and statements of income, shareholder's equity and cash
flows of the Guarantor and its consolidated subsidiaries audited by
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with
the first such fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Guarantor and its subsidiaries for such quarter in reasonable detail;
(h) During a period of five years from the date of this Agreement to
furnish to you copies of all reports or other communications (financial
and other) furnished to holders of common stock of the Guarantor, and
deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Guarantor or WMECO Capital are listed; and (ii) such additional
information concerning the business and financial condition of Guarantor
as the Representatives may from time to time reasonably request;
(i) In the case of the Guarantor, to issue the Guarantee
concurrently with the issue and sale of the Preferred Securities as
contemplated herein; and
(j) To use the net proceeds received by it from the sale of the
Designated Securities pursuant to this Agreement in the manner specified
in the applicable Prospectus as amended or supplemented under the caption
"Use of Proceeds".
6. Each of WMECO Capital and the Guarantor jointly and severally
covenants and agrees with the several Underwriters that WMECO Capital and the
Guarantor will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of WMECO Capital's and the Guarantor's counsel and
accountants in connection with the registration of the Preferred Securities,
the Debt Securities and the Guarantee under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, the Indenture, the
Preferred Securities, the Debt Securities any Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Preferred
Securities; (iii) all expenses in connection with the qualification of the
Preferred Securities and the Guarantee for offering and sale under state
<PAGE>
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) any fees
charged by securities rating services for rating the Preferred Securities; (v)
any filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, any required reviews by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Preferred Securities; (vi) any fees and expenses in connection with listing the
Preferred Securities and the Debt Securities; (vii) the cost of preparing
certificates for the Preferred Securities; (viii) the cost and charges of any
transfer agent or registrar or dividend disbursing agent; (ix) the cost of
qualifying the Preferred Securities for delivery in book-entry only form; (x)
the fees and expenses of any Trustee and any agent of any Trustee and the fees
or disbursements of counsel for any Trustee in connection with the Indenture
and the Debt Securities; and (xi) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Preferred Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of WMECO Capital and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that WMECO Capital and
the Guarantor shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives
reasonable satisfaction;
(b) Winthrop, Stimson, Putnam & Roberts, counsel for the
Underwriters shall have furnished to the Representatives such opinion or
opinions, dated the Time of Delivery for such Designated Securities, with
respect to the matters covered in paragraphs (i), (ii), (iv), (viii),
(ix), (x) and (xi) of subsection (c) below as well as such other related
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Day, Berry & Howard, counsel for WMECO Capital and the
Guarantor, shall have furnished to the Representatives their written
opinion or opinions, dated the time of Delivery for such Designated
Securities, respectively, in form and substance satisfactory to the
Representatives, to the effect that:
(i) WMECO Capital has been duly formed and is validly existing
as a limited partnership in good standing under the Partnership Act;
<PAGE>
WMECO Capital has no subsidiaries; WMECO Capital is a special purpose
limited partnership as described in the Prospectus as amended or
supplemented and has conducted and will conduct no business other
than the transactions contemplated by this Agreement and described in
the Prospectus as amended or supplemented; WMECO Capital is not a
party to or bound by any agreement or instrument other than the
Limited Partnership Agreement; WMECO Capital has no liabilities or
obligations other than those arising out of the transactions
contemplated by this Agreement and described in the Prospectus as
amended or supplemented; WMECO Capital is not a party to or subject
to any action, suit or proceeding of any nature; the Guarantor has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the Commonwealth of Massachusetts
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented; and the Guarantor has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification;
(ii) The Guarantor has an authorized capitalization as set forth
in the Prospectus as amended or supplemented, and all of the issued
shares of capital stock of the Guarantor have been duly and validly
authorized and issued and are fully paid and non-assessable and are
owned directly or indirectly by NU, free and clear of all liens,
encumbrances, equities or claims; the Guarantor is the sole general
partner of WMECO Capital; the Class A Limited Partner is the sole
Class A Limited Partner of WMECO Capital; and the Class A Limited
Partner has been duly incorporated and is validly existing in good
standing as a corporation under the laws of the State of Connecticut,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented; and all of the issued general and limited partner
interests of WMECO Capital are owned by the Guarantor and the Class A
Limited Partner, respectively, and have been duly and validly
authorized and validly issued, free and clear of all liens,
encumbrances, equities or claims;
(iii) To the best of such counsel s knowledge and other than
as set forth in the Prospectus as amended or supplemented, there are
no legal or governmental proceedings pending to which WMECO Capital,
the Guarantor or any of the Guarantor's subsidiaries is a party or of
which any property of WMECO Capital, the Guarantor or any of the
Guarantor's subsidiaries is the subject which, if determined
adversely to WMECO Capital, the Guarantor or any of the Guarantor's
subsidiaries, would individually or in the aggregate have a material
adverse effect on (x) the current or future consolidated financial
position, capital accounts or results of operations of WMECO Capital
or (y) the current or future consolidated financial position,
stockholders equity or results of operations of the Guarantor and
its subsidiaries; and to the best of such counsel s knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by WMECO Capital and the Guarantor;
<PAGE>
(v) The issue and sale of the Designated Preferred Securities
being delivered at such Time of Delivery and the compliance by WMECO
Capital and the Guarantor with all of the provisions of this
Agreement, the Pricing Agreement, the Indenture and the Guarantee
with respect to the Designated Preferred Securities and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which WMECO Capital or the
Guarantor or any of the Guarantor's subsidiaries is a party or by
which WMECO Capital or the Guarantor is bound or to which any of the
property or assets of WMECO Capital or the Guarantor or any of the
Guarantor's subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Limited
Partnership or Limited Partnership Agreement of WMECO Capital or the
Certificate of Incorporation or By-laws of the Guarantor or any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over WMECO
Capital or the Guarantor or any of the Guarantor's subsidiaries or
any of their properties;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Designated Preferred
Securities being delivered at such Time of Delivery or the
consummation by WMECO Capital or the Guarantor of the transactions
contemplated by this Agreement or such Pricing Agreement, including
the issuance and delivery of the Guarantee and the Designated Debt
Securities, except such as have been obtained under the Act and the
Trust Indenture Act, the approval of the Commission under the Holding
Company Act, the approvals of the DPU, and the approvals of the DPUC,
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Designated Preferred Securities by the Underwriters;
(vii) Neither the Guarantor nor any of its subsidiaries is
in violation of its Certificate of Incorporation or By-laws; WMECO
Capital is not in violation of its Certificate of Limited Partnership
or the Limited Partnership Agreement; and neither WMECO Capital, the
Guarantor nor any of the Guarantor's subsidiaries is in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound;
(viii) The statements set forth in the Prospectus under the
captions "Description of Preferred Securities," "Description of Debt
Securities," and "Description of Guarantee", insofar as they purport
to constitute a summary of the terms of the Preferred Securities, the
Guarantee and the Debt Securities, under the caption Taxation , and
under the caption "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(ix) The Preferred Securities have been duly and validly
authorized and are validly issued and, subject to the qualifications
set forth in Section 7(e)(iv) hereof, are fully paid and non-
<PAGE>
assessable limited partner interests in WMECO Capital; and the
Designated Preferred Securities conform to the description thereof
contained in the Prospectus as amended or supplemented;
(x) The Indenture and the Debt Securities have been duly
authorized; the Indenture has been duly qualified under the Trust
Indenture Act; the Indenture has been duly executed and delivered and
constitutes, and the Debt Securities have been duly executed and
authenticated in accordance with the Indenture and delivered under
the circumstances provided in the Prospectus as amended or
supplemented and constitute, the valid and legally binding
obligations of the Guarantor enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium or similar laws of general equity
principles; and the Indenture and the Debt Securities conform to the
descriptions thereof contained in the Prospectus as amended or
supplemented;
(xi) The Guarantee has been duly authorized, executed,
authenticated, issued and delivered by the Guarantor and constitutes
a valid and legally binding obligation of the Guarantor entitled to
the benefits provided by the Guarantee Agreement; and the Guarantee
conforms to the description thereof contained in the Prospectus as
amended or supplemented;
(xii) Neither WMECO Capital nor the Guarantor is and, after
giving effect to the offering and sale of the Designated Securities,
neither will be an investment company or an entity controlled by
an investment company , as such terms are defined in the Investment
Company Act;
(xiii) The Guarantor possesses such franchises, certificates,
including certificates of public convenience and necessity,
authorities, permits and easements issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it and/or own, operate and maintain its
properties as described in the Prospectus, and, to the knowledge of
such counsel, it has not received notice of proceedings relating to
the revocation or modification of any such franchise, certificate,
authority, permit or easement which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Guarantor;
(xiv) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
or, in the case of other documents which were filed under the Act or
the Exchange Act with the Commission, an untrue statement of a
<PAGE>
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading;
(xv) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made
by WMECO Capital or the Guarantor prior to such Time of Delivery
(other than the financial statements and related schedules therein,
as to which such counsel need express no opinion), comply as to form
in all material respects with the requirements of the Act and the
rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection (viii) of
this Section 7(c), they have no reason to believe that, as of its
effective date, the Registration Statement or any further amendment
thereto made by WMECO Capital or the Guarantor prior to such Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by WMECO Capital or the Guarantor prior to
such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented
or any further amendment or supplement thereto made by WMECO Capital
or the Guarantor prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of any amendment
to the Registration Statement required to be filed or any contracts
or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required
to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by
reference or described as required; and
(xvi) The Limited Partnership Agreement has been duly
authorized, executed and delivered by the Guarantor and constitutes a
valid and legally binding obligation of the Guarantor, in its
capacity as general partner of WMECO Capital, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
[In rendering their opinion, such counsel may rely, as to matters of
Delaware Law relating to WMECO Capital, the Preferred Securities and
the Limited Partnership Agreement, upon the opinion of
<PAGE>
_________________________, delivered pursuant to subsection (e)
hereof;]
(d) Day, Berry & Howard, special tax counsel for WMECO Capital and the
Guarantor, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that such
counsel confirms its opinion as set forth under "Taxation" in the Prospectus as
amended and supplemented;
(e) _________________________, special Delaware counsel for WMECO Capital
and the Guarantor, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) WMECO Capital has been duly formed and is validly existing in
good standing as a limited partnership under the Partnership Act;
(ii) Under the Limited Partnership Agreement and the Partnership Act,
WMECO Capital has all necessary partnership power and authority to own its
properties and conduct its business, all as described in the Prospectus as
amended or supplemented;
(iii) The general partner and limited partner interests in WMECO
Capital issued to the Guarantor and the Class A Limited Partner,
respectively, have been duly and validly authorized and are validly
issued;
(iv) The Preferred Securities issued to the limited partners of WMECO
Capital, who hold the Preferred Securities (the "Preferred Security
Holders") have been duly and validly authorized and are validly issued
and, subject to the qualifications set forth herein, are fully paid and
nonassessable limited partner interests in WMECO Capital, as to which,
assuming that the Preferred Security Holders, as limited partners of WMECO
Capital, do not participate in the control of the business of WMECO
Capital, the Preferred Security Holders, as limited partners of WMECO
Capital, will have no liability in excess of their obligations to make
payments provided for in the Limited Partnership Agreement and their share
of WMECO Capital's assets and undistributed profits (subject to the
obligation of a Preferred Security Holder to repay any funds wrongfully
distributed to it);
(v) There are no provisions in the Limited Partnership Agreement the
inclusion of which, subject to the terms and conditions therein, or,
assuming that the Preferred Security Holders, as limited partners of WMECO
Capital, take no action other than actions permitted by the Limited
Partnership Agreement, the exercise of which, in accordance with the terms
and conditions therein, would cause the Preferred Security Holders, as
limited partners of WMECO Capital, to be deemed to be participating in the
control of the business of WMECO Capital;
(vi) The Limited Partnership Agreement has been duly authorized,
executed and delivered by the Guarantor constitutes a legal, valid and
binding agreement of the Guarantor, and is enforceable against the
Guarantor, in its capacity as general partner of WMECO Capital, in
accordance with its terms subject to bankruptcy, insolvency, moratorium,
fraudulent conveyance, receivership, reorganization, liquidation and other
similar laws relating to or affecting the rights and remedies of creditors
generally and to principles of equity (regardless of whether considered
and applied in a proceeding in equity or at law);
<PAGE>
(vii) Under the Limited Partnership Agreement and the Partnership
Act, WMECO Capital has all necessary partnership power and authority to
execute and deliver, and to perform its obligations under, this Agreement;
(viii) Under the Limited Partnership Agreement and the Partnership
Act, the execution and delivery by WMECO Capital of this Agreement, and
the performance by WMECO Capital of its obligations hereunder, have been
duly authorized by all necessary partnership action on the part of WMECO
Capital;
(ix) The issuance and sale by WMECO Capital of the Preferred
Securities pursuant to this Agreement and the execution, delivery and
performance by WMECO Capital of this Agreement will not violate (i) any
Delaware statute, rule or regulation, or (ii) the Certificate of Limited
Partnership of WMECO Capital or the Limited Partnership Agreement;
(x) No consent, approval, authorization, order, registration or
qualification of or with any Delaware court or Delaware governmental
agency or body is required solely as a result of the issuance and sale by
WMECO Capital of the Preferred Securities pursuant to this Agreement, the
execution, delivery and performance by WMECO Capital of this Agreement or
the consummation of the transactions contemplated in this Agreement;
(xi) Such counsel has reviewed the statements in the Prospectus as
amended or supplemented under the caption "WMECO Capital" and, insofar as
it contains statements of Delaware law, such statements are fairly
presented; and
(xii) Assuming that WMECO Capital is treated as a partnership for
Federal income tax purposes, and assuming that WMECO Capital derives no
income from or connected with sources within the State of Delaware and has
no assets, activities (other than the maintenance of a registered office
and registered agent in the State of Delaware and the filing of documents
with the Delaware Secretary of State) or employees in the State of
Delaware, the Preferred Security Holders (other than those Preferred
Security Holders who reside or are domiciled in the State of Delaware),
will have no liability for Delaware income taxes solely as a result of
their participation in WMECO Capital, and WMECO Capital will not be liable
for any Delaware income tax.
(f) On the date of the Pricing Agreement for such Designated Securities
at a time prior to the execution of the Pricing Agreement with respect to the
Designated Securities and at each Time of Delivery for such Designated
Securities, Arthur Andersen LLP, the independent accountants of WMECO Capital
and the Guarantor who have certified the financial statements of WMECO Capital
and the Guarantor and the Guarantor's subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the Commission
containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the Representatives;
(g) (i) Neither WMECO Capital, the Guarantor nor any of the Guarantor's
subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
<PAGE>
Securities any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, and (ii) since the
respective dates as of which information is given in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall not have been any change in the capital accounts or
long-term debt of WMECO Capital or capital stock or long-term debt of the
Guarantor or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting (x) the general affairs,
management, financial position, capital accounts or results of operations of
WMECO Capital or (y) the general affairs, management, financial position,
stockholders equity or results of operations of the Guarantor and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
Preferred Securities, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Representatives so material and adverse
as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Designated Preferred Securities on the terms and in the
manner contemplated in the Prospectus as amended relating to the Designated
Preferred Securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Preferred Securities (i) no downgrading shall have occurred in the
rating accorded any Preferred Securities or any of the Guarantor s debt
securities or preferred stock by any nationally recognized statistical rating
organization , as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any Preferred Securities or any of the Guarantor s
debt securities or preferred stock;
(i) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in
WMECO Capital s or the Guarantor s securities on the New York Stock Exchange;
(iii) a general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(j) The Preferred Securities at the Time of Delivery shall have been duly
listed, subject to notice of issuance, on the New York Stock Exchange;
(k) WMECO Capital and the Guarantor shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery for the Designated
Securities certificates of officers of WMECO Capital and the Guarantor,
respectively, satisfactory to the Representatives as to the accuracy of the
respective representations and warranties of WMECO Capital and the Guarantor
herein at and as of such Time of Delivery, as to the performance by WMECO
Capital and the Guarantor of all of its respective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth in
<PAGE>
subsections (a) and (e) of this Section and as to such other matters as the
Representatives may reasonably request;
(l) The Limited Partnership Agreement, the Guarantee and the Indenture
shall have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives; and
[(m) A Special Event (as defined in the Prospectus as amended or
supplemented) shall not have occurred and be continuing.]
8. (a) WMECO Capital and the Guarantor, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither WMECO Capital nor the Guarantor shall
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Preferred Securities, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to WMECO Capital by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Preferred
Securities.
(b) Each Underwriter will indemnify and hold harmless WMECO Capital and
the Guarantor against any losses, claims, damages or liabilities to which WMECO
Capital may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Preferred Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Preferred Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to WMECO
Capital and the Guarantor by such Underwriter through the Representatives
expressly for use therein; and will reimburse WMECO Capital and the Guarantor
for any legal or other expenses reasonably incurred by WMECO Capital in
connection with investigating or defending any such action or claim as such
expenses are incurred.
<PAGE>
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify such
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by WMECO Capital and the Guarantor on the one hand and the
Underwriters of the Designated Securities on the other from the offering of the
Designated Securities to which such 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 or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such 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 WMECO
Capital and the Guarantor on the one hand and the Underwriters of the
Designated Securities on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by WMECO Capital and the
Guarantor on the one hand and such Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by WMECO Capital and the Guarantor bear to the
total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by WMECO Capital and the Guarantor on the one hand or such
Underwriters on the other and the parties relative intent, knowledge, access
<PAGE>
to information and opportunity to correct or prevent such statement or
omission. WMECO Capital, the Guarantor and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection
(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) 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 such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged 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 such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Designated Securities and not joint.
(e) The obligations of WMECO Capital under this Section 8 shall be in
addition to any liability which WMECO Capital and the Guarantor may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
WMECO Capital and the Guarantor and to each person, if any, who controls WMECO
Capital and the Guarantor within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, as the case may be,
then WMECO Capital shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
WMECO Capital that they have so arranged for the purchase of such Designated
Securities, or WMECO Capital notifies the Representatives that it has so
arranged for the purchase of such Designated Securities, the Representatives or
WMECO Capital shall have the right to postpone a Time of Delivery for such
Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and WMECO Capital agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
Underwriter as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
<PAGE>
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and WMECO Capital as provided in subsection
(a) above, the aggregate amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate amount of the
Designated Securities to be purchased at the Time of Delivery, then WMECO
Capital shall have the right to require each non-defaulting Underwriter to
purchase the amount of Designated Securities which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Securities
and, in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the Designated
Securities, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and WMECO Capital as provided in subsection (a) above, the
aggregate amount of Designated Securities which remains unpurchased exceeds
one-eleventh of the aggregate amount of Designated Securities to be purchased
at the Time of Delivery, as referred to in subsection (b) above, or if WMECO
Capital shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase the Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Designated Securities shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or WMECO Capital or the Guarantor,
except for the expenses to be borne by WMECO Capital and the Guarantor and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of WMECO Capital or the Guarantor and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or WMECO Capital or the Guarantor, or any officer or director
or controlling person of WMECO Capital or the Guarantor, and shall survive
delivery of and payment for any Designated Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither WMECO Capital nor the Guarantor shall then be under any
liability to any Underwriter with respect to the Designated Securities with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Securities are not delivered by or on behalf of WMECO Capital or the Guarantor
as provided herein, WMECO Capital will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but WMECO Capital or the Guarantor
shall then be under no further liability to any Underwriter with respect to
such Designated Securities except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
<PAGE>
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to WMECO Capital or the Guarantor shall be
delivered or sent by mail, telex or facsimile transmission to the address of
WMECO Capital or the Guarantor, respectively set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to WMECO Capital and the Guarantor by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, WMECO Capital, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of WMECO Capital, the Guarantor and each person who controls WMECO
Capital or the Guarantor or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Preferred Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term business day shall mean any day when the Commission s office
in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each
of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us one for WMECO Capital and one for each of the Representatives plus
one for each counsel counterparts hereof.
Very truly yours,
WMECO CAPITAL, L. P.
By: Western Massachusetts Electric Company
its General Partner
By:
Name:
Title:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
[Name(s) of Co-Representative(s),(3)]
As Representatives of the several
Underwriters named in Schedule I hereto,
[c/o Goldman, Sachs & Co.,(3)]
85 Broad Street,
New York, New York 10004.
, 19
Ladies and Gentlemen:
WMECO Capital, L.P., a Delaware limited partnership ( WMECO Capital ), as
issuer, and Western Massachusetts Electric Company, a Massachusetts
corporation, as guarantor (the "Guarantor"), each proposes, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated
, 1994 (the Underwriting Agreement ), between WMECO Capital and the
Guarantor on the one hand and Goldman, Sachs & Co. [and (names of
Co-Representatives named therein)] on the other hand], to issue and sell to the
Underwriters named in Schedule I hereto (the Underwriters ) the Preferred
Securities specified in Schedule II hereto (the Designated Preferred
Securities ). The Designated Preferred Securities will be guaranteed by the
Guarantor to the extent set forth in this Agreement with respect to such
Designated Preferred Securities (the Guarantee ). Each of the provisions of
the Underwriting Agreement is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Agreement to the same extent as if
such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or supplemented
relating to the Designated Preferred Securities which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Preferred Securities pursuant to Section 12 of
the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Preferred
Securities, in the form heretofore delivered to you is now proposed to be filed
with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, WMECO Capital agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from WMECO Capital, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the amount of Preferred Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
<PAGE>
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us one each for WMECO Capital and the Guarantor and one for each of
the Representatives plus one for each counsel counterparts hereof, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this letter
and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding
agreement between each of the Underwriters and WMECO Capital and the Guarantor.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to WMECO
Capital for examination and the Guarantor, upon request, but without warranty
on the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
WMECO CAPITAL, L. P.
By: Western Massachusetts Electric Company,
its General Partner
By:
Name:
Title:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Amount of Preferred
Securities
to be
Underwriters Purchased
Goldman, Sachs & Co. . . . . . . . . .
[Name(s) of Co-Representative(s)(3)] .
[Names of other Underwriters] . . . . .
Total . . . . . . . . . . . . . . . . .
<PAGE>
SCHEDULE II
Title of Designated Preferred Securities: ___% Cumulative Monthly Income
Securities, Series __
Number of Preferred Securities:
Initial Offering Price to Public:
$........ per security
Purchase Price by Underwriters:
$........ per security
Commission Payable to Underwriters:
$........ per security in [specify same form of funds as in Specified Funds
below]
Form of Designated Preferred Securities:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ( DTC ) or its designated custodian, to be
made available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.
Specified Funds for Payment of Purchase Price:
[Describe any blackout provisions with respect to the Designated Preferred
Securities]
Time of Delivery:
........ a.m. (New York City time), ................., 19..
Closing Location: Offices of Winthrop Stimson Putnam & Roberts, One Battery
Park Plaza, New York NY 10004
Names and addresses of Representatives:
Designated Representatives: Goldman, Sachs & Co.
[List other Representative(s)]
Address for Notices, etc.: c/o Goldman, Sachs & Co., 85 Broad Street,
New York, NY 10004, Attention: Registration
Department
Other Terms:
<PAGE>
ANNEX II
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Guarantor and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Guarantor for the periods specified in such letter,
as indicated in their reports thereon, copies of which have been
furnished to the representatives of the Underwriters (the
Representatives ) and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Guarantor s quarterly
reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached hereto;
and on the basis of specified procedures including inquiries of
officials of the Guarantor who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor s Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Guarantor s Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
<PAGE>
material respects with the disclosure requirements of items 301, 302,
402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Guarantor and its subsidiaries,
inspection of the minute books of the Guarantor and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Guarantor and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Guarantor s Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Guarantor s Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Guarantor s Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Guarantor s Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
<PAGE>
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Guarantor and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred
or may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Guarantor and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents incorporated
by reference in the Prospectus specified by the Representatives, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Preferred Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Preferred Securities.
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit D.1
STATE OF CONNECTICUT
DEPARTMENT OF PUBLIC UTILITY CONTROL
APPLICATION OF
THE CONNECTICUT LIGHT AND POWER COMPANY
WITH RESPECT TO THE ISSUANCE OF
MONTHLY INCOME PREFERRED SECURITIES
AND RELATED TRANSACTIONS
I. Description of Proposed Transactions
1. The Connecticut Light and Power Company ("CL&P"), a public service
company within the meaning of Section 16-1 of the General Statutes of
Connecticut, revision of 1958, as amended (the "Connecticut General Statutes"),
hereby applies to the Department of Public Utility Control (the "Department")
for approval pursuant to Section 16-43 of the Connecticut General Statutes with
respect to proposed transactions relating to the issuance of monthly income
preferred securities ("MIPS").1
These transactions include the formation by
CL&P of an affiliated limited partnership, the issuance of the MIPS by the
limited partnership, and the use by the limited partnership of the proceeds
from such issuance to purchase subordinated debentures to be issued by CL&P.
1
An application has been filed by Goldman, Sachs & Co. with
the United States Patent and Trademark Office for the
registration of the MIPS servicemark.
<PAGE>
2. As described below and in the testimony of John B. Keane, Vice
President and Treasurer of CL&P, attached hereto as Exhibit A, MIPS are a
relatively new, sophisticated, tax-advantaged financial product that have
certain characteristics similar to those of preferred stock and, therefore,
receive equity credit from the major rating agencies comparable to that of
preferred stock. MIPS have a highly significant tax advantage over preferred
stock in that CL&P's capital costs would be comprised of interest, not
dividends, and would therefore be tax deductible. For these reasons, MIPS may
be thought of as combining the advantages of preferred stock and debt.
3. As set forth more fully below and in Exhibit A, CL&P would use the
proceeds of the proposed transactions to lower its after-tax cost of capital
and improve the quality of its capital structure by redeeming or otherwise
reacquiring a portion of its outstanding fixed rate preferred stock and/or
Dutch Auction Rate Transferable Securities ("DARTS").
4. In Docket No. 94-07-16, the Department approved, inter alia, the
issuance of up to $150 million of preferred stock to redeem or otherwise
reacquire substantially the same outstanding fixed rate preferred stock and
DARTS as would be refunded with the proceeds of the MIPS financing. The MIPS
financing for which CL&P is seeking approval in this docket is an alternative,
not in addition, to the issuance of such preferred stock.
5. Although the distribution rate on the MIPS may, on a pre-tax basis,
be 25-40 basis points higher than the dividend rate on a contemporaneous
preferred stock issuance, the expected tax deductibility of CL&P's payments
would result in substantial after-tax savings. For this reason, assuming the
anticipated tax advantages do not change and the capital market remains
receptive to MIPS, it is likely that CL&P will elect the MIPS financing, rather
than a preferred stock issuance, to refund the outstanding fixed rate preferred
<PAGE>
stock and DARTS. However, the authority granted CL&P in Docket No. 94-07-16 to
issue the preferred stock may prove useful if the tax advantages of the MIPS
were to be lost due to an adverse change in tax laws or interpretation, or if
the market for MIPS substantially weakens.
6. CL&P proposes to organize a special purpose limited partnership under
the Delaware Revised Uniform Limited Partnership Act for the sole purpose of
issuing the MIPS (the "Issuing Partnership"). CL&P will act as the general
partner of the Issuing Partnership and Northeast Utilities Service Company
("NUSCO"), a wholly-owned subsidiary of NU which provides services to CL&P and
the other NU subsidiaries, will act as the initial limited partner of the
Issuing Partnership. NUSCO will withdraw as the limited partner upon, or
shortly after, the issuance of the MIPS.
7. CL&P will make an equity contribution to the Issuing Partnership at
the time such partnership is first formed and will thereby acquire all of the
general partnership interest in the Issuing Partnership. The equity
contributions of the general partner to the Issuing Partnership will at all
times constitute at least 3% of the aggregate equity contributions by all
partners to the Issuing Partnership. In addition, NUSCO will make an equity
contribution to the Issuing Partnership at the time the partnership is first
formed and will thereby acquire all of the initial limited partnership interest
in the Issuing Partnership. Upon the withdrawal of NUSCO from the Issuing
Partnership as described in paragraph 6 above, NUSCO will withdraw its equity
contribution. Filed herewith as Exhibit B is a diagram setting forth the
structure of the proposed transactions and showing the flow of funds between
CL&P and the Issuing Partnership.
8. The Issuing Partnership will issue and sell the MIPS from time to
time in one or more series through August 31, 1996, in an aggregate amount of
<PAGE>
up to $150 million and having a $25 per share stated liquidation preference.
The MIPS will be registered under the Securities Act of 1933, as amended, under
a registration statement filed on Form S-3 (the "Registration Statement"). The
form of the Registration Statement will be filed by amendment as Exhibit C
hereto. The holders of the MIPS will become the limited partners of the
Issuing Partnership, and the amounts paid by such holders for the MIPS will be
treated as capital contributions to the Issuing Partnership.
9. CL&P will issue and sell, from time to time in one or more series,
subordinated debentures (the "Subordinated Debentures") to the Issuing
Partnership. The Issuing Partnership will use the proceeds from the sale of
the MIPS, plus the equity contributions made to it by CL&P as general partner,
to purchase the Subordinated Debentures. CL&P's Subordinated Debentures will
be registered pursuant to the Registration Statement. The Subordinated
Debentures will be issued pursuant to, and governed by, an indenture that will
be qualified under the Trust Indenture Act of 1939, as amended (the
"Indenture"). A draft of the Indenture is filed herewith as Exhibit D.
10. The Subordinated Debentures will mature at such time, not more than
50 years from their date of issuance, as CL&P may determine at the time of
issuance. Before maturity, CL&P will pay interest only, at a fixed rate set
forth in the Indenture, on the Subordinated Debentures. The distribution
rates, payment dates, redemption, and other similar provisions of each series
of MIPS will be substantially identical to the interest rates, payment dates,
redemption, and other provisions of the Subordinated Debentures relating
thereto, and will be determined by the Issuing Partnership at the time of
issuance. The interest paid by CL&P on the Subordinated Debentures will
constitute the only income of the Issuing Partnership and will be used by the
Issuing Partnership to pay monthly distributions on the MIPS. As described in
paragraph 17 below, under certain circumstances CL&P may have an obligation to
<PAGE>
"gross-up" the interest payments on the Subordinated Debentures so that the
Issuing Partnership will have sufficient funds available for such
distributions.
11. CL&P may also enter into a guaranty (the "Guaranty") pursuant to
which it will unconditionally guarantee (i) payment of distributions on the
MIPS, if and to the extent the Issuing Partnership has declared distributions
out of funds legally available therefor, and (ii) payments to the holders of
MIPS of amounts due upon liquidation of the Issuing Partnership or redemption
of the MIPS. The Guaranty, if issued, would be registered pursuant to the
Registration Statement. A draft of the Guaranty is filed herewith as Exhibit
E.
12. The Subordinated Debentures and Guaranty, if issued, will be
subordinate to all other existing and future indebtedness for borrowed money of
CL&P. CL&P will have the right to defer payment of interest on the
Subordinated Debentures for up to 60 months. However, CL&P will not be
permitted to declare or pay any dividend on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any class of its equity securities
unless all payments due under the Subordinated Debentures and Guaranty
(including any payments previously deferred) have been made.
13. Distributions on the MIPS will be made monthly, will be cumulative,
and will be mandatory to the extent that the Issuing Partnership has legally
available funds and sufficient cash for such purposes. The availability of
such funds will depend on the Issuing Partnership's receipt from CL&P of the
amounts due under the Subordinated Debentures. The Issuing Partnership will
have the right to defer distributions on the MIPS for up to 60 months, but only
if and to the extent that CL&P defers the interest payments on the Subordinated
Debentures as described in paragraph 12 above. If distributions on the MIPS
<PAGE>
(including all previously deferred distributions, if any) are so deferred for
18 consecutive months, then the holders of MIPS will have the right to appoint
a special representative to enforce the Issuing Partnership's rights under the
Subordinated Debentures and Guaranty, including, after failure to pay
distributions for 60 consecutive months, to require the declaration and payment
of distributions to holders of MIPS.
14. It is expected that the interest payments by CL&P on the Subordinated
Debentures will be deductible for federal income tax purposes and that the
Issuing Partnership will be treated as a partnership for federal income tax
purposes. Consequently, the holders of MIPS and the general partner will be
deemed to have received partnership distributions, not dividends, from the
Issuing Partnership and will not be entitled to any "dividend received
deduction" under the Internal Revenue Code.
15. The MIPS will be subject to redemption in whole or part on and after
a specified date (the "Earliest Redemption Date") at the option of the Issuing
Partnership, with the consent of CL&P, at a price equal to their stated
liquidation preference plus any accrued and unpaid distributions (the
"Redemption Price"). The Earliest Redemption Date will be determined based on,
among other factors, market conditions at the time of issuance, but will be not
later than 10 years after the date of issuance. The Indenture and the
Partnership Agreement (as defined in paragraph 19 below) may set forth
additional provisions governing the optional redemption of the MIPS. In
particular, it is expected that the Issuing Partnership will have the option,
with the consent of CL&P, to redeem the MIPS at the Redemption Price upon the
occurrence of specified adverse tax events (each, a "Tax Event"). Examples of
possible Tax Events include (a) the Issuing Partnership is subject to federal
income tax with respect to interest received on the Subordinated Debentures or
is otherwise not treated as a partnership for federal income tax purposes, (b)
<PAGE>
it is determined that the interest payments by CL&P on the Subordinated
Debentures are not deductible for federal income tax purposes, or (c) the
Issuing Partnership is subject to more than a minimal amount of other taxes,
duties, or other governmental charges. The Indenture and the Partnership
Agreement may also provide that the MIPS are subject to optional or mandatory
redemption upon the occurrence of specified adverse regulatory events (each, a
"Regulatory Event"). An example of a possible Regulatory Event is that the
Issuing Partnership becomes subject to regulation as an "investment company"
under the Investment Company Act of 1940, as amended.
16. It is expected that, upon the occurrence of a Tax Event or a
Regulatory Event, CL&P may also have the right to exchange the Subordinated
Debentures for the MIPS or to otherwise distribute the Subordinated Debentures
to the holders of MIPS, whereupon the MIPS would be cancelled and nullified.
17. If a Tax Event resulting in the Issuing Partnership becoming subject
to federal income tax with respect to interest received on the Subordinated
Debentures were to occur, it is expected that CL&P will have the obligation, if
the MIPS are not redeemed (as discussed in paragraph 15 above) or replaced (as
discussed in paragraph 16 above), to "gross up" its interest payments on the
Subordinated Debentures so that the Issuing Partnership will have sufficient
after-tax funds available to pay the distributions on the MIPS.
18. In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Issuing Partnership, holders of MIPS will be
entitled to receive, out of the assets of the Issuing Partnership available for
distribution to its limited partners, before any distribution of assets to the
general partner, an amount equal to the stated liquidation preference of the
MIPS plus any accrued and unpaid distributions.
<PAGE>
19. Under the Amended and Restated Agreements of Limited Partnership that
will govern the activities of the Issuing Partnership upon the issuance of the
MIPS (the "Partnership Agreement"), the activities of the Issuing Partnership
will be limited to the issuance and sale of MIPS, the use of the proceeds
thereof and the equity contributions by the general partner to purchase the
Subordinated Debentures, the receipt of interest on the Subordinated
Debentures, and the payment of distributions on the MIPS. A draft of the
Partnership Agreement is filed herewith as Exhibit F.
20. The Partnership Agreement will further state that the Issuing
Partnership's business and affairs will be managed and controlled directly by
the general partner, that the general partner will be responsible for all
liabilities and obligations of the Issuing Partnership, and that the general
partnership interest is not transferrable except for a transfer made (a) with
the consent of all other partners, (b) to a direct or indirect wholly-owned
subsidiary, or (c) in the event of merger, subject to certain conditions.
21. Because the MIPS will be supported by CL&P's Subordinated Debentures
and Guaranty (if issued), and the distributions to holders of MIPS will be paid
out of the interest payments on such Subordinated Debentures or pursuant to
such Guaranty, the Partnership Agreements will not include any interest or
distribution coverage or capitalization ratio restrictions on its ability to
issue and sell additional issues of MIPS. Such restrictions would not be
relevant or necessary, nor is the capital structure of the Issuing Partnership
relevant, because the interest payments of CL&P on the Subordinated Debentures
are expected to fully service the distributions on MIPS. For this reason,
financial statements for the Issuing Partnership are not included with this
Application.
<PAGE>
22. CL&P proposes to use the proceeds from the issuance of the
Subordinated Debentures to redeem or otherwise reacquire one or more of the
series of its fixed rate preferred stock and DARTS, as set forth below:
Aggregate
Series Designation Par Value Shares Outstanding Par Value
1989 Series, 9% $25 3,000,000 $75,000,000
1968 Series, 6.56% $50 200,000 $10,000,000
1968 Series 3.24G $50 300,000 $15,000,000
1989 DARTS $25 2,000,000 $50,000,000
$150,000,000
The 1989 Series, 9% preferred stock listed in the above table has a sinking
fund provision, while the two 1968 Series of preferred stock and the DARTS
listed in the above table are not subject to mandatory redemption.
23. As more fully explained in Exhibit A, because MIPS are a new and
sophisticated financial product, CL&P believes that it would be beneficial to
work with an underwriter or underwriters (collectively, an "Underwriter") that
has demonstrated expertise in the public offering of MIPS or similar preferred
partnership interests. For this reason, CL&P expects to offer the MIPS through
a negotiated public offering involving Goldman, Sachs & Co., which first
developed MIPS.
24. The MIPS will initially be marketed and sold pursuant to an
underwriting agreement (the "Underwriting Agreement") to be entered into by
CL&P, the Issuing Partnership, and the Underwriter. A draft of the
Underwriting Agreement will be filed by amendment as Exhibit G. Under the
terms of the Underwriting Agreement, the Underwriter will purchase the MIPS
directly from the Issuing Partnership and then sell the MIPS to the public.
CL&P will pay an underwriting fee of approximately 3.15% of the principal
amount of the Issuing Partnership's MIPS to be purchased by the Underwriter.
<PAGE>
The estimated fees, commissions, and expenses paid or incurred, or to be paid
or incurred, directly or indirectly, in connection with the proposed financings
by CL&P are set forth in Exhibit H filed herewith.
25. Based on market conditions, tax laws, and the views of the rating
agencies, CL&P may conclude that it can substantially obtain the benefits
described in Section II.C below by directly issuing the Subordinated Debentures
in a public offering. In such event, CL&P may elect to undertake such public
offering directly without organizing the Issuing Partnership and causing the
issuance of the MIPS as described above.
26. As more fully explained in Exhibit A, CL&P is seeking the same
special accounting treatment as the Department granted to CL&P in Docket No.
94-07-16. The special accounting treatment provides for equitable spreading of
the unamortized balance of issuance expenses with respect to the refunded
securities, including but not limited to call and market premiums. The
requested method is based on General Instruction 17 of the FERC Uniform System
of Accounts.
II. Additional Information
The following additional information is supplied as part of this
application:
A. The exact legal name of the Applicant and its principal place of
business:
The Connecticut Light and Power Company
Selden Street
Berlin, Connecticut 06037
<PAGE>
CL&P is a corporation specially chartered by the General Assembly of the
State of Connecticut.
B. The name, title, address, and telephone number of the attorneys and
other persons to whom correspondence or communications in regard to this
application are to be addressed:
John B. Keane
Vice President and Treasurer
The Connecticut Light and Power Company
c/o Northeast Utilities Service Company
P.O. Box 270
Hartford, Connecticut 06141
Telephone: (203) 665-3541
Fax: (203) 665-5457
and
Jeffrey C. Miller, Esq.
Assistant General Counsel
Northeast Utilities Service Company
P.O. Box 270
Hartford, Connecticut 06141
Telephone: (203) 665-3532
Fax: (203) 665-5504
and
Richard J. Wasserman, Esq.
Day, Berry & Howard
CityPlace
Hartford, Connecticut 06103-3499
Telephone: (203) 275-0142
Fax: (203) 275-0343
C. A concise and explicit statement of facts on which the Department is
expected to rely in granting this application:
1. CL&P believes that the proposed financings would lower its after-tax
cost of capital. CL&P expects to achieve such savings by using approximately
$100 million of the proceeds from the financings to redeem or otherwise
reacquire shares of its outstanding fixed rate preferred stock. Although the
MIPS may carry a distribution rate that is higher than the dividend rate on
such preferred stock, the expected tax deductibility of interest payments on
the Subordinated Debentures will result in substantial after-tax savings.
While a portion of the savings from the fixed rate preferred stock
<PAGE>
redemptions/reacquisitions will be offset by the redemptions/reacquisitions of
the DARTS, which currently have a lower after-tax cost than the MIPS, CL&P
expects that the proposed financings on balance will result in net savings, as
shown in the financial statements filed with this Application.
2. CL&P further expects that the proposed financings would improve or
maintain the quality of its capital structure. CL&P understands that the MIPS
would receive substantially more equity credit from the major rating agencies
than the DARTS currently receive and that the major rating agencies will view
the MIPS as having equity characteristics comparable to the equity
characteristics of sinking fund preferred stock. CL&P understands that the
basis for the rating agencies' view is that the long maturities of the MIPS, as
well as the ability to defer distributions for up to 60 months, provide an
equity-like stability to CL&P's capital structure.
D. An explanation of any unusual circumstances involved in this
application:
The Department's attention is directed to the fact that the transactions
proposed hereunder must be approved by the Securities and Exchange Commission
(the "SEC") under the Public Utility Holding Company Act of 1935 and that the
SEC may decline to render such approval until the SEC has received a certified
copy of the Decision of this Department. The parties are desirous of obtaining
SEC approval of the refinancings as soon as possible; accordingly, final
approval of this application by the Department is therefore respectfully
requested on or before November 15, 1994.
<PAGE>
III. Exhibits
CL&P is filing herewith (or, as indicated, will file by amendment hereto)
the exhibits listed in Appendix I hereto. This application and Appendix I set
forth all information and exhibits required to be filed by CL&P and which CL&P
deems necessary or desirable to support the granting of this application.
CL&P, however, hereby reserves the right to file such additional testimony and
exhibits as it may consider to be necessary or desirable.
IV. Requests for Approval
CL&P respectfully requests the Department's approval, pursuant to Section
16-43 of the General Statutes of Connecticut, of the transactions described
herein, including the formation of the Issuing Partnership, the acquisition,
directly or indirectly, by CL&P of general and limited partnership interests in
the Issuing Partnership, the making by CL&P, directly and indirectly, of the
general and initial limited partner equity contributions, the acquisition by
NUSCO of the initial limited partnership interest in the Issuing Partnership,
the issuance by CL&P of the Subordinated Debentures and the Guaranty to the
Issuing Partnership, the acquisition by the Issuing Partnership of the
Subordinated Debentures and the Guaranty, the issuance and sale of the MIPS by
the Issuing Partnership, the potential exchange of the MIPS for Subordinated
Debentures, and other actions incident to or necessary for the consummation of
the foregoing. At the time of each issuance, CL&P will request a reopening of
this Docket, a hearing, and a special meeting to approve the specific terms of
such issuance, including the aggregate principal amount of the issuance, the
outstanding securities to be refunded, the effective distribution rate(s)
applicable to the MIPS and/or the effective interest rate(s) applicable to the
Subordinated Debentures, the maturity of the series of MIPS, and the issuance
costs.
<PAGE>
<PAGE>
Dated this 14th day of October, 1994.
Respectfully submitted,
THE CONNECTICUT LIGHT AND POWER COMPANY
By:/s/John B. Keane
John B. Keane
Vice President and Treasurer
<PAGE>
APPLICATION OF
THE CONNECTICUT LIGHT AND POWER COMPANY
WITH RESPECT TO THE ISSUANCE OF
MONTHLY INCOME PREFERRED SECURITIES
AND RELATED TRANSACTIONS
APPENDIX I - TESTIMONY AND EXHIBITS
A. Testimony of John B. Keane, Vice President and Treasurer of The
Connecticut Light and Power Company.
B. Diagram setting forth the structure of the proposed transactions and
showing the flow of funds between CL&P and the Issuing Partnership.
C. Registration Statement on Form S-3 under the Securities Act of 1933
relating to the various securities which are the subject hereof and all
amendments and exhibits thereto. (To be filed by amendment.)
D. Draft of the Indenture, including a draft of the form of Subordinated
Debenture.
E. Draft of the Guaranty.
F. Draft of the Amended and Restated Limited Partnership Agreement of
CL&P's Issuing Partnership, including a draft of the form of preferred limited
partnership units.
G. Draft of the Underwriting Agreement. (To be filed by amendment.)
H. Estimated Fees and Expenses.
I. Balance Sheet as of June 30, 1994 (Actual and Pro Forma); Income
Statement and Statement of Retained Earning for the Twelve Months Ended June
30, 1994 (Actual and Pro Forma); Statement of Capital Structure as of June 30,
1994 (Actual and Pro Forma); and Explanation of Pro Forma Adjustments.
J. Resolutions of Board of Directors of The Connecticut Light and Power
Company.
<PAGE>
Exhibit A
STATE OF CONNECTICUT
DEPARTMENT OF PUBLIC UTILITY CONTROL
APPLICATION OF
THE CONNECTICUT LIGHT AND POWER COMPANY
WITH RESPECT TO THE ISSUANCE OF
MONTHLY INCOME PREFERRED SECURITIES
AND RELATED TRANSACTIONS
TESTIMONY OF JOHN B. KEANE
ON BEHALF OF
THE CONNECTICUT LIGHT AND POWER COMPANY
________________________________________________________________
Q. Please state your name and position with The Connecticut Light and Power
Company ("CL&P").
A. My name is John B. Keane. I am Vice President and Treasurer of CL&P. I
am also the Vice President and Treasurer of Northeast Utilities Service
Company ("NUSCO") and of Northeast Utilities ("NU").
Q. Please explain the relationship of NUSCO to CL&P.
A. NUSCO is a service company that provides, among other things, financial
planning services to the affiliated companies of the NU system, including
CL&P. As the Treasurer of NUSCO, I have participated in the financial
planning for CL&P.
<PAGE>
-2-
Q. Please briefly summarize the Application that is the subject of this
hearing.
A. CL&P seeks approval of proposed transactions relating to the issuance of
monthly income preferred securities ("MIPS").2
MIPS are a relatively new,
sophisticated, tax-advantaged financial product. MIPS are viewed by the
major ratings agencies as providing an equity cushion comparable to that
provided by preferred stock, but would enable CL&P to pay tax-deductible
interest payments instead of dividend payments, which are not tax
deductible. This tax deductibility would result in substantial after-tax
savings. CL&P would use the proceeds of the proposed transactions to
lower its after-tax cost of capital and improve the quality of its capital
structure by redeeming or otherwise reacquiring a portion of its
outstanding fixed rate preferred stock and/or Dutch Auction Rate
Transferable Securities ("DARTS").
Q. How do the approvals sought in this Application relate to the approvals
that the Department granted to CL&P in Docket No. 94-07-16?
A. In Docket No. 94-07-16, the Department approved, inter alia, the issuance
of up to $150 million of preferred stock to redeem or otherwise reacquire
substantially the same outstanding fixed rate preferred stock and DARTS as
would be refunded with the proceeds of the MIPS financing. Therefore,
CL&P intends that any MIPS financing would be effected in lieu of, not in
addition to, the issuance of such preferred stock.
2
An application has been filed by Goldman, Sachs & Co. with
the United States Patent and Trademark Office for the
registration of the MIPS servicemark.
<PAGE>
-3-
Q. The Application states that, in addition to refunding fixed rate preferred
stock, the proceeds of the MIPS financing will be used to redeem or
otherwise reacquire up to $50 million of CL&P's outstanding DARTS. Please
describe the DARTS.
A. DARTS, or Dutch Auction Rate Transferable Securities, are a form of
variable rate preferred stock issued by CL&P in January, 1989. Every 49
days, a new interest rate on the DARTS is set through an auction process,
subject to an interest rate cap. Each auction provides holders of the
DARTS with the choice of retaining them at the new interest rate or
surrendering them and receiving payment from a successful bidder in the
auction. DARTS are generally purchased by cash managers who place a high
value on the liquidity offered by the auction, seek the high yield due to
the tax advantage of certain equity investments, and draw comfort from the
safety of principal received from CL&P's investment grade rating. The
DARTS issue has performed well for CL&P, providing low cost equity capital
in a decreasing interest rate environment.
Q. If the requested approvals are granted, what criteria will CL&P use in
determining whether to issue the MIPS?
A. The decision to issue the MIPS will consider (i) the after-tax savings
that can be obtained and (ii) the impact of the issuance on CL&P's capital
structure. The first factor, after-tax savings, involves the same type of
analysis that CL&P has utilized since 1985 in its refinancing program. We
compare the after-tax payments that CL&P will make on a new security with
the effective cost of the applicable outstanding series of securities,
after taking into account any premium payable for the redemption of the
outstanding security and the issuance costs of the new security. CL&P's
<PAGE>
-4-
economic analysis results in the calculation of a "breakeven rate." The
breakeven rate applied to a series of MIPS is the distribution rate below
which it is economic for CL&P to use MIPS to refund the outstanding
preferred stock or the DARTS. I have attached as Annex 1 hereto a chart
showing the approximate breakeven rates for refunding the relevant
outstanding preferred stock issues.
The second factor requires an evaluation of the effect of a proposed
issuance on CL&P's capital structure, including the amount of equity
credit that the major rating agencies are likely to give to the new
securities as compared to the securities we are considering refunding and
the projected impact on later issuances of CL&P's securities. For
example, we have been informed by the rating agencies that the MIPS would
be viewed as having similar equity content as CL&P's sinking fund
preferred stock.
Q. In the Application, CL&P states that the effective capital cost of the
DARTS is lower than the cost of the MIPS. In view of your previous
answer, please explain why CL&P is considering refunding the DARTS with
the MIPS.
A. In comparing the after-tax payments that CL&P will make on the MIPS with
the effective cost of the DARTS, the analysis is complicated by the DARTS'
variable rate feature, which requires a projection of the future payments
on the DARTS in light of market conditions, particularly interest rates.
While CL&P currently pays 4.59% on the DARTS, which we consider to be an
attractive rate, we note that the rate has risen considerably from the
February rate of 3.00%, and many economists expect the current trend of
<PAGE>
-5-
rising interest rates to continue. The average rate that CL&P has paid on
the DARTS from their issuance in 1989 through September 30, 1994, which
has generally been a low interest rate period, was 5.3%.
Based on an estimated pre-tax cost of 9% on the MIPS, if we assume that on
average the future rates on the DARTS will equal the average rate over the
past five years of 5.3%, the after-tax cost of the DARTS and the MIPS
would be virtually equal. We have considered, however, that we have been
in a period in which interests rates have been quite low, and that we
cannot predict future interest rates with certainty. It is at least
plausible that future DARTS costs may be higher than the historical
average, in which case the effective cost of the MIPS may be lower than
the future effective cost of the DARTS. In addition, CL&P would reduce
its exposure to rising interest rates.
In evaluating the effect of a proposed issuance on CL&P's capital
structure, including the amount of equity credit that the major rating
agencies are likely to give to the MIPS as compared to the DARTS, CL&P has
been disappointed with the rating agencies' unwillingness to give
substantial equity credit to the DARTS. In contrast, the rating agencies
view favorably several equity-like characteristics of MIPS, including the
long maturity (up to 50 years), the five-year payment deferral feature,
and the subordination to other debt. Accordingly, we expect that the
rating agencies would view CL&P as having improved the quality of its
capital structure if it were to replace the DARTS with MIPS.
Another significant factor that we have considered is that DARTS work best
for companies with high preferred stock ratings. As ratings drop or as
<PAGE>
-6-
better opportunities become available, the purchasers are likely to switch
to securities with higher ratings. Therefore, CL&P's DARTS could be
vulnerable if CL&P's credit ratings were to decline. In that event, the
DARTS auction could fail. CL&P is concerned that such a failure would
stigmatize CL&P in the financial markets and have an adverse effect on
CL&P's future issues. I have on occasion described a failed auction as a
"black eye" on a company that could hinder later efforts to raise capital
at favorable rates.
Finally, I should emphasize that, although CL&P is seeking approval for
the refunding of the DARTS, the approval would not obligate CL&P to do so.
CL&P will only refund the DARTS if circumstances so warrant.
Q. Why is CL&P planning a negotiated underwriting, rather than utilizing a
competitive bid process, to issue MIPS?
A. Because MIPS are a new and sophisticated financial product, CL&P believes
that it would be beneficial to work with an underwriter or underwriters
(collectively, an "Underwriter") with a demonstrated expertise in the
public offering of such securities. For this reason, CL&P has had
discussions with Goldman, Sachs & Co. ("Goldman"), which first developed
MIPS, and with Saloman Brothers, Inc., a firm with substantial
capabilities in fixed income markets. Although other investment banks
have now created similar products, MIPS offerings have already been
successful in the market. Further, based on conversations with Goldman to
date, CL&P expects Goldman's underwriting fees to be approximately 3.15%
of the aggregate MIPS issue amount, which is competitive with underwriting
fees associated with a perpetual preferred stock issuance. In addition,
<PAGE>
-7-
MIPS are a specialty product that requires extra attention and marketing
efforts. The number of the firms that would likely be included in the
selling syndicate is much higher than is common for competitively bid
offerings. Because of the need for special marketing attention and a
large number of firms in the selling syndicate, we believe competitive
bidding is not feasible. Finally, because of the documentation
requirements and the tax issues, there is a considerable amount of
dialogue, coordination, and planning needed to establish the MIPS. That
cannot, in our judgment, be done effectively in a competitive bidding
situation. For these reasons, CL&P expects to issue the MIPS in a
negotiated underwriting.
Q. CL&P has requested the same special accounting treatment as the Department
granted in Docket No. 94-07-16. Please explain the nature and purpose of
the requested treatment.
A. As CL&P stated in the Application, the special accounting treatment
provides for equitable spreading of the unamortized balance of issuance
expenses with respect to the refunded securities, including but not
limited to, call and market premiums, as well as the related tax expense.
If CL&P is able to issue MIPS and use the proceeds to redeem or otherwise
reacquire an entire series (or group of series), then the requested method
is described in Paragraph C(3) of General Instruction 17 of the FERC
Uniform System of Accounts: "Reacquisition, with refunding."
Q. Does that complete your testimony, Mr. Keane?
A. Yes.
<PAGE>
-8-
<PAGE>
ANNEX 1 TO TESTIMONY OF JOHN B. KEANE AND EXHIBITS B
THROUGH J TO APPLICATION TO CDPUC INTENTIONALLY OMITTED
FROM EDGAR FILING. SEE CORRESPONDING EXHIBITS, AS APPLICABLE,
FILED WITH APPLICATION/DECLARATION
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit D.2
STATE OF CONNECTICUT
DEPARTMENT OF PUBLIC UTILITY CONTROL
ONE CENTRAL PARK PLAZA
NEW BRITAIN, CT 06051
DOCKET NO. 94-10-09 APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY WITH
RESPECT TO THE ISSUANCE OF MONTHLY INCOME PREFERRED
SECURITIES AND RELATED TRANSACTIONS
NOVEMBER 16, 1994
By the following Commissioners:
Reginald J. Smith
Thomas M. Benedict
Heather F. Hunt
DECISION
<PAGE>
DECISION
I. INTRODUCTION
A. APPLICANT'S PROPOSAL
By Application filed with the Department of Public Utility Control
(Department) on October 14, 1994, The Connecticut Light and Power Company (CL&P
or Company), a public service company as defined in Section 16-1 of the General
Statutes of Connecticut (Conn. Gen. Stat.), is requesting the Department's
approval, pursuant to Section 16-43 of the Conn. Gen. Stat., to issue and sell
monthly income preferred securities (MIPS). This transaction necessitates the
formation by CL&P of an affiliated limited partnership (CL&P Capital, L.P.),
the issuance of the MIPS by the limited partnership, and the use by the limited
partnership of the proceeds from such issuance to purchase subordinated
debentures to be issued by CL&P. In addition, CL&P is seeking equitable
spreading of the unamortized balance of issuance expenses with respect to the
refunded securities, including but not limited to call and market premiums.
I. PETITIONER'S EVIDENCE
The Company is requesting the Department's approval to issue and sell up
to $150 million in Monthly Income Preferred Securities. The proceeds of these
MIPS, through the issuance of the contemporaneous subordinated debentures, will
be used to redeem or otherwise reacquire a portion of its outstanding fixed
rate preferred stock and/or Dutch Rate Transferable Securities (DART) which are
as follows:
Series Designation Par Value Shares Outstanding Aggregate Par Value
1989 Series, 9% $25 3,000,000 $ 75,000,000
1968 Series, 6.56% $50 200,000 $ 10,000,000
1968 Series 3.24G $50 300,000 $ 15,000,000
1989 DARTS $25 2,000,000 $ 50,000,000
$150,000,000
The 1989 Series, 9% preferred stock listed in the above table has a sinking
fund provision. The two 1968 Series of preferred stock and the DARTS listed in
the above table are not subject to mandatory redemption.l,
The vehicle through which the MIPS will be effectuated will be a special
purpose limited partnership under the Delaware Revised Uniform Limited
Partnership Act for the sole purpose of issuing the MIPS. CL&P will act as the
general partner of CL&P Capital, L.P. and Northeast Utilities Service Company
(NUSCO), a wholly-owned subsidiary of Northeast Utilities (NU) which provides
services to CL&P and the other NU subsidiaries, will act as the initial limited
partner of CL&P Capital, L.P. NUSCO will withdraw as the limited partner upon,
or shortly after, the issuance of the MIPS.
CL&P Capital. L.P. will be capitalized through a $5 million equity
contribution of CL&P acquiring all of the general partnership interest. The
equity contributions of CL&P, as the general partner, will at all times
<PAGE>
constitute at least 3% of the aggregate equity contributions by all partners of
CL&P Capital, L.P. NUSCO, acting as limited partner, will make an equity
contribution to CL&P Capital, L.P. acquiring all of the initial limited
partnership interest. NUSCO, upon withdrawal from CL&P Capital, L.P., will
withdraw its equity contribution.
The MIPS will be sold, from time to time, in one or more series through
August 31, 1996 in an aggregate amount of up to $150 million and having a $25
per share stated liquidation preference. The MIPS will be registered under the
Securities Act of 1933, as amended, under a registration statement filed on
Form S-3. The holders of the MIPS will become the limited partners of CL&P
Capital, L.P. and the amounts paid by such holders for the MIPS will be treated
as capital contributions to CL&P Capital, L.P.
CL&P will issue and sell, from time to time, in one or more series,
Subordinated Debentures to CL&P Capital, L.P. CL&P Capital, L.P. will use the
proceeds from the sale of the MIPS, plus the equity contributions made to it by
CL&P, as general partner, to purchase the Subordinated Debentures. These
Subordinated Debentures will mature at such time, not more than 50 years from
their date of issuance, as CL&P may determine at the time of issuance. Before
maturity, CL&P will pay interest only, at a fixed rate, on the Subordinated
Debentures. The distribution rates, payment dates, redemption, and other
similar provisions of each series of MIPS will be substantially identical to
the interest rates, payment dates, redemption, and other provisions of the
Subordinated Debentures and will be determined by CL&P Capital, L.P. at the
time of issuance. The interest paid by CL&P on the Subordinated Debentures will
be the only income of CL&P Capital, L.P., which will use it to pay monthly
distributions on the MIPS.
CL&P may also enter into a guaranty pursuant to which it will
unconditionally guarantee (i) payment of distributions on the MIPS, if and to
the extent the Issuing Partnership has declared distributions out of funds
legally available therefor, and (ii) payments to the holders of MIPS of amounts
due upon liquidation of the Issuing Partnership or redemption of the MIPS.
The Subordinated Debentures and Guaranty, if issued, will be subordinate
to all other existing and future indebtedness for borrowed money of CL&P. CL&P
will have the right to defer payment of interest on the Subordinated Debentures
for up to 60 months. However, CL&P will not be permitted to declare or pay any
dividend on, or redeem, purchase, acquire, or make a liquidation payment with
respect to, any class of its equity securities unless all payments due under
the Subordinated Debentures and Guaranty (including any payments previously
deferred) have been made.
MIPS distributions will be monthly, cumulative, and mandatory to the
extent CL&P Capital, L.P. has the funds depending on CL&P Capital, L.P. receipt
from CL&P of the amounts due under the Subordinated Debentures. CL&P Capital,
L.P. will have the right to defer distributions on the MIPS for up to 60 months
but only if and to the extent that CL&P defers the interest payments on the
Subordinated Debentures. If distributions on the MIPS (including all
previously deferred distributions, if any) are so deferred for 18 consecutive
months, then the holders of MIPS will have the right to appoint a special
representative to enforce CL&P Capital, L.P. rights under the Subordinated
Debentures and Guaranty, including, after failure to pay distributions for 60
consecutive months, to require the declaration and payment of distributions to
holders of MIPS.
It is expected that the interest payments by CL&P on the Subordinated
Debentures will be deductible for federal income tax purposes and that CL&P
Capital, L.P. will be treated as a partnership for federal income tax purposes.
<PAGE>
Consequently, the holders of MIPS and the general partner will be deemed to
have received partnership distributions, not dividends, from CL&P Capital, L.P.
and will not be entitled to any "dividend received deduction" under the
Internal Revenue Code.
The MIPS will be subject to redemption in whole or part on and after a
specified date (Earliest Redemption Date) at the option of CL&P Capital, L.P.,
with the consent of CL&P, at a price equal to their stated liquidation
preference plus any accrued and unpaid distributions (Redemption Price). The
Earliest Redemption Date will be determined based on, among other factors,
market conditions at the time of issuance, but will be not later than 10 years
after the date of issuance.
The Indenture and the Partnership Agreement of CL&P Capital, L.P. may set
forth additional provisions governing the optional redemption of the MIPS. In
particular, it is expected that CL&P Capital, L.P. will have the option, with
the consent of CL&P, to redeem the MIPS at the Redemption Price upon the
occurrence of specified adverse tax events (Tax Event). Examples of possible
Tax Events include (a) CL&P Capital, L.P. is subject to federal income tax with
respect to interest received on the Subordinated Debentures or is otherwise not
treated as a partnership for federal income tax purposes, (b) it is determined
that the interest payments by CL&P on the Subordinated Debentures are not
deductible for federal income tax purposes, or (c) CL&P Capital, L.P. is
subject to more than a minimal amount of other taxes, duties, or other
governmental charges. The Indenture and the Partnership Agreement may also
provide that the MIPS are subject to optional or mandatory redemption upon the
occurrence of specified adverse regulatory events (Regulatory Event). An
example of a possible Regulatory Event is that the Issuing Partnership becomes
subject to regulation as an "investment company" under the Investment Company
Act of 1940, as amended.
It is expected that, upon the occurrence of a Tax Event or a Regulatory
Event, CL&P may also have the right to exchange the Subordinated Debentures for
the MIPS or to otherwise distribute the Subordinated Debentures to the holders
of MIPS, whereupon the MIPS would be canceled and nullified.
If a Tax Event resulting in the Issuing Partnership becoming subject to
federal income tax with respect to interest received on the Subordinated
Debentures were to occur, it is expected that CL&P will have the obligation, if
the MIPS are not redeemed or replaced, to "gross up" its interest payments on
the Subordinated Debentures so that CL&P Capital, L.P. will have sufficient
after-tax funds available to pay the distributions on the MIPS.
In the event of any voluntary or involuntary liquidation, dissolution, or
winding up of CL&P Capital, L.P., holders of MIPS will be entitled to receive,
out of the assets of CL&P Capital, L.P. available for distribution to its
limited partners, before any distribution of assets to the general partner, an
amount equal to the stated liquidation preference of the MIPS plus any accrued
and unpaid distributions.
Under the Amended and Restated Agreements of Limited Partnership that will
govern the activities of CL&P Capital, L.P. upon the issuance of the MIPS
(Partnership Agreement), the activities of CL&P Capital, L.P. will be limited
to the issuance and sale of MIPS, the use of the proceeds thereof and the
equity contributions by the general partner to purchase the Subordinated
Debentures, the receipt of interest on the Subordinated Debentures, and the
payment of distributions on the MIPS.
The Partnership Agreement will further state that CL&P Capital, L.P.'s
business and affairs will be managed and controlled directly by the general
<PAGE>
partner, that the general partner will be responsible for all liabilities and
obligations of CL&P Capital, L.P. and that the general partnership interest is
not transferable except for a transfer made (a) with the consent of all other
partners, (b) to a direct or indirect wholly-owned subsidiary, or (c) in the
event of merger, subject to certain conditions.
Because the MIPS will be supported by CL&P's Subordinated Debentures and
Guaranty (if issued), and the distributions to holders of MIPS will be paid out
of the interest payments on such Subordinated Debentures or pursuant to such
Guaranty, the Partnership Agreements will not include any interest or
distribution coverage or capitalization ratio restrictions on its ability to
issue and sell additional issues of MIPS. Such restrictions would not be
relevant or necessary, nor is the capital structure of CL&P Capital, L.P.
relevant, because the interest payments of CL&P on the Subordinated Debentures
are expected to fully service the distributions on the MIPS.
It is CL&P's opinion, that because MIPS are a new and sophisticated
financial product that it would be beneficial to work with an underwriter or
underwriters (Underwriter) that has demonstrated expertise in the public
offering of MIPS or similar preferred partnership interests. For this reason,
CL&P expects to offer the MIPS through a negotiated public offering involving
Goldman, Sachs & Co., which first developed MIPS.
The MIPS will initially be marketed and sold pursuant to an underwriting
agreement (Underwriting Agreement) to be entered into by CL&P, CL&P Capital,
L.P. and the Underwriter. Under the terms of the Underwriting Agreement, the
Underwriter will purchase the MIPS directly from the Issuing Partnership and
then sell the MIPS to the public. CL&P will pay an underwriting fee of
approximately 3.15% of the principal amount of CL&P Capital, L.P. MIPS to be
purchased by the Underwriter.
CL&P is seeking the accounting treatment as Department granted the Company
in Docket No. 94-07-16, Application of the Connecticut Light and Power Company
to Issue First and Refunding Mortgage Bonds and Preferred Stock, dated August
17, 1994. This accounting treatment provides for equitable spreading of the
unamortized balance of issuance expenses with respect to the refunded
securities, including but not limited to call and market premiums. The
requested method is based on General Instruction 17 of the FERC Uniform System
of Accounts.
CL&P also requests the Department's approval for the related transactions
that are necessary to structure the MIPS. These are the formation of CL&P
Capital, L.P., the acquisition, directly or indirectly, by CL&P of general and
limited partnership interests in CL&P Capital, L.P., the making by CL&P,
directly and indirectly, of the general and initial limited partner equity
contributions, the acquisition by NUSCO of the initial limited partnership
interest in CL&P Capital, L.P., the issuance by CL&P of the Subordinated
Debentures and the Guaranty to CL&P Capital, L.P., the acquisition by CL&P
Capital, L.P. of the Subordinated Debentures and the Guaranty, the issuance and
sale of the MIPS by CL&P Capital, L.P., the potential exchange of the MIPS for
Subordinated Debentures, and other actions incident to or necessary for the
consummation of the foregoing. At the time of each issuance, CL&P will request
a reopening of this Docket, a hearing, and a special meeting to approve the
specific terms of such issuance, including the aggregate principal amount of
the issuance, the outstanding securities to be refunded, the effective
distribution rate(s) applicable to the MIPS and/or the effective interest
rate(s) applicable to the Subordinated Debentures, the maturity of the series
of MIPS, and the issuance costs.
<PAGE>
III. DEPARTMENT ANALYSIS
CL&P requests Department approval to issue and sell up to $150 million in
MIPS and/or Subordinated Debentures for the redemption or otherwise reacquiring
of a portion of its outstanding fixed rate preferred stock and/or Dutch Rate
Transferable Securities.
CL&P is embarking on a new vehicle for financing through the issuance of
MIPS. The MIPS are a tax advantaged financial product that enables CL&P to pay
tax deductible interest payments instead of dividend payments that are not tax
deductible, resulting in after tax savings. In addition, the major rating
agencies view MIPS as comparable to preferred stock in furnishing an equity
cushion. The $150 million in proceeds from the MIPS will be used to redeem or
otherwise reacquire a portion of its outstanding fixed rate preferred stock
and/or DARTS. This will lower the after-tax cost of capital and enhance the
quality of CL&P's capital structure. Interrogatory EL-7 shows the after-tax
weighted cost of capital declining from 6.83% to 6.76% due to the effect of
issuing the $150 million in MIPS. The revenue requirement impact, of the MIPS,
amounts to an approximate $4 million net reduction. (Interrogatory EL-16)
In analyzing the propriety of redeeming debt, a comparison of the
after-tax payments that CL&P will make on the MIPS versus the effective cost of
the applicable outstanding series of securities, after factoring into account
any redemption premiums of the outstanding security and the issuance costs of
the MIPS results in a break-even rate. This break-even rate then is the
distribution rate below which it is economical for CL&P to use MIPS to refund
the outstanding preferred stock or the DARTS. The following are the break-even
rates:
CL&P Preferred Stock Break-even Rates
Potential Refinancings
Issue Rate Size Break-even Rate
Perpetual
1968 G 6.48% $15,000,000 5.90%
1968 6.56% $10,000,000 5.99%
***DARTS Variable $50,000,000 5.30%
Sinking Fund
1989 9.00% $75,000,000 7.31%
***Assumes break-even rate equals historical average rate of 5.30% as of
September 30, 1994.
CL&P and NUSCO have organized the limited partnership CL&P Capital, L.P.
for the exclusive purpose of marketing the MIPS. CL&P, acting as general
partner, will provide an equity contribution equal to at least 3% of the
aggregate equity contributions by all partners of CL&P Capital, L.P. NUSCO will
make an equity contribution as limited partner which will be withdrawn when
NUSCO withdraws as limited partner as the MIPS are purchased. The purchasers of
the MIPS will become the limited partners of CL&P Capital, L.P. and the amounts
paid by these holders of the MIPS will be treated as capital contributions to
CL&P Capital, L.P. The Department grants authority for the formation of CL&P
Capital, L.P.
CL&P Capital, L.P. will use the proceeds from the sale of the MIPS plus
the equity contributions made to it by CL&P as general partner, to purchase
<PAGE>
Subordinated Debentures issued by CL&P. The dividend rates, payment dates,
redemption, and other provisions of the MIPS will be identical to the interest
rates, payment dates, redemption, and other provisions of the Subordinated
Debentures. The proceeds from the sale of the MIPS will not be used by any
unregulated subsidiary.
The Department finds the proposed MIPS would strengthen CL&P's capital
structure through the refunding of debt with an equity like financial
instrument and grants approval for this transaction.
The Department also approves CL&P's request for the equitable spreading of
the unamortized balance of issuance expenses with regard to the refunded
securities including but not limited to call and market premiums as was
approved in Docket No.
94-07-16. The Department finds this accounting treatment appropriate, as it is
based on General Instruction 17 of the FERC Uniform System of Accounts.
Response to interrogatory EL-19. Journal entries outlining the specifics of
this are found in response to Interrogatory EL-14. The Department also grants
CL&P authority for the other transactions related to structuring the MIPS which
are the acquisition, directly or indirectly, by CL&P of general and limited
partnership interests in CL&P Capital, L.P., the making by CL&P, either
directly or indirectly, of the general and initial limited partner equity
contributions, the acquisition by NUSCO of the initial limited partnership
interest in CL&P Capital, L.P., the issuance by CL&P of the Subordinated
Debentures and the Guaranty to CL&P Capital, L.P., the acquisition by CL&P
Capital, L.P. of the Subordinated Debentures and the Guaranty, the issuance and
sale of the MIPS by CL&P Capital L.P., the potential exchange of the MIPS for
Subordinated Debentures, and other actions incident to or necessary for the
consummation of the MIPS financing.
IV. FINDINGS OF FACT
1. The proceeds of the MIPS and/or Subordinated Debentures will be used to
redeem or otherwise reacquire a portion of its outstanding fixed rate
preferred stock and/or Dutch Rate Transferable Securities.
2. CL&P has organized CL&P Capital, L.P. as a special purpose limited
partnership for the purpose of marketing the MIPS.
3. The proposed financing will have a positive effect on the Company's
capital structure.
4. The proceeds from the proposed financing will not be used by any
unregulated subsidiary.
5. The revenue requirement impact of the proposed financing is a net
reduction of approximately $4 million.
V. CONCLUSIONS AND ORDERS
A. CONCLUSION
The proposed financing and its effect on the Company 's financial
structure is reasonable, and approval of this application is in the public
interest.
Upon consideration of all the evidence presented in this proceeding and
discussed herein, the application is approved subject to the following orders.
B. ORDERS
<PAGE>
For the following Orders, please submit an original and ten (10) copies of
the requested material to the Executive Secretary, identified by Docket Number,
Title and Order Number.
1. Prior to the issuance and sale of the MIPS and/or Subordinated Debentures,
CL&P shall obtain approval of the Department through a request of a
reopening of this Docket, a hearing, and a special meeting to approve the
specific terms of such issuance. The information provided shall include
the following: aggregate principal amount of the issuance, the outstanding
securities to be refunded, the distribution rate(s) applicable to the MIPS
and/or interest rate(s) applicable to the Subordinated Debentures, the
effective distribution rate(s) applicable to the MIPS and/or effective
interest rate(s) applicable to the Subordinated Debentures, date of
issuance and years to maturity of the issue(s), extent (if any) of the
purchase discount or premium, spread over comparable U.S. Treasury
securities, sinking fund and redemption provisions and any other features
of the Subordinated Debentures, issuance costs, net proceeds to the
Company, break-even analysis for refunded debt, impact on CL&P's rate of
return and capital structure, and (if applicable) quotes of all
competitive bids submitted by financial institutions to effectuate this
transaction. CL&P shall also state whether the Subordinated Debentures
were marketed through CL&P Capital, L.P. or sold directly to the public
and shall provide a justification for the marketing method chosen.
2. The proceeds from the issue and sale of the MIPS and/or Subordinated
Debentures, after payment of expenses related to the issuance, shall be
used by the Company for purposes specified in its application. The
Company shall furnish to the Department within 60 days from the issuance
date of the MIPS and/or Subordinated Debentures a statement reflecting how
the proceeds of such financings were utilized.
3. The terms and conditions under which the MIPS and/or Subordinated
Debentures are to be issued and sold shall be substantially as specified
by CL&P in its application and no further material written or oral
supplements to or material modifications to the terms and conditions shall
be executed without prior approval of the Department. CL&P shall notify
the Department within 60 days from the issuance date of the MIPS and/or
Subordinated Debentures that no material modifications were made to the
terms and conditions under which the MIPS and/or Subordinated Debentures
were issued and sold.
4. Within 90 days from the issue and sale of the MIPS and/or Subordinated
Debentures, CL&P shall submit to the Department an itemization of all
expenses incurred in the transaction.
5. CL&P shall keep accurate accounting records of the ongoing legal and
administrative costs of maintaining CL&P Capital, L.P., and shall file
with the Department, at the end of each year, an itemization of these
costs.
<PAGE>
DOCKET NO. 94-10-09 APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY WITH
RESPECT TO THE ISSUANCE OF MONTHLY INCOME PREFERRED
SECURITIES AND RELATED TRANSACTIONS
This Decision is adopted by the following Commissioners:
Reginald J. Smith
Thomas M. Benedict
Heather F. Hunt
CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of the Decision issued by the
Department of Public Utility Control, State of Connecticut, and was forwarded
by Certified Mail to all parties of record in this proceeding on the date
indicated.
/s/ Robert J. Murphy NOV 17 1994
Robert J. Murphy Date
Executive Secretary
Department of Public Utility Control
File No. 70-8451
Exhibits F.1 and F.2
December 6, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: File No. 70-8451
Application/Declaration with Respect to the Organization of
Limited Partnerships, the Issuance of Preferred Limited
Partnership Interests and Subordinated Debentures, and Related
Transactions
Ladies and Gentlemen:
As counsel to The Connecticut Light and Power Company ("CL&P"),
Western Massachusetts Electric Company ("WMECO" and, collectively with
CL&P, the "Companies"), CL&P Capital, L.P. (the "CL&P Issuing
Partnership"), and WMECO Capital, L.P. (the "WMECO Issuing
Partnership"), we are furnishing this opinion to you in connection with
the Application/Declaration, as amended, on Form U-1 (the "Declaration")
of the Companies to the Securities and Exchange Commission with respect
to the organization of limited partnerships, the issuance of preferred
limited partnership interests and subordinated debentures, and related
transactions, as more fully set forth in the Declaration. Capitalized
terms used herein and not otherwise defined are used as defined in the
Declaration.
In connection with this opinion, we have examined the Declaration
and the exhibits thereto, and we have examined or caused to be examined
such other papers, documents, and records, and have made such
examination of law and have satisfied ourselves as to such other matters
as we have deemed relevant or necessary for the purpose of this opinion.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of
natural persons, and the conformity to originals of all documents
submitted to us as copies.
Based upon the foregoing, and in the event the proposed transactions
contemplated by the Declaration are carried out in accordance therewith,
we are of the opinion that:
(a)
(i) Upon receipt of approvals or waivers of approval
from the Connecticut Department of Public Utility Control, all
state laws applicable to CL&P in connection with the proposed
transactions will have been complied with; and
(ii) upon receipt of approvals or waivers of approval
<PAGE>
from the Connecticut Department of Public Utility Control and
the Massachusetts Department of Public Utilities and the
filing by WMECO of a Certificate of Limited Partnership of the
WMECO Issuing Partnership in the office of the Secretary of
State of the State of Delaware, all state laws applicable to
WMECO in connection with the proposed transactions will have
been complied with.
(b) (i)
(A) CL&P is validly organized and duly existing
under the laws of the State of Connecticut;
(B) WMECO is validly organized and duly existing
under the laws of the Commonwealth of Massachusetts;
(C) the CL&P Issuing Partnership is validly
organized and duly existing under the laws of the State
of Delaware; and
(D) upon the filing by WMECO of a Certificate of
Limited Partnership of the WMECO Issuing Partnership in
the office of the Secretary of State of the State of
Delaware, the WMECO Issuing Partnership will have been
validly organized and duly existing under the laws of
the State of Delaware;
(ii)
(A) the CL&P Issuing Partnership's Preferred
Partnership Interests will be validly issued, fully
paid, and nonassessable limited partner interests in the
CL&P Issuing Partnership, and the holders thereof will
be entitled to the rights and privileges appertaining
thereto set forth in the CL&P Partnership Agreement; and
(B) the WMECO Issuing Partnership's Preferred
Partnership Interests will be validly issued, fully
paid, and nonassessable limited partner interests in the
WMECO Issuing Partnership, and the holders thereof will
be entitled to the rights and privileges appertaining
thereto set forth in the WMECO Partnership Agreement;
and
(iii)
(A) the CL&P Subordinated Debentures will be valid
and binding obligations of CL&P in accordance with their
terms;
(B) the obligations of CL&P under the CL&P
Guaranty will be valid and binding obligations of CL&P
in accordance with its terms;
(C) the WMECO Subordinated Debentures will be
valid and binding obligations of WMECO in accordance
with their terms; and
(D) the obligations of WMECO under the WMECO
Guaranty will be valid and binding obligations of WMECO
<PAGE>
in accordance with its terms.
(c)
(i) The CL&P Issuing Partnership will legally acquire
the CL&P Subordinated Debentures; and
(ii) the WMECO Issuing Partnership will legally acquire
the WMECO Subordinated Debentures.
(d)
(i) The consummation of the proposed transactions by
CL&P will not violate the legal rights of the holders of any
securities issued by CL&P or any associate company thereof;
and
(ii) the consummation of the proposed transactions by
WMECO will not violate the legal rights of the holders of any
securities issued by WMECO or any associate company thereof.
The opinions expressed herein are qualified in their entirety as
follows: (i) no opinion is expressed with respect to laws other than
those of (A) the United States of America, (B) the State of Connecticut,
(C) the Commonwealth of Massachusetts, and (D) the State of Delaware;
and (ii) to the extent that the opinions relate to the enforceability of
any agreement or other document referred to herein, the opinions (A)
assume that such agreements or documents will be duly authorized,
executed, and delivered by all parties thereto, (B) are subject to the
effect of bankruptcy, insolvency, moratorium, and other similar laws
affecting creditors' rights generally, general principles of equity, and
certain laws and judicial decisions that may affect the enforceability
of certain rights and remedies provided in the Indentures and the
Guaranties, none of which laws and judicial decisions, however, making
the rights and remedies provided in the Indentures and the Guaranties,
taken as a whole, inadequate for the practical realization of the
benefits provided for in the Indentures and the Guaranties, and (C) are
qualified in that indemnification against violations of securities laws
may be subject to matters of public policy.
In rendering the opinions contained in paragraphs (b)(i)(B) and
(d)(ii) above, we have relied solely upon the opinion of Jeffrey C.
Miller, Esq., Assistant General Counsel of Northeast Utilities Service
Company, dated the date hereof, a copy of which is attached hereto, and
such opinions in paragraphs (b)(i)(B) and (d)(ii) above are subject to
the qualifications set forth in such opinion of Mr. Miller.
We hereby consent to the use of this opinion in connection with the
filing of the Declaration.
Very truly yours,
/s/Day, Berry & Howard
RJW/KHE
<PAGE>
December 6, 1994
Day, Berry & Howard
CityPlace
Hartford, CT 06103-3499
Re: File No. 70-8451
Application/Declaration with Respect to the Organization of
Limited Partnerships, the Issuance of Preferred Limited
Partnership Interests and Subordinated Debentures, and Related
Transactions
Ladies and Gentlemen:
I am Assistant General Counsel of Northeast Utilities Service Company
("NUSCO"), a service company subsidiary of Northeast Utilities ("NU"),
and I am furnishing this opinion to you to enable you to render your
opinion to the Securities and Exchange Commission (the "Commission") to
be filed as Exhibits F.1 and F.2 to the Application/Declaration, as
amended, on Form U-1 (the "Declaration") of The Connecticut Light and
Power Company ("CL&P") and Western Massachusetts Electric Company
("WMECO" and, collectively with CL&P, the "Companies"), subsidiaries of
NU, to the Commission with respect to the organization of limited
partnerships, the issuance of preferred limited partnership interests
and subordinated debentures, and related transactions, as more fully set
forth in the Declaration.
In connection with this opinion, I have examined or caused to be
examined by counsel associated with or engaged by me, including counsel
who are employed by NUSCO, such papers, documents, and records, and have
made such examination of law and have satisfied myself as to such other
matters as I have deemed relevant or necessary for the purpose of this
opinion. I have assumed the authenticity of all documents submitted to
me as originals, the genuineness of all signatures, the legal capacity
of natural persons, and the conformity to originals of all documents
submitted to me as copies.
The opinions set forth herein are limited to the laws of the State of
Connecticut and the Commonwealth of Massachusetts and the federal laws
of the United States. I am a member of the bar of the State of New
York. I am not a member of the bar of the State of Connecticut or the
bar of the Commonwealth of Massachusetts, and do not hold myself out as
an expert in the laws of such jurisdictions, although I have made a
study of relevant laws of such jurisdictions. In expressing opinions
about matters governed by the laws of the State of Connecticut and the
Commonwealth of Massachusetts, I have consulted with counsel who are
employed by NUSCO and are members of the bars of such jurisdictions.
Based upon and subject to the foregoing, and if the proposed
<PAGE>
transactions contemplated by the Declaration are carried out in
accordance therewith, I am of the opinion that:
(a) WMECO is validly organized and duly existing under the laws
of the Commonwealth of Massachusetts; and
(b) the consummation of the proposed transactions by CL&P and
WMECO will not violate the legal rights of the holders of
any securities issued by CL&P or WMECO or any associate
company thereof.
I hereby consent to your filing of this opinion with the Commission as
an attachment to the opinion that you will file as Exhibits F.1 and F.2
to the Declaration.
Very truly yours,
/s/Jeffrey C. Miller
<TABLE>
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit H.1
THE CONNECTICUT LIGHT AND POWER COMPANY
Estimated Expenses Associated with the
Issuance of $150 Million of MIPS
<S> <C>
Underwriters' Commissions $4,725,000
SEC 1993 Act Filing Fee 55,000
Printing Expenses 25,000
Legal Fees 75,000
NYSE Fee 45,000
Organization Fee 14,500
Trustee 5,000
Accounting Fees 25,000
Rating Agency Fees 60,000
NUSCO 20,000
Blue Sky Listings 3,500
Miscellaneous 6,000
Total $5,059,000
</TABLE>
Note: Estimated Expenses associated with the issuance of $150,000,000 of
MIPS in a single issuance.
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit H.2
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY
Estimated Expenses Associated with the
Issuance of $100 Million of MIPS
<S> <C>
Underwriters' Commissions $3,150,000
SEC 1993 Act Filing Fee 35,000
Printing Expenses 25,000
Legal Fees 75,000
NYSE Fee 45,000
Organization Fee 15,500
Trustee Legal 5,000
Accounting Fees 25,000
Rating Agency Fees 60,000
NUSCO 20,000
Blue Sky Listings 3,500
Miscellaneous 6,000
Total $3,465,000
Note: Estimated Expenses associated with the issuance of $100,000,000
of MIPS in a single issuance.
</TABLE>
